Virtualization Driving Data Center Growth - InformationWeek

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Virtualization Driving Data Center Growth

Ethernet switches, application delivery controllers, and WAN optimization equipment are particular growth spots in data center equipment.

The twin developments of convergence and virtualization, along with an improving economy, are working to fuel data center growth, according to a new Infonetics Research report on data center network equipment.

"As convergence and virtualization increasingly take over more functions in data centers, you need more powerful network equipment," said Infonetics' Mattias Machowinski in an interview Thursday. "Particularly when critical assets are involved, when a data center goes down you can imagine how important that can be."

Noting vendors are upgrading their data center gear to cope with new user demands, Machowinski said equipment manufacturers are switching from off-the-shelf gear to equipment that is "more closely tweaked towards the data center," particularly as old closet-type data centers lose favor with users.

"Cisco continues to dominate the overall data center network equipment market as few vendors can match the breadth of Cisco's product portfolio," he said. "But in each segment, Cisco encounters strong competitors that are focused on that segment whether it's Juniper for data center equipment switches, F5 in application delivery controllers, or Riverbed/Blue Coat for WAN optimization. This ensures healthy competition and customer choice."

In its latest data center report, Infonetics said that data center Ethernet switches surged in the fourth quarter, causing the market to reach the $3.2 billion mark for the entire year. Data center switches represent the bulk of data center network gear revenue, but Machowinski expects purpose-built and blade switches to increasingly gain market share in the data center switch market. He believes the purpose-built switches better address the move to blade server platforms, SAN convergence, and general high performance.

Additional bright spots in data center gear are application delivery controller sales, which increased 14% in the last quarter of 2009 over fourth quarter 2008, and WAN optimization equipment which saw sales increase 7% to $256 million in the same period.

Infonetics also is predicting new growth in spending in the storage area network switch and adapter market to be driven by the explosive growth of data and video content in data centers. The market research firm expects the introduction of 16-G Fiber Channel will drive the Fiber Channel segment for years, particularly in its Ethernet segment.

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