February 9, 2012

Two Reports Predict Continued Industry Gear Growth

Fibre Channel (FC) switch and adapter revenues are forecast to rise to $2.8 billion in 2016 at a compounded annual growth rate (CAGR) of about 3 percent, according to one new storage area network (SAN) report from Dell’Oro Group.

“Virtualization and cloud initiatives have driven tremendous growth in the datacenter, providing new and exciting opportunities in storage,” says Dell’Oro analyst Casey Quillin. “In order to benefit from the inherent flexibility provided by the ‘provisioning on demand’ feature of server virtualization, the storage available to these virtual servers also needs to be flexible and able to scale. SAN storage virtualization has the potential to address these concerns, and we expect FC to realize a boost from this trend.”

He continues, “Additionally, cloud storage is generating interest as enterprises seek to realize the cost savings provided by outsourcing some of their storage needs to the cloud. This increasing demand is requiring cloud storage service providers to grow their storage infrastructure on a massive scale and we predict this to have a positive impact on FC growth as well.”

In a second forecast report released by Dell’Oro Group, overall 10 Gbps Ethernet Controller and Adapter revenues could see a CAGR of 33 percent in the next five years, fueled by increases in server I/O processing capacities, virtualization and “big data.”

According to Sameh Boujelbene, who covers controller & adapter market research for the group, “Unlike the previous network speed migration from 100 Mbps to 1 Gbps, the transition toward 10 Gbps is happening first with the so-called “daughter adapter” instead of native LAN-on-Motherboard (LOM). Major server manufacturers are going with “daughter adapters” because they provide flexibility in terms of brand and features, and we expect these adapters to persist through our forecast horizon.”

Furthermore, “we believe server manufacturers will keep 1 Gbps on the motherboards of servers, and that interim solutions with a combination of 1 Gbps and 10 Gbps on the same controller/adapter will emerge to help end-users through the 10 Gbps migration,” he adds.