1Q19 Results and 2Q19 Forecast Very Different in the Cloud, Enterprise, and Telco Service Provider Markets

Portola Valley, California – June 18, 2019 – Newly released reports by 650 Group, a leading Market Intelligence Research firm for communications, data center, and cloud markets, indicates that the supply chain is not being impacted the same way by the war with system and component suppliers having different exposure in the enterprise, cloud, and service provider supply chain. 

“Some markets, like the Enterprise WLAN market, saw an immediate negative impact coincident with the escalation of the trade war,” said Chris DePuy, Founder and Technology Analyst at 650 Group.  “For instance, in 1Q19, Enterprise WLAN revenues in China were down year-over-year.  Additionally, the WLAN semiconductor industry is undergoing significant changes in part due to disruption in the supply chain.”

“In late 2018 and early 2019, North American vendors with exposure to Enterprise and Cloud markets experienced relatively stronger year-over-year results than Chinese competitors,” said Alan Weckel, Founder and Technology Analyst at 650 Group.  “As a result of short buying cycles and robust competition, we expect the markets serving Enterprise and Cloud service providers will experience a relatively smaller percentage hit from the impact of the trade war compared to that of the telecom industry.  However, the impact may not be uniform because multi-vendor projects that involve suppliers caught up in the trade war may be put on hold until substitute vendors are named.”

The newly released research also indicates that certain market categories, such as telecom equipment, may decline during the trade war and will gradually rebound over the long term, while other markets, such as Ethernet Switching or servers will more rapidly recover after vendor swap-outs by the end of 2019.

About the Ethernet Switch Quarterly Report
650 Group offer detailed forecast and quarterly details across enterprise, service provider, and cloud infrastructure markets.  For more information about the reports, contact the sales department at 650 Group at +1 650 600 7104 or val@650group.com or www.650group.com.
 
About 650 Group
650 Group is a leading Market Intelligence Research firm for communications, data center, and cloud markets.  ​Our team has decades of research experience, has worked in the technology industry, and is actively involved in standards bodies.

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Campus Switching, North America, and China Drive Robust Y/Y Growth

Portola Valley, California – May 22, 2019 – A newly released report by 650 Group, a leading Market Intelligence Research firm for communications, data center and cloud markets, indicates that the Ethernet Switch Market grew nearly 10% Y/Y on strong campus and data center growth in 1Q19 to approximately $7.5 Billion.  The report also indicated significant regional differences amongst vendors as well as aggressive ASP fluctuations in the market.

“Despite an ongoing trade war, tariffs, and a slowdown in Cloud CAPEX, 1Q19 was a robust and record setting quarter for the Ethernet Switch market,” said Alan Weckel, Founder and Technology Analyst at 650 Group.  “The campus upgrade cycle remained robust with Cisco’s Catalyst 9K portfolio ramping and merger activity like Juniper acquiring Mist.  Significant regional and vertical mix shifts are expected throughout 2019 which will cause the market to move out of equilibrium compared to historical patterns and trends having an adverse effect on market share for the rest of 2019.”

The Quarterly Ethernet Switch report also indicates that China was the strongest performing region with H3C surpassing Huawei in revenue during 1Q19 with western vendors losing market share.  The report also indicates that campus switching outperformed data center switching for the second straight quarter with Cisco gaining share in campus switching and having its strongest market share results in North America since 2016.

About the Ethernet Switch Quarterly Report
The Ethernet Switch Quarterly Report offers a market assessment of vendor performance and market share in the Ethernet Switch market.  The report covers Modular, Fixed Managed, Smart Switching, White Box, Disaggregation, and other segmentation as well as the following port speeds: 100 Mbps, 1 Gbps, 2.5 Gbps, 5.0 Gbps, 10 Gbps, 25 Gbps, 40 Gbps, 50 Gbps, 100 Gbps, 200 Gbps, and 400 Gbps.  For more information about the report, contact the sales department at 650 Group at +1 650 600 7104 or val@650group.com or www.650group.com.
 
About 650 Group
650 Group is a leading Market Intelligence Research firm for communications, data center and cloud markets.  ​Our team has decades of research experience, has worked in the technology industry, and is actively involved in standards bodies.
 

Strong Commodity Price Declines Lead to Revenue Decline While Capacity Growth Continues
 
 
PORTOLA VALLEY, Calif.  May 14, 2019 —  According to an newly released report issued by founding analysts of 650 Group, US Hyperscaler Cloud market revenue grew 27% Y/Y in 1Q19 while CAPEX used for DC Equipment declined modestly during the same timeframe.
 
650 Group’s Cloud Report covers Co-location, IaaS, SaaS, and Search & Social.
 
1Q19 Highlights:

• Capital Equipment Expenditures declined Y/Y as commodity costs and extra capacity in the hyperscalers was digested
• IaaS Revenue continues to make up a large part of Cloud revenue drive by Amazon and Microsoft Growth
• US Hyperscaler Cloud providers are running their servers and networks more efficiently compared to 2018, allowing them to slow CAPEX purchases ahead of 2H19 technologies like 400 Gbps
• Amazon and Facebook DC Equipment CAPEX did grow Y/Y; Apple, Google, and Microsoft DC Equipment CAPEX declined

 
The Cloud reports includes CAPEX studies for the Colocation, IaaS, SaaS, and Search and Social Media markets including unique look at spending specifically for data center equipment.  Going beyond just Cloud revenue provides a unique look into where and how the largest Cloud providers deploy equipment.  In the report, you can see the trend towards more CAPEX spending occurring in IaaS as many SaaS providers choose IaaS instead of building out their own infrastructure.
 
“There was a fairly large disconnect in 1Q19 results in the Cloud supply chain as different vendors had different results depending on their end customer exposure,” said Alan Weckel, founding analyst for 650 Group. “Strong commodity price declines, increased utilization, and a work through of extra inventory caused a disconnect between CAPEX spend declining, but compute and network capacity increasing in 1Q19.  The rest of 2019 will show mixed results depending on customer exposure as not all Cloud providers are growing CAPEX the same way in 2019 and the uncertainty over large Cloud contract timing, especially in the US Federal space.”
 
About 650 Group
650 Group is a leading Market Intelligence Research firm for communications, data center and cloud markets.  ​Our team has decades of research experience, has worked in the technology industry, and is actively involved in standards bodies.  650 Group focuses on leading edge market trends and research and prides itself on first to market research.

Enterprise and Data Center Switching markets shatter old records

Portola Valley, California – Feb. 26, 2019 – A newly released report by 650 Group, a leading Market Intelligence Research firm for communications, data center and cloud markets, indicates that the Ethernet Switch Market grew 10% Y/Y on strong campus and data center growth in 2018 to slightly over $31 Billion.  The report also indicated China revenue reached an all-time high in the year on robust campus and data center growth.

“The Data Center market continued to surge despite some concerns of Cloud CAPEX growth rates slowing.  There is a disconnect in Cloud CAPEX and networking CAPEX; we note that networking CAPEX continues to be robust, despite overall CAPEX growth rate contractions amongst the largest Cloud providers,” said Alan Weckel, Founder and Technology Analyst at 650 Group.  “Overall CAPEX growth rate slowdown is being driven by Compute and Storage.  400G seems to have pushed out about one full quarter as well from both a system and optics view with the market anticipated second generation 400 Gbps product announcements by the end of the calendar year.”

The Quarterly Ethernet Switch report also indicates the Cisco and HPE Aruba were responsible for over half the revenue growth in the Enterprise market while Arista and White Box were responsible for over half the revenue growth in the Data Center Market. The Quarterly Ethernet Switch report related to this segment indicates that Arista, Cisco, HPE, and Juniper are the market leaders in the Ethernet Switch Market in 2018 in the United States while H3C, Huawei, and Ruijie are the market leaders in China.

About the Ethernet Switch Quarterly Report
The Ethernet Switch Quarterly Report offers a market assessment of vendor performance and market share in the Ethernet Switch market.  The report covers Modular, Fixed Managed, Smart Switching, White Box, Disaggregation, and other segmentation as well as the following port speeds: 100 Mbps, 1 Gbps, 2.5 Gbps, 5.0 Gbps, 10 Gbps, 25 Gbps, 40 Gbps, 50 Gbps, 100 Gbps, 200 Gbps, and 400 Gbps.  For more information about the report, contact the sales department at 650 Group at +1 650 600 7104 or val@650group.com or www.650group.com.
 
About 650 Group
650 Group is a leading Market Intelligence Research firm for communications, data center and cloud markets.  ​Our team has decades of research experience, has worked in the technology industry, and is actively involved in standards bodies.
 
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Data Center Summit, technical sessions, plenary speakers and exhibitor announcements will focus on data center network innovations 

SAN DIEGO — As data center traffic grows exponentially from cloud computing and applications including Artificial Intelligence (AI), data science and Internet of Things (IoT), the data center landscape is changing rapidly. 
 
OFC 2019, 3-7 March 2019 in San Diego, California, encompasses the entire ecosystem for data center networking and connectivity, addressing the needs of service and content providers as well as network operators, co-location and cloud providers from around the globe.
 
Optical innovations and optoelectronic integration enable high-speed and low-cost solutions for data center environments. OFC 2019 will feature the latest technological advancements that support the drive for increased efficiency in achieving an optimal user experience.  
 
“For the past several years, OFC has become an increasingly important show for the data center networking community,” said Alan Weckel, Founder and Technology Analyst at 650 Group. “Being the first major show of the year where vendors update their cloud and next-generation platform strategies, OFC helps set the stage for the rest of 2019. We expect to see many exciting vendor announcements at this year’s show.”
 
OFC 2019 will feature world-renowned speakers from top data center operators presenting on the latest networking architectures, leading technical experts reporting on advancements and hundreds of exhibitors demonstrating the latest innovations necessary to meet bandwidth demands. Organizers have aggregated the more than 60 technical and business sessions, workshops and short courses that offer content and training related to data center networks. A comprehensive schedule-at-a-glance is here.
 
“Optical technology remains a critical component of data center networks,” said Gabriella Bosco, Politecnico di Torino, Italy and OFC General Co-Chair. “Recent advances explore ways for these architectures to operate more cost-effectively, efficiently, and rapidly and the OFC program draws out emerging opportunities for operators, and content and service providers.”
 
Business-focused Sessions
This year’s Data Center Summit, Tuesday, 5 March, will feature a keynote from Dave Temkin, Vice President of Networks, Netflix, USA, who will discuss the evolution of content delivery. Another session will debate the adoption and main similarities and differences in open transport architectures for inter-data center, metro and long-haul optical networks, and review the most important related innovations that enable the “open” optical transport evolution.  
 
Three theaters on the show floor will feature technical and business presentations from industry organizations, including COBO, TIP, OpenConfig, Ethernet Alliance, OIF and more.
 
Exhibitors
Of the 700+ exhibiting companies at OFC 2019, more than 100 companies will showcase innovations in all levels of the infrastructure that impacts the network, including: transceivers, routers, switches and intra- and inter- data center equipment.
 
Additionally, several multivendor interoperability demonstrations will be featured on the show floor: OIF will demo Common Electrical I/O(CEI)-112G, FlexE (Flex Ethernet) and 400ZR; and Ethernet Alliance will demo 10 Gigabit Ethernet (10GbE), 25GbE, 50GbE, 100GbE and 400GbE technologies and solutions. Other demonstrations include the Open ROADM MSA SDN and 100G Coherent Transceivers.
 
Technical Sessions
A variety of technical sessions will dig deeper into next-gen technologies such as switching, optical interconnects, coherent systems, direct detection, architecture, machine learning and more. Register here for OFC’s premier technical conference.
 
Training Courses in Data Center Optics
OFC short courses will provide training in data center optics. Topics range from “New Developments in High-speed Optical Networking: OTN beyond 100G, 100G/200G/400G Ethernet, Flex Ethernet” to “Inside and In Between Data Centers” to “High-capacity Data Center Interconnects” and “Photonic Technologies in the Data Center.”
 
ATTENDEE REGISTRATION: 
Attendees may register by visiting ofcconference.org. Admittance to the exhibit hall is free with Exhibits Pass Plus Registration. Learn more. 
 
MEDIA REGISTRATION: 
Media/analyst registration for OFC 2019 can be accessed online. Further information is available on the event website at OFC, including travel details.
 
About OFC
The Optical Fiber Conference and Exhibition (OFC) is the largest global conference and exhibition for optical communications and networking professionals. For more than 40 years, OFC has drawn attendees from all corners of the globe to meet and greet, teach and learn, make connections and move business forward.
 
OFC includes dynamic business programming, an exhibition of more than 700 companies, and high impact peer-reviewed research that, combined, showcase the trends and pulse of the entire optical networking and communications industry. OFC is managed by The Optical Society (OSA) and co-sponsored by OSA, the IEEE Communications Society (IEEE/ComSoc), and the IEEE Photonics Society. OFC 2019 will be held from 3-7 March 2019 at the San Diego Convention Center, California, USA. Follow @OFCConference, learn more OFC Community LinkedIn, and watch highlights OFC YouTube.