- Network switches 15 to 40 percent become more expensive, and
- the delivery times increase three to nine months increase (two more months in mid-2025).
According to Gartner, the bottlenecks are likely to ease again in mid-2027, but falling prices are not expected: “In general, providers in these network markets do not have a consistent track record of price reductions,” says Lerner.
At the same time, it is to be expected that providers with regard to network switches are unlikely to invest in significant innovations, as the Gartner man predicts: “The providers follow a mentality based on the motto ‘Keep the fire burning, don’t let the flame go out’. They are not giving up on the 100,000 traditional data center customers, but are using their resources elsewhere.”
Zeus Kerravala, founder and chief analyst at ZK Research, assesses the situation similarly: “Cisco, Arista, Juniper and all other providers of data center equipment are primarily focusing their resources on AI because they want to participate in the large-scale projects associated with it. A lot of money is flowing into Neoclouds and similar things. They have reprioritized their resources according to market demand.”
“Order early”
Lerner’s first advice to mitigate these effects is to hold on to existing assets for longer: “Many companies renew or update their systems before they actually need to. Partly because they want to be on the safe side.”
The analyst therefore appeals to companies to think beyond the end-of-life guidelines of the respective manufacturers: “Also consider other factors. For example, whether the current equipment meets the requirements and is easy to use. The level of innovation in the market should also play a role – or the question of whether new network switches can really implement useful, new features or functions.”
According to Lerner, another measure would be to aim for better utilization of the existing network switches: “As a rule, only half of the 48 or 36 ports of a top-of-rack switch are used. In order to increase the utilization of servers and switches, companies could also increase their VMware density ratios.”
