2018 set all sorts of records in the data center in terms of port shipments, revenue and the amount of CAPEX spent by the largest cloud providers. Looking forward to 2019, we see a year of technology innovation and rapid change as technology adoption cycles compress further.
112Gbit/s SerDes will begin sampling
With 56Gbit/s SerDes just now starting to ship, 2019 will see a host of announcements on next-generation 112Gbit/s SerDes shipments. There will be a lot of design and integration effort in 2019 behind enabling the market to move quickly to 112Gbit/s SerDes.
7nm is the critical technology for 400Gbit/s
All announcements through the end of November 2018 for 400Gbit/s switch chips were based on 16nm technology. By the time the industry gets enough optics volume and enters 2020, the market will move quickly to 400Gbit/s chips based on 7nm technologies.
Chip design will embrace disaggregation – chiplets will become common
The move towards 7nm-based silicon will also start to usher in the chiplet semiconductor architecture, where switch chips and SerDes are developed separately. This will allow for increased product agility and speed and will begin the move towards on-board optics and photonics.
DCI spending will explode alongside 400Gbit/s data center ramp
One of the first use cases for 400Gbit/s will be in the aggregation/core part of the network. Cloud providers will look at 400Gbit/s and above for connecting their data center properties together. This will cause DCI to become a larger part of cloud CAPEX in 2019 and 2020.
Enterprise AI will become more mainstream, and will change network topologies
Artificial intelligence will continue to see massive investment dollars in 2019. The impact on the network will be significant and cause a change in how networks evolve in the data center. We’ll see more network programmability and increased migration to higher speeds because of AI.
Cloud provider architectures will become more proprietary
2019 will see the major US cloud service providers build their own custom server processors, AI processors and network interface cards, increasing the amount of data center spend that is proprietary and purpose built for each company. This will further impact how the supply chain interfaces with cloud service providers and create a mini arms race between them.
Enterprise SD-WAN will drive DC buildouts in colocation providers
As enterprises move from planning to production on their SD-WAN deployments, enterprises will take advantage of the benefits of putting servers in colocation. This will help drive the colocation market and put pressure on some regional colocation companies to consolidate.
OSFP and DDQSP form factors will battle in the market
No change from last year – we’ll have more than one form factor in early 200Gbit/s and 400Gbit/s shipments. This multi-form-factor purchasing 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.
Social media regulation will occur in the US
The US will look at regulating part or all of certain social media companies. This will put new rules on data sovereignty and usage for advertising, which does change where and how data centers are constructed. The base case will be European-like rules, with more concrete regulation possible.