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A Place within the Network as the Platform

The datacenter network market reached $8.7 billion in 2007, up 17 percent from $7.6 billion in 2006, according to one of three new "Place in the Network" market studies published by IDC.

The IDC study shows that the datacenter network continues to support strategic initiatives, including customer migrations to new virtualized dense computing in the datacenter.

As a result, IDC predicts this market will continue to grow at a healthy 6 percent compound annual growth rate (CAGR), reaching $11.9 billion in 2012.

"The datacenter is in the midst of unprecedented change driven by a combination of factors all converging to make the datacenter a real-time responsive resource for organizations," said Lucinda Borovick, research vice president, Datacenter Networks.

"Our research shows that the datacenter network has an important and unprecedented role to play in the datacenter of the future as infrastructure changes, such as multicore processors and server virtualization combined with fundamental changes in utility cost structures, drive a shift in the very nature of datacenter buildouts."

In addition to the datacenter, the remote branch office is becoming one of the top network IT initiatives of the decade. According to another recent "Place in the Network" study, many enterprises see a strategic opportunity to provide value at the branch, as the closest point of contact to the customer.

IT organizations want to deliver resources to support branch office growth while keeping operational and management costs in check.

"Enterprises view the branch as a critical beachhead for IT to deliver business value to the enterprise. Remote branch networking revenue will reach $13.9 billion by 2012," continued Borovick.

In a third new study, Network Equipment Spending by Place in the Network, IDC presents an analysis of how and where end users are spending their data network equipment budget. Place-in-the-network shifts are creating opportunities for enterprise network equipment suppliers.

While most opportunities today remain in the core network, IDC believes that vendors should be aware of branch office and other remote user trends relative to teleworkers and temporary networks.

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