2015 marks the 20 year anniversary for Dell’Oro Group, Inc. It gives me great pleasure to thank our clients, many of whom have become friends, for all their support in helping us achieve this milestone. What a fun industry, and what great people we work with! Folks like you make it a pleasure to come to work each day.
Looking back 20 years ago, I started Dell’Oro Group with researching the LAN Hub and Switch market which had just surpassed sales of $3 B worldwide. The LAN and enterprise networks have changed dramatically over the past 20 years. Ethernet Switch sales were less than 10% of the overall LAN market—Shared Hubs, Ethernet, Token Ring, and FDDI comprised the bulk. Companies such as 3Com, Cabletron Systems, Chipcom, DEC, FORE Systems, HP, Madge Networks, Newbridge Networks, SynOptics, and Xylan ruled the market. About the time I started Dell’Oro Group, Cisco entered the LAN market by acquiring Ethernet Switch startups such as Crescendo, Kalpana, and Grand Junction. Intel jumped in a couple years later.
Market sales skyrocketed to $13 B in the year 2000, and the vendor landscape changed. Larger companies rooted in the telecommunications industry jumped in via acquisition (such as Alcatel, Avaya, Marconi, and Nortel). The integration of Layer 3 technology became a market opportunity for new entrants such as Alteon, Extreme, Enterasys, Foundry, and Riverstone.
By 2005, market sales approached $15 B. 10 Gbps connectivity offered the next opportunity for new entrants such as Arista, Force 10, and Juniper. As 2010 approached, it became clear that there was a massive server installed base connected by 1 Gbps that would need to migrate to higher speeds. The role of the network became more influential over which configuration of server or brand of server was purchased. Cisco entered the server market, and server manufacturers Dell, and IBM entered the networking market via acquisition. Data centers, in particular of Cloud Service Providers grabbed everyone’s attention.
We predict Ethernet switch sales to eclipse $24 B in 2015—an eight-fold increase over the LAN market during the past 20 years. More importantly, we see network architecture in the data center driving user purchase decisions for both servers and storage systems. The role of the network has gone from being almost insignificant 20 years ago, to the critical element in the data center IT industry. Many companies have come and gone, and some, such as Intel, have come back again. Two companies, Cisco and HP have been significant participants in the networking industry for the past 20 years.
As portrayed in the figure below, Dell’Oro Group has expanded from networks to telecommunications, and more recently, to data center IT. It is our pleasure to serve you in this dynamic and exciting industry!