The data center switch market will grow by double digits in 2022, and Google may help fuel that growth by debuting 800 Gb/s switch shipments, Dell’Oro Group's Senior Research Director Sameh Boujelbene predicts.

Data center switch sales across the cloud segment grew by double digits last year, while the non-cloud segment increased in the mid-single digits, which is in line with Boujelbene’s expectations. 

She expects the market spotlight to continue shining this year if supply permits, with the cloud segment growing at almost twice the rate as the non-cloud segment. Ongoing pent-up demand for switches among tier two and tier three cloud service providers will fuel the cloud segment, and digital acceleration will foster non-cloud segment growth, according to Boujelbene.

“Although the panic purchasing behavior fueled by ongoing supply challenges is one of the major drivers for such a robust market forecast, there are also some fundamental catalysts behind the strong demand we expect to remain in the market,” she wrote in a blog post.

However, Dell’Oro Group's analysts do not expect the supply issue to improve until the second half of this year, so those constraints may continue to threaten market performance. 

High-Speed Switch Adoption Goes Beyond Google and Amazon

Accelerated adoption of 200 Gb/s and 400 Gb/s switches are also expected to propel data center spending.

High-speed switch shipments have been mainly consumed by Google and Amazon to date. Shipments to Microsoft and Meta started to accelerate late last year, but revenue from some of those shipments deferred to this year due to a pending qualification cycle, according to Boujelbene. Because of this, she predicts 200 Gb/s and 400 Gb/s ports to more than double in 2022.

Accelerated adoption among hyperscalers will also benefit top switch vendors. 

“While the 200 and 400 Gb/s adoption at Google and Amazon mostly benefited the white box switch vendors, the accelerated 200 and 400 Gb/s deployment at Microsoft and Meta will benefit certain branded vendors such as Arista and Cisco,” Boujelbene wrote in response to questions. 

800G Switch Brings Lower Cost, Higher Efficiency

Even though most data centers haven’t adopted 200 Gb/s and 400 Gb/s switches, Boujelbene expects Google to deploy 800 Gb/s switches this year, driven by the availability of 800 Gb/s optics.

Data centers can also reduce cost per bit at a system level with 800 Gb/s switches because 800 Gb/s optics cost about 30% less than two discrete 400 Gb/s optics, according to Boujelbene.

Switch chip capacity will also double from 12.8 Tb/s to 25.6 Tb/s thanks to 100 Gb/s Serializer/Deserializer (SerDes) technology, she added. And 800 Gb/s switches will “allow those chips to be configured in 1 unit fixed factor as 32 ports of 800 Gb/s,” with each port potentially configured as two 400 Gb/s or eight 100 Gb/s ports, she wrote.