Following is information and insight from IHS Markit about our H2 2016 Networking Ports: 1G, 2.5G, 10G, 25G, 40G, 100G Biannual Market Tracker, which includes data for the half-year ended June 30, 2016.
- Deployments of 1G/2.5G/10G/25G/40G/100G port shipments grew significantly in 2015 from the prior year
- Enterprises and service providers are investing in their networks to accommodate increasing demands on their networks posed by bandwidth-intensive and latency-sensitive applications
- Worldwide 1G port revenue peaked in 2015 and will continue to decline
Globally, 1G/2.5G/10G/25G/40G/100G port shipments jumped 32 percent in 2015 from 2014 to 743 million, and revenue grew 6 percent to $46 billion, driven by continued growth in network traffic and the need for constant network upgrades. Through 2020, we expect average annual revenue growth of 3 percent.
1G Port Revenue Has Peaked
1G delivers the bulk of ports and 10G delivers the bulk of revenue, but both segments are maturing and are no longer the growth engines of the 1G/2.5/10G/25G/40G/100G market. Instead, growth is coming from the newer 2.5G, 40G and 100G segments.
However, despite their diminishing revenue contribution 1G ports will play a crucial role in driving overall port growth as service providers and enterprises upgrade their access networks to 1G speeds.
High-Speed Port Revenue to Reach $39B in 2020
Until now, the main growth action in networking ports has been in high-speed port shipments—those 10G and higher—but this was not the case in 2015, when high-speed port growth stood at 18 percent (46 million ports) and revenue came in at $26.7 billion (up 5 percent from 2014). Port growth is being impacted by the move to high-density solutions that allow a single higher-speed port to serve multiple lower-speed links. And revenue growth is being affected by the transition to 25G/100G.
Still, high-speed port revenue growth will pick up again, with revenue projected to reach $39 billion in 2020—a 2015–2020 compound annual growth rate (CAGR) of 8 percent. By 2020, we expect the number of annual high-speed port shipments to exceed 154 million.
100G Won, 40G Lost in the Service Provider Market
Service providers are moving on from 10G to 100G, and shipments of interim 40G to service providers are plunging. However, this is more than made up for by surging 40G shipments into the data center market. We expect this to last through 2017, after which the data center market makes the transition to 100G as well.
100G port shipments almost doubled in 2015, benefitting from surging service provider demand for 100G wavelength-division multiplexing (WDM) and from enterprise and data center deployments, which grew significantly at the end of 2015 as low-cost optics came to market. In 2016, enterprise/data center 100G shipments will exceed those to service providers.
Networking Ports Report Synopsis
The IHS Markit networking ports report explores the demand for 1 Gigabit, 2.5 Gigabit, 10 Gigabit, 25 Gigabit, 40 Gigabit and 100 Gigabit optical and Ethernet ports, the size of the market and how fast each segment is growing, and which technologies and speeds are being adopted on various types of enterprise and service provider equipment.