2018 will be a year of rapid innovation and product launches for data center networking. We will see seven big technology events and one legislative change in 2018 that will be entry points for new vendors and the market will show a more distinct boundary between enterprise data centers and the cloud.
56Gbit/s SerDes will ship in large volumes
56Gbit/s SerDes are the building block for 50Gbit/s lanes, which will enable next-generation 200Gbit/s and 400Gbit/s products. Why we care is simple: the cloud is desperate for bandwidth; it is buying record amounts of equipment; and the cloud impacts every person more and more each day. We will see significant market introductions of 56Gbit/s SerDes, as well as shipments, by the summer of 2018. The timing of product announcements versus first shipments will not follow historical patterns given the behavior of the target customers. This is also an area where the ecosystem is fighting for vendor diversity. We expect that there will be significant vendor maneuvering to get design wins going forward.
200Gbit/s and 400Gbit/s Ethernet switches will ship
We will see both 200Gbit/s and 400Gbit/s Ethernet switches ship in material volume in 2018 with each major cloud provider taking a slightly different approach to technology and adoption timelines. This will bring the total number of different speeds offered in data center switching to eight. Extensive supply chain interviews in 2H17 indicate that there is a “Wild West” approach with supply of optics and silicon determining when a cloud provider will shift to the new technology – nothing new on that front. But, we expect next year’s shipments of cutting edge 200 and 400Gbit/s to be at a larger scale than 100Gbit/s was at its introduction.
OSFP and DDQSP form factors will battle in the market
We will have more than one form factor in early 200Gbit/s and 400Gbit/s shipments. This is occurring at more than one cloud customer and with two unique form factors, and it will put significant burden on the supply chain, which will likely need to support two form factors for much of the first generation of 400Gbit/s products.
Record numbers of unique data center switches will ship
We will see a record number of unique platforms ship in 2018, not only those based on the new technologies above but also based on customer-specific silicon. There will be over one dozen unique silicon offerings for the data center by the end of 2018, shattering any previous record by a significant amount. There will be unprecedented customer choice.
Latency will become more strategic
Data center latency to the customer, to devices, and to peering points will become more important. While it is simple to see why high latency in virtual reality can cause nausea, many more applications from DCI to AI, AR, and peering all benefit from lower network latency. When the latency is low enough, new applications open up to consumers. This will likely manifest itself in the market with system vendors offering lower latency products, but also in cloud and colocation providers touting latency as a differentiator.
Change in net neutrality laws in the United States
The likely repeal of net neutrality will change how US-based cloud providers, ISPs and consumers interact and pay for bandwidth. It will likely accelerate cloud provider DCI spend in 2018. The wider a cloud provider’s own network, the less it has to worry about net neutrality and, even more importantly, the better it can control its own costs.
DCI spending will explode
If there is one thing that cloud providers like, it is lowering cost at scale. Building giant private networks accomplishes this goal and we expect to see DCI spending explode, especially after the introduction of 12.8Tbit/s line cards and 1RU fixed boxes that offer unprecedented amounts of bandwidth. This new bandwidth will help usher in new and more efficient network topologies.
AI and AR will battle for the next coolest thing
Augmented reality was really kicked off in 2017 following the new iPhone and Pokémon Go in 2016. At the same time, artificial intelligence saw massive investment dollars flow into the sector and something we haven’t seen in technology for a long time happened: building chips became cool again in 2017. Both AI and AR transform how networks are built in a fundamental way. They change how and where packets are routed and they increase the importance of the network. Many of the technologies previously mentioned will help enable the further consumerization of AI and AR, and that is good for the networking market.