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.