Mixed fortunes for tech market as pandemic unfolds

A series of new findings from independent analyst firm Dell’Oro have predicted mixed fortunes for different areas of the technology market as a result of the COVID-19 pandemic.


Dell’Oro has suggested that the data centre switch market is set for growth of 4% CAGR in the years up to 2024, approaching $17bn by the end the period. The findings showed only a slight downward adjustment from a prior January growth forecast of 5%.


“Most of the downward adjustment was driven by the non-cloud segment, which includes enterprises as well as telco service providers,” commented Tam Dell’Oro, Founder and CEO of Dell’Oro Group. “The non-cloud segment comprises about 60% of the total data centre switch revenue and accounted for more than 70% of the downward adjustment for every year during our forecast period.”


The cloud segment includes the top four US cloud players: Google, Amazon, Microsoft, and Facebook, as well as the top three Chinese providers: Alibaba, Tencent and Baidu, and other Tier 2 or 3 cloud SPs that are mostly content cloud providers.



Dell’Oro has also looked at the campus switch market which it expects to be profoundly impacted by the COVID19 pandemic, declining by 1% CAGR up to 2024, compared to a prior January upwards forecast of 3% CAGR.


“It is very important to recognize how this pandemic-induced recession may differ from the prior two recessions, not only at a macro level but also from a technology perspective,” said Dell’Oro. “COVID-19 will bring many changes to our lives and will impact the adoption of technology in different ways. Some of these changes may be short-term, but we believe a number of them will remain with us for the long term.”


The network security and data centre appliance market meanwhile is forecast to grow at 6% five-year CAGR and go from $14bn in 2019 to $19bn in 2024.


“Growth at 6% is slightly weaker than the typical high single-digit pattern we have seen over the last decade, but considering the ongoing COVID-19 pandemic is explicable,” concluded Dell’Oro.


The following event will consider the impact of the pandemic on IT budgets around the world.

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