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100 GbE switch market shifting to large enterprises
The 100 GbE switch market is shifting away from webscale data center operators, as Arista and Cisco benefit from large enterprises buying more of the faster ports to replace 40 GbE.
White box makers are losing sales of 100 GbE switches to proprietary manufacturers as more large enterprises replace end-of-life 40 GbE systems with the faster technology.
Arista Networks has done particularly well in the 100 GbE market as the group of potential buyers expands beyond the top four internet companies -- Google, Amazon, Microsoft and Facebook -- to include large enterprises and second- and third-tier cloud providers, said the Dell'Oro Group, based in Redwood City, Calif.
Arista, which has sold primarily to tier-one internet companies, has managed to increase its market share despite the change in buyers. From 2017 to 2018, Arista's share of 100 GbE revenue increased from 32% to 33%.
"They're killing it," said Sameh Boujelbene, an analyst at Dell'Oro.
Cisco's smaller market slice rose from 25% to 27%, while white box makers lost ground as their portion fell from 25% to 21%. Those companies include Quanta, Celestica, Accton, Delta, Inventec and Foxconn. (The percentages for 2018 are an average of the first three quarters of the year.)
Market dynamics
Until this year, webscale data center operators were the primary buyers of 100 GbE switches. That changed when more companies started replacing older 40 GbE ports and discovered the price of 100 GbE links was "very close" to the slower ports, excluding optics, Boujelbene said.
As a result, companies are buying 100 GbE ports as uplinks for top-of-rack switches and core switching. Besides better pricing, the ports also provide excess capacity to handle the growth in internet traffic that is expected over the next several years, as companies support more video, cloud-based applications and mobile devices.
In general, businesses smaller than the largest internet companies prefer to buy systems from incumbent vendors that provide familiar technology and support. White box products typically require more expertise and larger IT departments.
Dell'Oro expects vendors to double 100 GbE port shipments this year from last year when the number reached 4.6 million. "We expect [port shipments] to almost double in 2019," Boujelbene said.
