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Cloud service provider switch sales slow as focus shifts to AI – Dell'Oro Group

Global sales of data center switches was up 7%, yet for the first time in more than three years, spending from cloud service providers was flat. #pressrelease

December 1, 2023

1 Min Read

REDWOOD CITY, Calif. – According to a recently published report from Dell'Oro Group, the trusted source for market information about the telecommunications, security, networks, and data center industries, global sales of Data Center Switches was up 7 percent, following seven consecutive quarters of double-digit growth. What’s also remarkable is that, for the first time in more than three years, spending from Cloud Service Providers (SPs) was flat and did not contribute to market growth.

Additional highlights from the 3Q 2023 Ethernet Switch – Data Center Report:

  • For the second consecutive quarter, Arista, Cisco, and HPE captured most of the revenue growth and were able to gain revenue share during the quarter.

  • Geographically, sales growth was broad-based across all regions, except China which declined 12 percent.

  • Further fueled by AI applications, shipments of 200 Gbps, 400 Gbps, and 800 Gbps switches constituted approximately 25 percent of the revenue and over 20 percent of the total shipments. Although Amazon, Google, Meta and Microsoft continue to drive the majority of deployments, we observed an increasing number of shipments directed toward Tier 2/3 Cloud Service Providers and Large Enterprises.

Read the full press release here.

Dell'Oro Group

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