In the 10Gb Ethernet (10GbE) market, we will see market expansion at over 50 percent annually during the next four years, according to Crehan Research (see chart below). As we have said many times, the growth of 10GbE will come in many waves. We are about to experience a new phase of growth in the 10GbE market with the addition of the rack server business to our current leadership in the blade server market. According to the last published report by Crehan Research (Q2 2011 Server-class Adapter and LOM market share report), the total 10GbE market was $104 million for calendar year (CY) Q2 in 2011, or about $408 million on an annual basis. This business has been primarily driven by LAN on Motherboards (LOMs) and mezzanine cards on blade servers and Fibre Channel over Ethernet (FCoE) Converged Network Adapters (CNAs) and 10GbE Network Interface Cards.
As you can see in the chart above, the green line represents blade server connect rates of 10GbE. This market took off at the Nehalem transition as we discussed two years ago. Given that HP, who controls over half of the blade server market (IDC Worldwide Quarterly Server Tracker 2011 Q2 Report), has chosen to go chip-down with 10GbE LOMs, IBM is offering 10GbE blade configurations for its Virtual Fabric Architecture (VFA) architecture and Cisco UCS blade servers include 10GbE, over 50 percent of blade servers are being shipped with 10GbE capabilities today. By the end of the year, the overall blade market is expected to grow to a 67 percent 10GbE connect rate in CY 2011 and that it will continue to grow, reaching nearly 100%, in the next four years¹.
The next major transition will be Romley-based servers, where Original Equipment Manufacturers (OEMs) are adding modular LOMs and chip-down LOMs that include 10GbE. The orange line is the connect rate for 10GbE on rack servers, which, this year, will reach about 15 percent, according to Crehan Research. The grey line, in the chart above, shows the jump in the 10GbE connect rate at the Romley transition. This is when OEMs will offer almost every server with 10GbE modular or chip-down LOMs. This will drive the overall market for 10GbE from around $400 million today to more than $1 billion by 20141. As we enter this next wave of 10GbE growth, we will see new opportunities in the 10GbE Adapter and LOM market for rack servers in CY 2012 and beyond.