Data center switch sales decline for first time in more than three years – Dell'Oro

The decline was broad-based across almost all major branded vendors, with the exception of Arista and Huawei #pressrelease

June 6, 2024

1 Min Read

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, spending on Ethernet data center switches declined in 1Q 2024, marking the first decline since 4Q 2020. While Ethernet data center switches are gaining ground in AI back-end networks used to connect accelerated servers, this footprint expansion was not enough to offset the decline in spending in the broader front-end network, used to connect general-purpose servers.

Additional highlights from the 1Q 2024 Ethernet Switch – Data Center Report:

  • The decline was broad-based across almost all major branded vendors, with the exception of Arista and Huawei. White-Box vendors also saw a revenue increase, driven by spending recovery from several large Cloud SPs, including Google and Amazon in the U.S. and Alibaba, Tencent, and ByteDance in China.

  • Shipments of 200 Gbps, 400 Gbps, and 800 Gbps switches constituted nearly 25 percent of total port shipments in 1Q 2024 and were the only speeds that showed growth during the quarter. We expect 400 Gbps and 800 Gbps adoption to accelerate in 2024 and 2025, as some of the AI workloads will start favoring Ethernet. We discuss the potential future adoption of Ethernet in AI infrastructure in our "AI Network for AI Workload" report.

Read the full press release here.

Dell'Oro Group

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