the worldwide Data Center Switch market recorded its first decline in nine years, dropping 9 percent year-over-year in the first quarter. 1Q 2020 revenue level was also the lowest in three years. The softness was broad-based across all major branded vendors, except Juniper Networks and white box vendors. Revenue from white box vendors was propelled mainly by strong demand from Google and Amazon.
Demand for SD-WAN held up well in the first quarter, but supply chain disruptions induced by the COVID-19 pandemic caused a sharper deceleration in vendor revenue growth,” said Shin Umeda, Vice President at Dell’Oro Group. “We still expect the SD-WAN market to grow by double-digits this year, but with so much macroeconomic uncertainty, strong performance won’t be a shoo-in for all vendors,” added Umeda.
“As the pandemic spread through Asia, Europe, then North and South America, enterprises turned to cloud-managed capable network equipment to get thousands, or tens of thousands of remote workers connected to the network. The amount of interest in being able to perform deployment and management tasks remotely shot up,” said Tam Dell’Oro, Founder, CEO, and Wireless LAN Analyst at Dell’Oro Group.
Our outlook has become more positive, especially since the Chinese service providers accelerated their plans for 5G Core deployments,” stated David Bolan, Senior Analyst at Dell’Oro Group. “China Mobile and China Unicom have completed their 5G Core tenders, and plan to launch 5G service early in 3Q20.
Sales of optical transport equipment used for data center interconnect (DCI) increased 13 percent year-over-year in 1Q 2020. The top three vendors—Ciena, Cisco, and Infinera—with a combined share of over 70 percent benefited the most from the rising demand for data center connectivity.