TelecomTV TelecomTV
  • News
  • Videos
  • Channels
  • Events
  • Network Partners
  • Industry Insights
  • Directory
  • Newsletters
  • Digital Platforms and Services
  • Open RAN
  • Cloud Native Telco
  • Telcos and Public Cloud
  • The Green Network
  • Private Networks
  • Open Telco Infra
  • 5G Evolution
  • Access Evolution
  • Edgenomics
  • Network Automation
  • 6G Research and Innovation
  • Security
  • More Topics
  • Network Partners
  • Industry Insights
  • Directory
  • Newsletters
  • |
  • About
  • Contact
  • |
  • Connect with us
  • Digital Platforms and Services
  • Open RAN
  • Cloud Native Telco
  • Telcos and Public Cloud
  • The Green Network
  • Private Networks
  • Open Telco Infra
  • 5G Evolution
  • Access Evolution
  • Edgenomics
  • Network Automation
  • 6G Research & Innovation
  • Security
  • Connect with TelecomTV
  • About
  • Privacy
  • Help
  • Contact
  • Sign In Register Subscribe
    • Subscribe
    • Sign In
    • Register
  • Search

Data Centres

Data Centres

Data-center switching market to see first half shortfalls as coronavirus ravages the supply chain

Via IHS Technology Press Releases

May 11, 2020

April 15, 2020 - LONDON, UK — While the market for data-center switches is experiencing both positive and negative impacts from the coronavirus crisis, the net effect of the pandemic will be a 3 to 4 percent reduction in revenue and ports during the first half of 2020 compared to previous expectations.

The global market for data-center switches will total $5.4 billion during the first six months of the year, down 9.9 percent from $5.9 billion during the same period in 2018, as reported by the Omdia Data Center Network Equipment Market Tracker. However, the market is expected to rebound robustly in the second half of 2020, with revenue rising to $7.3 billion, up 20 percent from $6 billion during the same period in 2019.

“The pandemic is significantly affecting the data-center switching market in areas including component supply, manufacturing and reseller and end-user sales,” said Devan Adams, principal analyst at Omdia. “The impact was Initially felt in Asia, where a significant number of components for data-center equipment are manufactured. Since then, the coronavirus’s influence has spread to other regions outside of Asia, such as North America and Europe. Supply shortages have slowed or halted shipments of data-center equipment around the globe as workforces dwindle and non-essential businesses suspend operations.”

These events will affect supply and demand of data-center equipment in 2020 and beyond.

Crisis spurs requirements for switches

Ironically, the pandemic is also delivering some benefits to the switch market.

“Data centers are experiencing massive surges in consumer internet usage due to the coronavirus-inspired increase in demand for e-learning, remote working, binge television watching and other activities,” Adams said. “This is good news for many switch vendors, whose products are key elements in handling the traffic bursts data centers are experiencing.”

Companies enjoying a major increase include cloud service providers (CSPs) like Microsoft, which announced a 775 percent monthly increase in its Teams app usage in Italy during March 2020. Moreover, Google Cloud stated Google Meet, its video conferencing solution, saw its day-over-day usage grow over 60 percent during the last weeks of March 2019.

“With schools closing, families practicing social distancing and governments mandating employees to work from home, the need to operate a reliable, scalable and secure data-center network is paramount—especially in heavily affected countries like the U.S., Spain, Italy, Germany and China,” Adams said. “Furthermore, many service providers are adjusting their network traffic routes by prioritizing demands from certain industries like healthcare and government whose online services are being overwhelmed by the data traffic spikes.”

Coronavirus concerns

While there have been data surges in DC networks, many CSPs are implementing their own customer relief efforts to help many of their struggling customers, especially the small business owners that operate in non-essential industries. Many of these businesses are shutting down, conducting employee layoffs and significantly reducing their budgets. Many large service providers are trying to support these companies by donating to charities, establishing relief funds and grants, relaxing bill payment penalties and offering free or reduced prices for services running on their networks.

The mixed signals highlighted above make it very complex to forecast the effect of coronavirus on the data-center switching market. As businesses and customers adjust to their new norms during these uncertain times, purchasing behavior changes are inevitable.

As a result, Omdia’s data center equipment forecasts are subject to change as the current environment continues to shift. As a result, Omdia will be closely monitoring and adjusting its forecasts throughout the year.

About Omdia

Omdia is a global technology research powerhouse, established following the merger of the research division of Informa Tech (Ovum, Heavy Reading and Tractica) and the acquired IHS Markit technology research portfolio*.

We combine the expertise of over 400 analysts across the entire technology spectrum, analyzing 150 markets publishing 3,000 research solutions, reaching over 14,000 subscribers, and covering thousands of technology, media & telecommunications companies.

Our exhaustive intelligence and deep technology expertise allow us to uncover actionable insights that help our customers connect the dots in today’s constantly evolving technology environment and empower them to improve their businesses – today and tomorrow.

Omdia is a registered trademark of Informa PLC and/or its affiliates. All other company and product names may be trademarks of their respective owners. Informa PLC registered in England & Wales with number 8860726, registered office and head office 5 Howick Place, London, SW1P 1WG, UK. Copyright © 2020 Omdia . All rights reserved.

Related Topics
  • Announcement,
  • Business Models,
  • Data Centres,
  • Digital Platforms and Services,
  • Europe,
  • IHS Markit,
  • Manufacturing & Industry 4.0,
  • Telecoms Vendors & OEMs,
  • Tracker

More Like This

Digital Platforms and Services

Improving the optics: Opportunities in DC-to-DC connectivity

Mar 20, 2023

The Green Network

Equinix to back five new solar farms

Mar 15, 2023

Digital Platforms and Services

Oracle to invest US$1.5bn to meet cloud computing demand in Saudi Arabia

Feb 7, 2023

Open RAN

What’s up with… KDDI, Fujitsu, Samsung, 5G IoT, BT

Jan 24, 2023

Digital Platforms and Services

News brief: Public cloud market revenues topped $540bn in 2022

Jan 24, 2023

This content extract was originally sourced from an external website (IHS Technology Press Releases) and is the copyright of the external website owner. TelecomTV is not responsible for the content of external websites. Legal Notices

Email Newsletters

Stay up to date with the latest industry developments: sign up to receive TelecomTV's top news and videos plus exclusive subscriber-only content direct to your inbox – including our daily news briefing and weekly wrap.

Subscribe

Top Picks

Highlights of our content from across TelecomTV today

10:43

MWC23 interview: Mari-Noëlle Jégo-Laveissière, deputy CEO of Orange

12:45

MWC23 interview: Abdu Mudesir, Group CTO, Deutsche Telekom

9:26

MWC23 interview: Greg McCall, Chief Networks Officer, BT

TelecomTV
Company
  • About Us
  • Media Kit
  • Contact Us
Our Brands
  • DSP Leaders World Forum
  • Great Telco Debate
  • TelecomTV Events
Get In Touch
[email protected]
+44 (0) 207 448 1070
Connect With Us

  • Privacy
  • Cookies
  • Terms of Use
  • Legal Notices
  • Help

TelecomTV is produced by the team at Decisive Media.

© Decisive Media Limited 2023. All rights reserved. All brands and products are the trademarks of their respective holder(s).