Data Center Networking Equipment Sales Will Be Up 67 Percent In 2010

networking data center

That's the word from Infonetics Research, which on Tuesday released its share and forecast report for the market segment for the third quarter of 2010, and predicted a healthy bounce back in many data center market segments.

According to Infonetics, worldwide revenue from data center network equipment -- in which Infonetics includes Ethernet switches, application delivery controllers and WAN optimization appliances -- grew 2 percent sequentially from the second quarter of 2010 to the third quarter. Growth was strongest in North America and EMEA.

"A new round of data center upgrades is underway, driven by virtualization, surging amounts of data, the growing need for storage, under-investment in 2009, and renewed life in the financial sector," said Matthias Machowinski, directing analyst for enterprise networks and video at Infonetics, in a research note.

One big area of strength is 10 Gigabit Ethernet, which accounted for 14 percent of data center switch ports in the third quarter, Infonetics noted. The researcher expects 10 GbE port penetration to hit 50 percent by 2014, especially as prices for the technology come down.

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Application delivery controllers are improving, thanks to telecom carriers and a general trend of data center upgrades, Infonetics said. F5 Networks remains the market leader in ADC revenue share, and Citrix is also coming on strong, having surpassed Cisco in revenue for the first time during the quarter.

On the WAN optimization appliance side, it's still Riverbed Technology that rules the roost with its WAN appliance revenue jumping 22 percent, giving it a double-digit lead over its competitors in the market, according to Infonetics.

In a separate report, Infonetics also noted that the market for SAN equipment will finish the year healthy, and expects the SAN market to double by 2014.

SAN switch and SAN adapter revenue were up 7 percent in the third quarter from the second quarter, and 16 percent year-over-year, to a total of $683 million in revenue worldwide.

North America accounted for 45 percent of worldwide SAN revenue in the third quarter, according to Infonetics. Brocade maintains the No. 1 SAN switch market share position, but Cisco, at No. 2, has seen consecutive quarters of growth in SAN all year.