Study: the average cost of switches decreases - we understand why
Prices for switches for data centers in 2018 decreased. Analysts expect the trend to continue in 2019. Under the cut, we understand the reason.
/ Pixabay / dmitrochenkooleg / PD
According to the report of the research organization IDC, the global market for data center switches is growing - in the fourth quarter of 2018, the volume of sales of Ethernet switches increased by 12.7% to $ 7.82 billion. Despite the increase in demand, the price of devices for 2018 decreased. The most significant cost fell for 100GbE: at the end of 2017, it was $ 532 per port, and at the end of 2018 - already $ 288 per port. The price has also dropped for 40GbE - from $ 478 to $ 400 per port.
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IDC data is confirmed by Crehan Research report. According to their research , for 2014–2018, the cost of ethernet switches fell by an average of 5%. Gartner experts also point out price cuts: last year they advised data centers to switch from 10GbE and 40GbE technologies to 100 GbE due to lower prices for equipment. Experts talk about several reasons.
Switch makers are forced to lower prices for their devices due to competition from whitebox solutions. Increasingly, companies and data centers prefer "bezbrendovym" switches because of the greater possibilities for customization of such devices - they work with a large number of different operating systems and NFV- solutions.
Also, whitebox systems are often cheaper than proprietary switches. An example would be the case of one of the gaming companies - the whitebox device cost the organization twenty times cheaper than a similar system from IT giants.
Today, whitebox devices are being released even by large IT companies. In March, Facebook introduced its switchboard - it has 100GbE and 400GbE ports. His specification will be given to the Open Compute project and made fully open.
According to Statista, by 2021, 94% of data center workloads will be virtualized. At the same time, the introduction of virtual network devices is one of the three top priorities for data center operators in Europe and North America. This trend leads to lower demand for physical switches and the proliferation of SDN solutions.
It is expected that in the next three years the volume of traffic passing through SDN-systems of data centers will more than double : from 3.1 zettabyte to 7.4 zettabyte. Analysts say that this, again, will cause an increase in demand for whitebox routers.
Cost reduction is also associated with the active development of Ethernet and the emergence of new standards. In 2018, network device manufacturers began the transition to 400GbE: commercial 400 Gigabit products were introduced by Cisco, Juniper and Arista.
The development of a new standard leads to a drop in prices for previous generations of Ethernet. The most significant decline last year was the cost of 100GbE devices. It turned out to be unexpected even for analysts - according to representatives of the research group Dell'Oro, experts predicted that prices would drop to the level of the end of 2018 only for the last quarter of 2019.
The decline in the cost of 100GbE specialists is also associated with the development of technology. Manufacturers have manufactured 100-gigabit devices since about 2011 — during this time, production has improved, and the cost of creating switches has decreased.
/ Wikimedia / Alexis LĂŞ-QuĂ´c / CC BY-SA
Servers, unlike switches, only become more expensive. The increase is associated with an increase in the cost of processors: in 2018, the market was faced with a shortage of chips from Intel due to a sharp increase in demand for CPU from data centers. Under the conditions of a shortage of processors, their value at some retailers has increased by one and a half times.
It is expected that the shortage of chips will remain at least until the third quarter of 2019. At the same time, demand continues to grow: many data centers replace old chip models with new ones that are protected from Specter and Meltdown vulnerabilities. Probably, the prices of processors and servers in this situation will increase further.
If we consider the scope of data storage, there is a decrease in the cost of solid-state drives (SSD). According to Gartner, the price of SSD from 2018 to 2021 will fall 2.5 times. If this happens, experts say that solid-state drives will begin to actively drive out hard drives from data centers. HDDs take up too much space and are less reliable than SSDs. If for solid-state drives, the failure rate is 0.5%, then for hard drives this figure is 2–5%.
In general, it can be said that the cost reduction is associated with the rapid development of the data center equipment market. In the future, prices may fall on another “hardware” for data centers.
Whitebox solutions in the server segment are becoming increasingly popular. If this trend continues, the prices for server hardware may begin to change in the lower direction.
/ Pixabay / dmitrochenkooleg / PD
Trends
According to the report of the research organization IDC, the global market for data center switches is growing - in the fourth quarter of 2018, the volume of sales of Ethernet switches increased by 12.7% to $ 7.82 billion. Despite the increase in demand, the price of devices for 2018 decreased. The most significant cost fell for 100GbE: at the end of 2017, it was $ 532 per port, and at the end of 2018 - already $ 288 per port. The price has also dropped for 40GbE - from $ 478 to $ 400 per port.
')
IDC data is confirmed by Crehan Research report. According to their research , for 2014–2018, the cost of ethernet switches fell by an average of 5%. Gartner experts also point out price cuts: last year they advised data centers to switch from 10GbE and 40GbE technologies to 100 GbE due to lower prices for equipment. Experts talk about several reasons.
High competition
Switch makers are forced to lower prices for their devices due to competition from whitebox solutions. Increasingly, companies and data centers prefer "bezbrendovym" switches because of the greater possibilities for customization of such devices - they work with a large number of different operating systems and NFV- solutions.
Also, whitebox systems are often cheaper than proprietary switches. An example would be the case of one of the gaming companies - the whitebox device cost the organization twenty times cheaper than a similar system from IT giants.
Today, whitebox devices are being released even by large IT companies. In March, Facebook introduced its switchboard - it has 100GbE and 400GbE ports. His specification will be given to the Open Compute project and made fully open.
Reading on the topic in our corporate blog:
Virtualization Distribution
According to Statista, by 2021, 94% of data center workloads will be virtualized. At the same time, the introduction of virtual network devices is one of the three top priorities for data center operators in Europe and North America. This trend leads to lower demand for physical switches and the proliferation of SDN solutions.
It is expected that in the next three years the volume of traffic passing through SDN-systems of data centers will more than double : from 3.1 zettabyte to 7.4 zettabyte. Analysts say that this, again, will cause an increase in demand for whitebox routers.
Technology maturity
Cost reduction is also associated with the active development of Ethernet and the emergence of new standards. In 2018, network device manufacturers began the transition to 400GbE: commercial 400 Gigabit products were introduced by Cisco, Juniper and Arista.
The development of a new standard leads to a drop in prices for previous generations of Ethernet. The most significant decline last year was the cost of 100GbE devices. It turned out to be unexpected even for analysts - according to representatives of the research group Dell'Oro, experts predicted that prices would drop to the level of the end of 2018 only for the last quarter of 2019.
The decline in the cost of 100GbE specialists is also associated with the development of technology. Manufacturers have manufactured 100-gigabit devices since about 2011 — during this time, production has improved, and the cost of creating switches has decreased.
/ Wikimedia / Alexis LĂŞ-QuĂ´c / CC BY-SA
What is happening in other markets for data center equipment?
Servers, unlike switches, only become more expensive. The increase is associated with an increase in the cost of processors: in 2018, the market was faced with a shortage of chips from Intel due to a sharp increase in demand for CPU from data centers. Under the conditions of a shortage of processors, their value at some retailers has increased by one and a half times.
It is expected that the shortage of chips will remain at least until the third quarter of 2019. At the same time, demand continues to grow: many data centers replace old chip models with new ones that are protected from Specter and Meltdown vulnerabilities. Probably, the prices of processors and servers in this situation will increase further.
If we consider the scope of data storage, there is a decrease in the cost of solid-state drives (SSD). According to Gartner, the price of SSD from 2018 to 2021 will fall 2.5 times. If this happens, experts say that solid-state drives will begin to actively drive out hard drives from data centers. HDDs take up too much space and are less reliable than SSDs. If for solid-state drives, the failure rate is 0.5%, then for hard drives this figure is 2–5%.
findings
In general, it can be said that the cost reduction is associated with the rapid development of the data center equipment market. In the future, prices may fall on another “hardware” for data centers.
Whitebox solutions in the server segment are becoming increasingly popular. If this trend continues, the prices for server hardware may begin to change in the lower direction.
Posts on a subject from our blog on Habré:
Source: https://habr.com/ru/post/447040/
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