Industry News
Report: Cloud Service Provider Switch Market Growth Slows
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Author : JIUZHOU
Update time : 2023-12-15 14:11:12
This comes after seven straight quarters of growth in the double digits. The increase in global data center switch sales revenue has decelerated to 7%. For the first time in three years, spending by cloud service providers has remained unchanged. This has not contributed to market expansion.
A recent publication by a collective indicates that after seven successive quarters of growth in double digits, the global sales revenue growth for data center switches has decelerated to 7%.
Worth noting! For the first time in more than three years, expenditure on cloud service providers (SPs) remained static. It did not contribute to market growth.
The vice president of a certain group said:
"Sales of data center switches have sustained robust performance, achieving almost record-breaking levels in the third quarter of 2023."
"Nonetheless, in spite of such robust sales figures."
"However, the market expansion is beginning to show indications of decelerating relative to past quarters. Spending in the cloud service provider industry has stayed the same compared to last year.
"At the same time, spending by large businesses surged by double digits."
"Cloud service providers are spending less on traditional networks for general-purpose servers and focusing more on AI infrastructure."
The decrease in spending by cloud service providers was also because they were still using their existing capacity.
"We expect this digestion to impact various divisions to varying degrees and timelines. Consistent with the sequence in which they meet demand and orders."
"Put differently, clients who got their orders first are the ones to initiate the digestion cycle." added a vice president of a group. "
More key points from the Ethernet Switch--Data Center report for Q3 2023:
Looking at it from a geographical standpoint, sales generally rose in all regions, with the exception of China where there was a 12% drop.
Driven further by the application of artificial intelligence. Revenue from 200Gbps, 400Gbps and 800Gbps switches accounts for approximately 25% of total revenue. Shipments account for more than 20% of total shipments.
A recent publication by a collective indicates that after seven successive quarters of growth in double digits, the global sales revenue growth for data center switches has decelerated to 7%.
Worth noting! For the first time in more than three years, expenditure on cloud service providers (SPs) remained static. It did not contribute to market growth.
The vice president of a certain group said:
"Sales of data center switches have sustained robust performance, achieving almost record-breaking levels in the third quarter of 2023."
"Nonetheless, in spite of such robust sales figures."
"However, the market expansion is beginning to show indications of decelerating relative to past quarters. Spending in the cloud service provider industry has stayed the same compared to last year.
"At the same time, spending by large businesses surged by double digits."
"Cloud service providers are spending less on traditional networks for general-purpose servers and focusing more on AI infrastructure."
The decrease in spending by cloud service providers was also because they were still using their existing capacity.
"We expect this digestion to impact various divisions to varying degrees and timelines. Consistent with the sequence in which they meet demand and orders."
"Put differently, clients who got their orders first are the ones to initiate the digestion cycle." added a vice president of a group. "
More key points from the Ethernet Switch--Data Center report for Q3 2023:
Looking at it from a geographical standpoint, sales generally rose in all regions, with the exception of China where there was a 12% drop.
Driven further by the application of artificial intelligence. Revenue from 200Gbps, 400Gbps and 800Gbps switches accounts for approximately 25% of total revenue. Shipments account for more than 20% of total shipments.
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