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Enterprises finding high value in 25 GbE, 100 GbE switches

Research finds shipments of 25 GbE and 100 GbE switches are outpacing 10/40 GbE hardware, as companies find more value in the higher-bandwidth gear.

Getting new and better technology at the same price as the previous generation is propelling the fast-growing market for 25 GbE and 100 GbE data center switches.

By 2021, the two technologies will account for more than half of all Ethernet switch shipments worldwide, according to a Crehan Research Inc. report released this week. During the same time frame, the overall switching market will surpass $15 billion.

The market typically gets a bump when vendors introduce switches with more throughput to meet increasing demands on corporate networks, said Seamus Crehan, president of Crehan Research, based in South San Francisco, Calif. The latest technologies, however, add a twist.

"The compelling pricing here is new," Crehan said. "There's almost no premium for the higher bandwidth."

Comparing 10/40 Gigabit Ethernet with 25/100 GbE shows how good a deal the latter is. The higher-bandwidth 25 GbE uses the same number of lanes as 10 GbE, and the same holds true for 100 GbE and 40 GbE. A lane refers to the electrical signal on the chip that would power an Ethernet port.

In addition to getting more bandwidth per lane, 25/100 GbE switches, which vendors started shipping last year, are compatible with existing data center fiber cabling. The backward compatibility reduces the cost of deployment dramatically.

The above GbE specifications are used in top-of-rack switches. The networking gear handles traffic from tens, and sometimes hundreds, of thousands of application servers in the data centers of enterprises and cloud service providers.

What's behind demand for 25 GbE, 100 GbE?

There's almost no premium for the higher bandwidth.
Seamus Crehanpresident of Crehan Research

For several years, the rise of server virtualization and cloud computing has fueled steady bandwidth growth. More recently, the cloud providers have been investing heavily in data-intensive artificial intelligence and machine learning, which has placed even more pressure on available bandwidth.

Those dynamics, along with the low price, are making 25/100 GbE a no-brainer for a growing number of organizations, particularly cloud providers running hyperscale data centers. Those companies include Facebook, Google and Microsoft.

In 2019, cloud service providers will spend $34.4 billion on IT infrastructure, including switches, servers and storage, according to IDC. That amount represents an annual growth rate of 16.6%, which is higher than the rate of spend on private cloud infrastructure. Spending on noncloud IT infrastructure will decline during the same time frame.

Currently, port shipments of 25 GbE and 100 GbE are in the hundreds of thousands per quarter, Crehan said. That number would likely be higher if there weren't supply constraints in related technologies, such as optical transceivers that uplink and connect the switches.

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