AI accelerates network investments
More network capacity will be needed for AI deployments, industry observers note.
According to research firm IDC, revenue for the data center portion of the Ethernet switching market will grow 13.6% in 2023 as businesses and service providers need ever-faster Ethernet switches to support supports fast-moving AI workloads. “To illustrate this point, 200/400 GbE switch revenue grew 68.9% for the full year 2023,” said Brandon Butler, an analyst at IDC, in a statement. World of networks article.
“The Ethernet switching market in 2023 was dominated by the impact of AI, with the overall market growing 20.1% in 2023 to $44.2 billion,” Butler said.
Dell’Oro Group also recently wrote about how AI networks will accelerate the transition to higher speeds. “For example, 800 Gbps is expected to make up the majority of ports in AI back-end networks by 2025, just two years after the introduction of the latest 800 Gbps product,” wrote Sameh Boujelbene, vice-president of the Dell’Oro group.
“Although most of the market demand will come from Tier 1 cloud service providers, Tier 2/3 and large enterprises are expected to be significant, approaching $10 billion over the next five years. The latter group will favor Ethernet,” Boujelbene said.
Ethernet, as a technology, requires considerable investment and is evolving rapidly, Wollenweber said. “We went from 100G to 400G to 800G, and now we’re building 1.6 terabit Ethernet, and that’s the predominant networking technology for the rest of the data center as well,” Wollenweber said.