Report: Facebook, Microsoft drag down Q3 data center switch market

building blocks
Thanks to growth in the Europe and Asia-Pacific regions, the data center switch market bounces back in the third quarter, according to Dell'Oro Group. (Pixabay)

Thanks to the European and Asia-Pacific regions, global data center switch revenue bounced back year-over-year in Q3 after two consecutive quarters of mid to high single-digit declines. By contrast, revenue in the North American data switch market decreased for the fourth consecutive quarter due in part to a capex slowdown by some of the hyperscale cloud providers.

“Ongoing softness in the broader enterprise market as well as at some of the Tier 1 cloud service providers, particularly Facebook and to a lesser extent Microsoft, continued to weigh on the North American market,” said Sameh Boujelbene, senior research director at Dell’Oro Group, in a statement. “Meanwhile, in line with our expectations, sales in China were up (by) strong double-digits for the second consecutive quarter.

"This growth in China was bolstered by strong demand from cloud service providers, namely Alibaba, Tencent, Bytedance, and Kuaishou. Other countries in the APAC region as well as in Europe benefited from relaxed lockdown measures as well as some large telco service provider deals."

Demo

Build customer loyalty with AI-powered customer service

Learn how Salesforce can help telecom providers anticipate and address customer needs to increase customer satisfaction and make customer service your competitive advantage.

RELATED: VMware, Cisco, Fortinet hold down top-3 spots for SD-WAN market share—report

According to Dell'Oro Group's third quarter 2020 data Ethernet—data center report, vendors that posted revenue share gain in the year-to-date period were H3C, Ruijie and white box switch vendors.

While service providers largely put 400-Gig on the backburner this year to focus on the pandemic and the roll-out of 5G services, Dell'Oro's report said 25 Gbps, 100 Gbps, and 400 Gbps comprised more than half of the port shipments in the first nine months of the year.