datacom market update - lightcounting feb webinar dale .pdf · lightcounting webinar february 12,...

1 LightCounting Webinar February 12, 2014

Datacom Market Update

LightCounting

Market Research

LightCounting Webinar

Dale Murray February 12, 20134


Datacom Market Highlights

• Challenging macroeconomic conditions continue to impact IT spending. Most expect this to continue.

• China down [e.g. IBM hardware down 40% in Q3]

• Emerging markets now showing weakness

– Particularly Eastern Europe, Russia

• U.S. Federal spending has been down for 3-4 quarters. Most system equipment companies feeling this pain.

• Much belt tightening; Big and small players reducing headcount

• Server market down: IDC says -3.7% in Q3

• Traditional storage down, Emerging storage growing

• HPC high end slumped in 2013 vs. 2012


$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13

Datacom Equipment

Source: Financial Reports and guidance from Cisco, HP, Dell, IBM, EMC, Juniper, Brocade, QLogic and Emulex. (Dell Q3-Q4 assumed flat)

2012: up 1.7% 2013: down 1.6%

Servers, networking and storage


Mixed Results for 2013 Datacom 2013 vs. 2012

Cisco - Switches, Routers, Data Ctr

1%

HP - Enterprise Group -6% Guiding weak Q4

Dell - Servers, Networking, Storage

19% Assumes Q3-Q4 flat

EMC – Storage products 4%

IBM - Servers and Storage -17%

Juniper - Routers and Switches 15%

Brocade -2%

Qlogic -9%

Emulex -7%

Mellanox -22%

Total -1.6%


Datacom Equipment Vendor Highlights

• Dell had a very strong H1 2013 in servers and networking: up 28% vs. H1 2012. Dell is now private.

• Q3 results broke Cisco’s 10-quarter string of growth

– Routers down 2% as new product cycle begins. Switches flat.

– New core routing product: Network Convergence System (NCS) based on new nPower X1 silicon, a 400 Gbps network processor

– Data Center group (blade systems with unified communications) up 32% but still <5% of revenues. Claim they are now #1 in blade systems

• Big switches with next-gen Ethernet speeds are arriving

– e.g. Cisco Nexus 77xx supports 96 40GigE or 48 100GigE ports Arista Networks 7500 supports 288 40GigE or 96 100GigE ports

• HP still working their turnaround plan; Good Q3 a result of one large hyperscale order; forward guidance is down


Datacom Equipment Vendor Highlights

• Fresher products produce strong results at Juniper – Router sales dramatically outpacing Cisco router

sales;

– Switch sales even better: +36% for Q4, year-on-year

• IBM getting out of x86 server business – Mainframes up, all else down.

– Servers down 28% in Q4, year on year. Group to be sold to Lenovo

– Committed $1.2B to build 40 cloud datacenters in 15 countries


Source: EnterpriseTech

http://2eof2j3oc7is20vt9q3g7tlo5xe.wpengine.netdna-cdn.com/wp-content/uploads/2014/01/lenovo-ibm-x86.jpg


Main Datacom Focus Areas

• The Cloud, in every way possible

• Virtual everything, including Software Defined

Networking

– Dell partners with Cumulus Networks for Open

Networking

• Dell’s “bare metal” switches to run Cumulus Linux OS

• Big Data Analytics and HPC merging

• Security

• Switching “fabrics” taking hold


$-

$200

$400

$600

$800

$1,000

Q12011

Q22011

Q32011

Q42011

Q12012

Q22012

Q32012

Q42012

Q12013

Q22013

Q32013

Q42013

Qu

arte

rly

Re

ven

ue

s ($

M)

Opnext

Emcore

Oplink

NeoPhotonics

Accelink

Oclaro

Avago

Finisar

Transceiver Suppliers

2012: down 6.7% 2013: up ~6.3%

Some Q4 results estimated from

guidance


$-

$100

$200

$300

$400

$500Q

1 2

011

Q2

201

1

Q3

201

1

Q4

201

1

Q1

201

2

Q2

201

2

Q3

201

2

Q4

201

2

Q1

201

3

Q2

201

3

Q3

201

3

Q4

201

3

Datacom Optical Components

2012: up 14% 2013: up 16%

Source: LightCounting Market Survey

Needs updating: Vendor survey in

progress


Ethernet Optical Transceivers

• Buzz is all about 100G, but 10G is the bread and

butter of the industry

• 40G ramping faster than expected as 4x10G

breakout has been very popular

– Native 40GigE deployment now beginning

– New Cisco Bidi transceiver (2x20Gλ) supports this

– 40G-LR4 “sub-spec” modules more popular than full

spec


Replacement of Pluggable Modules?

• High density EOM-

based switch blades

instead of pluggable

modules from

Arista Networks.

• Will this start a trend?

12x10G Embedded Optical Module

MPO Connector Interfaces


$-

$200

$400

$600

$800

$1,000

2010 2011 2012 2013 2014 2015 2016 2017 2018

Sale

s ($

M)

1 GigE

10 GigE

40 GigE

100 GigE

Ethernet Optical Transceiver Market

by Data Rate


-

5,000,000

10,000,000

15,000,000

2010 2011 2012 2013 2014 2015 2016 2017 2018

Un

its

1 Gbps

10 Gbps

40 GigE

100 GigE

Ethernet Optical Transceiver

Unit Shipments by Data Rate


Ethernet Optical Transceivers

$0

$50

$100

$150Q

1 2

01

2

Q2

201

2

Q3

20

12

Q4

20

12

Q1

20

13

Q2

20

13

Sale

s (

$M

)

1 GigE 10 GigE 40 GigE 100 GigE


Storage Market Soft and Morphing

• Unstructured data [stored on Network Attached

Storage] growing much faster than structured

data [stored on SAN arrays]

– Drives 10GigE instead of Fibre Channel.

• Traditional SAN storage still soft

– e.g. EMC high-end storage up 2% for 2013

• Emerging storage technologies are growing

– e.g. Flash, virtualized storage

– e.g. EMC Emerging Storage up 54% for 2013


Fibre Channel Optical Transceivers

$0

$25

$50

Q1

201

2

Q2

201

2

Q3

201

2

Q4

201

2

Q1

201

3

Q2

201

3

Sale

s (

$M

)

4 / 2 / 1 Gbps 8 / 4 / 2 Gbps 16 / 8 / 4 Gbps


Optical Interconnects

$0

$10

$20

$30Q

1 2

01

2

Q2

20

12

Q3

20

12

Q4

20

12

Q1

20

13

Q2

20

13

Sale

s (

$M

)

Active Optical Cables Parallel Transmitters and Receivers Parallel Tranceivers


Latest Industry Events • IEEE 802.3

– 802.3bm is in the Working Group Ballot phase

– The 400G Study Group adopted its objectives and all documents to begin the approval process to become an official Task Force.

• At least 100m over MMF

• At least 500m over SMF

• At least 2km over SMF

• At least 10km over SMF

• BER of 10-13 at the MAC/PLS service interface

• Ethernet Alliance Technology Exploration Forum on the Future of Ethernet with Dr. Bob Metcalf, inventor of Ethernet

– Looked at directions for Ethernet and technologies to get there

• SC13 Supercomputer Show

– Lots of InfiniBand

• OIF Workshop on 400G interfaces

datacom market update - lightcounting feb webinar dale .pdf · lightcounting webinar february 12,...

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