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Study: Data center network infrastructure market growing

By Donna Donowitz
April 12, 2011
In this increasingly cloud-based world, IT solutions are evolving at a solid pace. Many companies are adopting solutions that rely less on local hardware and more on cloud-based applications, or remotely located data centers.

As these changes take place, IT hardware needs for many companies are changing. Whereas once, large hard drives for each company PC were a priority, today many organizations are investing in network infrastructure for data centers.

The data centers themselves are either owned and run by the organization, or belong to a services provider who "rents" out access, bandwidth and space. In both cases, there is a growing reliance on data centers.

According to a recent study conducted by the Synergy Research Group, this trend is reflected in the growth of the data center network infrastructure market.

The study, called the Data Center Network Infrastructure Market Analysis Report, found data center network infrastructure sales grew by approximately 22 percent in 2010, reaching a total value of $13.1 billion.

Within the overall frame of data center network infrastructure, a number of markets experienced particularly strong growth, according to the study. These were high-end network security platforms, WAN optimization appliances and application delivery controllers.

Jeremy Duke, founder and principal analyst for Synergy Research Group, said investment in data center network infrastructure is likely to continue in the coming years.

"In 2010, we continued to see strong build-outs of data centers from Google to Amazon to Microsoft and a growing number of service providers/operators," Duke said. "Over the coming years, we believe increasing demand of utility computing and next generation multimedia services will continue to drive aggressive investment and innovation."

Duke also noted the recent announcement by social media giant Facebook that it plans to make information about its data centers available to the public on an open source model. "Given that such large-scale data centers typically consider such details to be competitive secrets, this is a bold move by Facebook," he said. "We believe it is a long-term strategy to benefit and leverage the wealth of knowledge in the open-source community."

The company that has benefited the most from the rise in data center spending is Cisco, which grew its share of the network infrastructure market from 48.5 percent in 2009 to 50.7 percent in 2010. Other popular vendors included Juniper, HP and Fortinet.

Synergy releases a report on the data center network infrastructure market every quarter. Its reports cover a range of topics, including market share, sizing and sales forecasts.


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