Cisco, others see strong data center growth

Equipment market grew 50% in 2010 to $8 billion, says Infonetics

Last year was a strong one for data center network equipment sales as spending rebounded from a barren 2009, and trends such as cloud, virtualization, and growing content and traffic drove demand, according to Infonetics Research.

In 2010, the worldwide data center equipment market - which Infonetics says includes data center Ethernet switches, application delivery controllers and WAN optimization appliances - grew 50% to almost $8 billion. Sales of purpose built data center switches nearly doubled quarter-over-quarter in 2010, the firm states.

Cisco leads the data center Ethernet switching market with over 80% market share. The application delivery controller market is led by F5 though the company saw revenue share decline as Cisco "turned the corner," Infonetics states.

The WAN optimization market is a three-horse race between Blue Coat, Cisco, and Riverbed.

The research firm expects some damping of sales in 2011 but still healthy growth as enterprises look for greener, more cost-effective products with improved price/performance and comprehensive management. North American enterprises plan to increase their data center infrastructure spending by an average of 25% in 2011, Infonetics found.

Interest in 100 Gigabit Ethernet equals or exceeds interest in 40G Ethernet, despite the lack of available products, Infonetics found. Optics pricing is currently a major factor in 100G Ethernetproduct availability and adoption.  

Enterprises also show strong interest in FibreChannel-over-Ethernet as a way to streamline their data center networks, Infonetics found. FCoE is a standard technology for virtualizing storage and reducing cabling in the data center by running FibreChannel storage traffic over Ethernet.

FCoE was expected to be a major revenue generator for vendor proponents, like Cisco, but the technology is essentially being given away for free.