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Datacenter Network Market to Grow 6% to Reach $11.9 Billion By 2012, IDC Study Reveals

September 22, 2008

The datacenter network market reached $8.7 billion in 2007, up 17% from $7.6 billion in 2006, according to one of three new “Place in the Network” studies published by IDC. The study, Worldwide Datacenter Network 2008-2012 Forecast (IDC #213520), shows that the datacenter network continues to support strategic initiatives, including customer migrations to new virtualized dense computing in the datacenter. As a result, IDC predicts this market will continue to grow at a healthy 6% compound annual growth rate (CAGR), reaching $11.9 billion in 2012.

“The datacenter is in the midst of unprecedented change driven by a combination of factors all converging to make the datacenter a real-time responsive resource for organizations,” said Lucinda Borovick, research vice president, Datacenter Networks. “Our research shows that the datacenter network has an important and unprecedented role to play in the datacenter of the future as infrastructure changes, such as multicore processors and server virtualization combined with fundamental changes in utility cost structures, drive a shift in the very nature of datacenter buildouts.”

In addition to the datacenter, the remote branch office is becoming one of the top network IT initiatives of the decade. According to another recent “Place in the Network” study, Worldwide Enterprise Remote Branch Network 2008-2012 Forecast (IDC #212831), many enterprises see a strategic opportunity to provide value at the branch, as the branch is often the closest point of contact to the customer. IT organizations want to deliver resources to support branch office growth while keeping operational and management costs in check.

“Enterprises view the branch as a critical beachhead for IT to deliver business value to the enterprise. Remote branch networking revenue will reach $13.9 billion by 2012,” continued Borovick.

In a third new study, Network Equipment Spending by Place in the Network (IDC #213885), IDC presents an analysis of how and where end users are spending their data network equipment budget. Place-in-the-network shifts are creating opportunities for enterprise network equipment suppliers. While most opportunities today remain in the core network (datacenter and headquarters/campus), vendors should be aware of branch office and other remote user trends relative to teleworkers and temporary networks.

IDC’s innovative “Place in the Network” research is available through the following research studies:

— Worldwide Datacenter Network 2008-2012 Forecast, (IDC #213520)

— Worldwide Enterprise Remote Branch Network 2008-2012 Forecast, (IDC #212831)

— Network Equipment Spending by Place in the Network (IDC #213885)

— Remote Branch of the Future (IDC #212655)

About IDC

IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. For more than 44 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world’s leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.

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