AI Infrastructure Focus is Delaying Front-End Network Deployments, According to Dell'Oro Group

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Jan 31, 2024, 08:30 ET

800 Gbps Port Shipments to Quadruple in 2024, Despite Project Delays

REDWOOD CITY, Calif., Jan. 31, 2024 /PRNewswire/ -- According to a recently published report by Dell'Oro Group, the trusted source for information about the telecommunications, networks, and data center industries, AI infrastructure build-outs, also known as 'Back-End Networks', are causing budget cuts and project delays in general-purpose infrastructure, or 'Front-End Networks'. Despite these project delays, 800 Gbps port shipments are forecast to quadruple in 2024.

"Recent interviews with major Cloud service providers (SPs) unveiled multiple projects experiencing delays or being put on hold due to a shift in focus to AI infrastructure build-outs," said Sameh Boujelbene, Vice President at Dell'Oro Group. "Project delays and budget cuts have led to a shift of the 800 Gbps adoption timeline by approximately a year for certain major Cloud SPs. Consequently, our forecast for sales of switches deployed in front-end networks has been revised downward compared to our July 2023 report.

"Despite project delays, 800 Gbps port shipments are expected to quadruple in 2024, driven mainly by the anticipated adoption by a major Cloud service provider, specifically Amazon; and propelled by the availability of 51.2 Tbps chips in the market. 800 Gbps will be adopted in both back-end as well as front-end networks. While our traditional data center switch report focuses on front-end networks, we delve into back-end network deployment in our recently published advanced research report 'AI Networks for AI Workloads'," added Boujelbene.

Additional highlights from the Ethernet Switch—Data Center 5-Year January 2024 Forecast Report:

1600 Gbps is expected to start shipping in 2025/2026. Together with 800 Gbps, these high speeds are expected to comprise nearly 40 percent of the data center switch ports by 2028.
Linear Drive Optics, an alternative to Co-packaged optics, are expected to gain material traction during our forecast horizon.
SONiC adoption is expected to accelerate, achieving a 10-20 percent penetration rate in Tier 2/3 Cloud SPs and large enterprises by 2028.

About the Report

The Dell'Oro Group Ethernet Switch – Data Center 5-Year Forecast Report provides a comprehensive overview of market trends and includes tables covering manufacturers' revenue, port shipments, and average selling price forecasts for various technologies: Modular and Fixed by Port Speed; Fixed Managed and Unmanaged by Port Speed; SONiC by customer segments; and Co-Packaged Optics by Port Speed. We forecast the following port speeds: 1/10/25/40/50/100/200/400/800/1600 Gbps, and SerDes speed. To purchase this report, please contact us by email at [email protected].

About Dell'Oro Group

Dell'Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, security, networks, and data center markets. Our firm provides in-depth quantitative data and qualitative analysis to facilitate critical, fact-based business decisions. For more information, contact Dell'Oro Group at +1.650.622.9400 or visit www.delloro.com.

SOURCE Dell'Oro Group