Report: Data center switch revenue plunges in Q1 due in part to COVID-19

05 Jun Report: Data center switch revenue plunges in Q1 due in part to COVID-19

For the first time in nine years, the data center switch market recorded a decline due in part to COVID-19, according to research by Dell’Oro Group. The data switch market dropped 9% year-over-year in the first quarter while revenue was the lowest in three years, according to Dell’Oro Group.

Other than Juniper Networks and some white box vendors, the market softness was broad-based across the rest of the major vendors. The white box vendors’ revenue was mainly driven by strong demand from Google and Amazon, according to Dell’Oro Group.
RELATED: Data center switch revenue growth anemic in Q4: Coronavirus will create more headwinds: report

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While the decrease in revenue was broad-based across all regions, it was less pronounced in North America.
“The COVID-19 pandemic has created some positive impact on the market as some customers pulled in orders in anticipation of supply shortage and elongated lead times,” said Sameh Boujelbene, senior director at Dell’Oro Group, in a statement. “Yet this upside dynamic was more than offset by the pandemic’s more pronounced negative impact on customer demand as they paused purchases due to macro-economic uncertainties.
“Supply constraints were not major headwinds during the first quarter but expected to become more apparent in the next quarter.”
Dell’Oro Group expects revenue in the market to decline in the high single digits this year despite some areas of strength in certain segments.

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