Dell'Oro Group Predicts 50% Jump in Data Center Switch Market

By Greg Tavarez, TMCnet Editor  |  January 29, 2024

AI continues to shape the data center landscape by driving unprecedented demands for computational power, storage and network bandwidth. AI applications span from natural language processing to computer vision. Therefore, data centers are evolving to accommodate the unique requirements of these workloads, necessitating specialized hardware such as GPUs and TPUs optimized for parallel processing.

Generative AI (GenAI) is further intensifying the need for robust infrastructure capable of handling massive datasets and complex computations. As GenAI technologies advance, data centers must support the increasing demands for training and inference tasks, fostering innovations in hardware design, energy efficiency and data management strategies.

As a result, the AI back-end network revolution is about to supercharge the data center switch market, driving a 50% expansion over the next few years, according to a Dell’Oro Group report. Forget the standard, humdrum servers and switches; these AI behemoths need a different breed of network infrastructure, built for speed, scalability and brawn.

“Several large AI applications currently handle trillions of parameters, with this count increasing tenfold annually,” said Sameh Boujelbene, Vice President at Dell (News - Alert)'Oro Group. “This rapid growth necessitates the deployment of thousands or even hundreds of thousands of accelerated nodes. Connecting these accelerated nodes in large clusters requires a data center-scale fabric, known as the AI back-end network, which differs from the traditional front-end network used mostly to connect general-purpose servers.”

The report predicts a shift towards high-speed switches capable of flinging data around at breakneck speeds – think 800 Gbps by 2025. These aren’t the average office gigabit switches; these are network powerhouses.

This technological struggle isn’t just about raw speed, though. Two major players are duking it out for dominance in the AI network arena: InfiniBand and Ethernet.

InfiniBand boasts lightning-fast performance and specialized hardware optimizations ideal for AI training and high-performance computing. Ethernet, the more ubiquitous but traditionally slower contender, is making a comeback. New advancements like Ethernet Fabrics and Scalable Data Center switches are bringing its scalability and cost-effectiveness to the AI party. 

Despite the surge from Ethernet, InfiniBand is expected to retain its dominance in hyperscale data centers and specific AI workloads demanding its raw power. However, Ethernet is projected to make significant inroads and capture a larger share of the overall AI network market in the long run.

“Network speed is not the only factor. Congestion control and adaptive routing mechanisms are also important,” said Boujelbene. “We analyzed AI back-end network buildouts by the major cloud service providers as well as various considerations driving their choices of the back-end fabric to develop our forecast.”

The AI network boom presents opportunities and challenges for data center operators. On the one hand, it offers a lucrative market for switch vendors and service providers. On the other hand, it requires investments in new technologies and expertise to build and manage these AI-optimized networks.

Organizations that can adapt and leverage AI-optimized network technologies will be well-positioned to thrive in the years to come.

Be part of the discussion about the latest trends and developments in the GenAI space at Generative AI Expo, taking place February 13-15 in Fort Lauderdale, Florida. Generative AI Expo discusses the evolution of GenAI and feature conversations focused on the potential for GenAI across industries and how the technology is already being used to create new opportunities for businesses to improve operations, enhance customer experiences, and create new growth opportunities.

Edited by Alex Passett
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