Following two strong years of investment, growth in the data center equipment market is starting to slow in the first quarter, according to a research report.
Market research firm Infonetics Research said worldwide revenue for data center network equipment (data center Ethernet switches, ADCs and WAN optimization appliances) declined 11% sequentially in the first quarter to $2.3 billion (€1.8 billion).
Purpose-built data center switches grew 30% year-over-year in the first quarter. Following record sales in 2012, ADC revenue dipped 7% sequentially in and is only slightly positive (+2%) from a year ago due to declining sales to the US federal government and delays in tier 1 telco projects.
Matthias Machowinski, directing analyst for enterprise networks and video at Infonetics Research, said “While the near term outlook remains positive, ultimately we think the market is headed for a peak, as data center operators improve infrastructure utilization, and adoption of cloud services moves hardware consumption from enterprises to large-scale data center operators.”
Thanks to its partnership with Cisco (who exited the ADC market last year), Citrix is gaining momentum in the ADC space, growing market share by almost 10 points in the last year.
WAN optimization revenue is declining, due to feature integration and market saturation, the report also said.