“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 growth of controller and adapter shipments, for 10 Gbps ports, in particular, outpaced the growth of server units by a considerable amount for the past two quarters,” said Baron Fung, Research Director at Dell’Oro Group. “System vendors have been increasing their inventory of Intel processors, a portion of which have integrated Ethernet ports, and discreted Ethernet controllers in light of on-going disruptions from the global pandemic.