Data center capex is forecasted to grow at a 6% CAGR to just over $200 B over the next five years. However growth is forecasted to be mixed depending on the customer segment. The Cloud, which already accounts for more than 60% of the worldwide data center capex, will continue to gain momentum over Enterprise/On-premise data center deployments. Edge data centers deployed over Telco networks could emerge in the longer-term horizon.
The global upswing that began in the second half of 2018 has become deeper and stronger. Even with the higher-than-usual degree of uncertainty around the economy, we forecast that the RAN market will grow at a healthy pace over the next three years, before growth tapers off in the outer part of the forecast period, resulting in a mid-single digit CAGR between 2018 and 2022. Cumulative investments over the 2019-2024 period are expected to eclipse $200 B.
The world experienced a global pandemic in 2020 that ushered in a global economic recession. It is still unknown how much longer the coronavirus, COVID-19, will spread and cause economic disruptions, and at what rate the global economy will recover following massive shutdowns in the first half of the year. That being said, while in past macro-economic recessions the Optical Transport market would contract, we believe that in this recession, the demand for Optical Transport will increase as a large number of people shift to remote learning and working.
We just finished our Mobile Core Network (MCN) five-year forecast (2019 to 2024). The MCN forecast includes 4G and 5G packet core, policy, and subscriber data management network functions, as well as the IMS Core. Here are some of the highlights from the forecast:
“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.