SAN JOSE, California — Open Compute Project (OCP) board members including Facebook, Microsoft, and Intel aren’t shy about sharing their open hardware success stories. But does the reach of OCP data center gear like servers and switches extend beyond these tech giants?
The answer is yes. OCP market impact surpassed $1 billion last year, according to new data from IHS Markit released this week at the OCP Summit in San Jose, California. But it’s still only about 1 percent of the overall market value, which IHS Markit says reached $13.7 billion in 2017.
OCP engaged the analyst firm to gauge adoption of OCP gear in the data center industry and determine revenue generated from non-board member companies. OCP board member companies are Facebook, Goldman Sachs, Intel, Microsoft, and Rackspace.
IHS Markit interviewed OCP members, suppliers, and service providers. Equipment markets explored in this study included servers, storage, switches and other networking gear, racks, power, and peripherals. In addition to 2017 numbers, IHS Markit also provided a 2021 forecast.
In 2017, OCP equipment revenue reached $1.2 billion from non-board member companies. By 2021, the analyst firm expects that figure to reach $6 billion, or about 5 percent of the total $156 billion market. Cost reductions (79 percent) and power efficiency (42 percent) are the top adoption drivers.
The 2017 OCP year-over-year growth from non-board member companies was 103 percent, said IHS Markit analyst Cliff Grossner at the OCP Summit. The five-year compound annual growth rate is 59 percent for these companies, and their revenue growth remains in the high double-digits out to 2021 (see chart below). Meanwhile, the total market is growing in the low single digits.
Servers accounted for almost 75 percent of non-board OCP revenue in 2017. But rack, power, peripherals, and other (primarily WiFi and passive optical networks or PONs) can expect the highest growth rates over the forecast period.
The Americas region represented the majority of non-board OCP revenue in 2017, due to non-board hyperscaler, telco, and financial industry adoption. And while the Americas (primarily the U.S.) will dominate through 2021, Europe, the Middle East and Africa (EMEA), and Asia-Pacific revenue will continue to grow. EMEA revenue, largely driven by telco adoption, is expected to surpass $1 billion by 2021, while Asia-Pacific is expected to surpass EMEA in adoption as early as 2020.
Telco Cloud: ‘The Next Wave’
“Telco cloud is the next wave for OCP,” Grossner said. According to IHS Markit, telcos increased proof of concepts in 2017. They will ramp up production trials this year with scale deployments beginning in 2019. Total telco spending on OCP will surpass non-board hyperscalers in 2021.
In fact, telcos — which see OCP helping with their 5G deployments — show the most interest in OCP gear, according to vendors surveyed by IHS Markit. Eighty-four percent of vendors say telcos show the most interest, followed by hyperscalers (74 percent).
Barriers to Adoption
The survey also looked at top barriers to OCP adoption and found integration with existing equipment and environments top the list (79 percent). Organizational challenges (53 percent), a lack of a robust software ecosystem (42 percent), manageability (42 percent), and usability (37 percent) round out the top five.
“Clearly we heard education is a challenge,” Grossner said. “Customers still apparently don’t know where to buy OCP equipment.” Customers also need mechanisms to trial the gear and determine if it’s a fit for their data center, he added.