The following is based on a recent Market Insight report by the cloud and data center analyst team at IHS Markit, which recently joined the Informa Tech family of brands, a family that includes Data Center Knowledge. The original note’s author is Devan Adams, a principal analyst at IHS Markit. The report is available in full to IHS subscribers.
As data center switch vendors reduce their reliance on proprietary/custom silicon, merchant silicon use expands beyond white box vendors to traditional vendor portfolios.
IHS Markit’s Data Center Network Equipment Market Tracker forecast:
- Merchant silicon shipped in DC Ethernet switches will reach 62% of all silicon units in 2023 (up from 56% in 2018);
- Proprietary/custom silicon will drop to near 25% (down from 38% in 2018);
- Programmable silicon will account for 13% (up from 6% in 2018);
- Between 2018 and 2023, growth in data center Ethernet switch data plane forwarding silicon units will be driven by programmable (+20% five-year CAGR) and merchant silicon (+5% five-year CAGR);
- Proprietary units will decline (-6% five-year CAGR)
Intel, Marvell, Nvidia, and Arista are recognizing the trends and have acted fast to capitalize on them by acquiring talent, IP, and technology from some of the innovative companies in the data center market. Here’s what you need to know about these acquisitions:
Intel’s Barefoot Networks Acquisition (June 2019)
Background: Intel has seen its once large presence in the enterprise switching market dwindle over the years. Meanwhile, Broadcom’s merchant silicon has come to dominate data center switching.
So what: The Barefoot deal enables Intel to offer a complete solution that addresses ASICs for Ethernet switches, a business it had a major stake in years ago.
Marvell’s Acquisition of Avera Semiconductor (May 2019) and Cavium (November 2017)
Background: While Marvell has a wide-ranging networking portfolio, it’s been lacking products for the data center, losing out in this area to its main competitor, Broadcom.
So what: Post-acquisition Marvell’s portfolio consists of an expanded offering of data center networking products consisting of HDD and SSD controllers, network switching silicon, wireless, and security products. The team of engineers behind Cavium’s Xpliant programmable switch silicon for data centers is now part of Marvell’s Prestera switch team, and we expect their expertise in the data center switch silicon market to provide an uplift to Marvell’s legacy team.
Nvidia’s Mellanox Acquisition (March 2019)
Background: To date, Nvidia’s data center solutions have revolved around dedicated server components without any specific storage or networking options. Mellanox and Nvidia have collaborated in the past while contributing to the world’s two fastest supercomputers, Sierra and Summit, operated by the US Department of Energy; in addition, many of the world’s top cloud service providers use both NVIDIA GPUs and Mellanox solutions.
So what: The additional Mellanox resources that Nvidia acquires will play a significant role in enabling it to successfully extend its portfolio into other growing parts of the cloud and data center markets.
Arista’s Acquisition of Mojo Networks (August 2018) and Metamako (September 2018)
Background: Fifteen-year-old Arista’s rise in the data center switching market – its 2018 market share was 16% – can be attributed to its advanced switching portfolio and experienced leadership consisting of Chief Development Officer and Chairman Andy Bechtolsheim, previously from Sun Microsystems, and President and Chief Executive Officer Jayshree Ullal, previously from Cisco Systems.
So what: The Mojo deal shows Arista is expanding its data center–only target market to bring the principles of networking used by cloud providers (scalability, merchant silicon, and software control) to campus networks. The switches it launched as a result of the Metamako deal are designed for ultra-low latency, high-precision use cases such as those in the financial trading business, further expanding Arista’s addressable market.
Edited by Yevgeniy Sverdlik