Broad-Based Growth across All Regions, Except China

“Despite only a slight improvement in the supply situation from the prior quarter, the data center switch market maintained its impressive growth trajectory,” Sameh Boujelbene, Vice President at Dell’Oro Group. “This was driven by the release of more backlog, with Cloud Service Providers (SPs) accounting for over 80 percent of the sales increase during the quarter. While this strong market performance was in line with our expectations, the significant decline in China came as a surprise. This decline can be attributed to various factors, including reduced spending from major Chinese Cloud SPs such as Alibaba and Tencent, the latest Covid-related disruptions, and the impact from currency exchange rates,” added Boujelbene.

Additional highlights from the 4Q 2022 Ethernet Switch – Data Center Report:

Arista was the primary beneficiary of the revenue growth during the quarter, capturing the majority of the increase, followed by Juniper and White Box vendors. Arista’s revenue share rose by almost seven points during the quarter, and the company’s market share surpassed 20 percent for the full year.

Full-year shipments of 200 Gbps and 400 Gbps reached almost 10 million ports, accounting for more than 10 percent of total shipments and almost 20 percent of revenues. This growth was largely driven by the ongoing adoption of these speeds by large Cloud SPs; namely Google, Amazon, Microsoft, and Facebook; along with improvements in supply.