“SD-WAN offers a compelling reason for businesses to upgrade their WAN infrastructures, which is something we haven’t seen in many years,” said Shin Umeda, Vice President at Dell’Oro Group. “There is no doubt that COVID-19 has created a major bump in the road, but the fundamental drivers for SD-WAN adoption have not changed, and may even be enhanced if work from home solutions can be incorporated,” added Umeda.
“The network security market was not immune to the pandemic in 1Q 2020,” said Mauricio Sanchez, Research Director, Network Security and Data Center Appliances. “We expect the pandemic to continue to cause revenue lumpiness for the rest of 2020, with winners and losers like in 1Q 2020
As the COVID-19 pandemic started to spread in Asia, Europe and then North and South America, it impacted demand for campus switches,” said Sameh Boujelbene, Senior Director at Dell’Oro Group. “Because of macroeconomic uncertainties, many customers are pausing IT spending and, in some cases, cancelling orders as they revisit their budget to adjust to the new situation.
Data center capex returned to higher growth in 1Q 2020, as some of the major Cloud service providers had reverted from capacity digestion to expansion phase,” said Baron Fung, Research Director at Dell’Oro Group. “Stay-at-home orders around the world are placing excess burdens on Cloud infrastructure, prompting some Cloud service providers to bolster capacity in critical areas of the network.
The first half of 2020 will give way to a sustained rebound in broadband equipment spending in the second half of the year,” said Jeff Heynen, Senior Research Director, Broadband Access and Home Networking. “The need to expand residential broadband speeds and availability will ultimately win out over the current macroeconomic slowdown,” explained Heynen.
The US predictions from Deutsche Bank largely dovetail with global forecasts by Dell’Oro Group, an analyst firm widely cited by wireless network equipment vendors. The firm recently projected that worldwide telecom capex would grow at a 1% compound annual growth rate between 2019 and 2022.
Is 2020 the year of 400G? It’s the kind of question telecom industry observers love to ask, though it is a far too general one. It speaks to our fascination with big numbers as milestones to be reached and put in the rearview mirror as we push toward the next milestone.
Strong 5G NR investment, particularly in China and South Korea, helped the overall RAN market return to year-on-year growth (albeit single-digit) during Q1 2020 after some contraction the previous quarter. This was one of the key findings from research firm Dell’Oro in its latest report covering RAN markets worldwide.