Wednesday, June 27, 2012
Data center network equipment market rising, sort of
The market for data center network equipment, especially systems used with storage area networks, is undergoing an unpredictable period. A recent Infonetics Research study found first quarter global revenues in data center network equipment fell to $2.2 billion, representing a small decline from the fourth quarter of 2011. However, it also represents 17 percent year-over-year growth, pointing to expansion for the market as a whole.
Sam Barnett, directing data center and cloud analyst at Infonetics Research, explained that there should be solid growth for SAN switches, adapters and similar equipment as the need to support social media use, video, cloud computing and innovative data center tools is rising. However, the upgrade cycle is somewhat choppy, as the market is in an unusual place concerning the possibility of consistent growth.
"The data center equipment market was down sequentially, but is up nicely from the year-ago first quarter. For the remainder of 2012 and into 2013, we expect growth to be choppy as service providers and data center operators are at different stages in their data center upgrades and some are beginning to wind down their current investment cycle," said Barnett.
Essentially, there is considerable potential for strong sales in the data center network equipment market, but there will be ups and downs as different sectors align themselves and companies conclude hardware refresh cycles.
Global economic issues also have the potential to impact revenue potential in the market. Infonetics found that uncertain economic conditions in North America, Europe, the Middle East and Africa are leading to a challenging market for future equipment investments, as these regions make up approximately 70 percent of the international SAN equipment market.
As hardware investments increase in the storage network, it is vital that data center operators also consider other areas that need help. In most data centers, the SAN is the most powerful part of the network, as the majority of the data resides there and need to go out to end users. But with virtualization and cloud computing creating more traffic between servers, not just out of the data center, the need for holistic network upgrades throughout facilities is becoming a critical consideration. Without the right upgrades around the whole data center, SAN investments could be limited by poor application performance.
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