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.
The overall 2G-5G radio access network (RAN) infrastructure equipment market returned to growth in 1Q 2020, increasing at single-digit rate year-over-year
The telecom capex outlook remains favorable, even with the increased uncertainty due to the COVID-19 pandemic. Worldwide telecom capex – the sum of wireless and wireline telecom investments – is projected to grow at a one percent CAGR between 2019 and 2022.
Despite recent market uncertainties, we anticipate the Tier 1 Cloud service providers to increase data center capex as planned, primarily on servers, as the sector seeks to resume capacity expansion,” said Baron Fung, Research Director at Dell’Oro Group. “We project a steep decline in enterprise IT spending due to severe near-term supply and demand disruptions from COVID-19.
the worldwide Server and Storage System market is forecast for a modest 1 percent growth in 2020. After the Cloud slowed spending in 2019 to digest excess capacity, the segment is poised for a double-digit expansion this year.
Stefan Pongratz, VP at Dell’Oro Group, noted that Nokia’s cost reduction efforts, driven by its migration from field-programmable gate arrays (FPGA) to ASICs, has already been taking place in the background. 5G equipment running on Nokia’s ReefShark SoCs comprised about 10% of its 5G shipments in Q4 2019, he explained.
Stefan Pongratz said it will likely take some time before the Massive MIMO business case makes sense beyond the early adopter segment for indoor applications. “There is no doubt that the transceiver density will continue to grow over time for both outdoor and indoor systems
Power over Ethernet technology has evolved to be a key part of wireless LAN architectures, smart buildings and enterprise networks
Dell’Oro’s inaugural SD-WAN market share report indicated a 64% growth for the technology in 2019 – just surpassing $1 billion. “While 2019 was breakout year for SD-WAN adoption, it is still early days for market penetration,” said Shin Umeda, vice president at Dell’Oro Group.