February 2025 - Dell'Oro Group

Announcement Roundup: CommScope, Cisco, Juniper, and Extreme are gearing up for growth in 2025

The past few months have seen a flurry of vendor announcements. Mobile World Congress (MWC) is looming, and while the conference has traditionally been centered on the telecommunications ecosystem, this year even enterprise networking vendors are under pressure to reveal the next generation products that will be showcased in MWC Barcelona.

After a Slow Start, Wi-Fi 7 hits mainstream and should have a “trickle-up” effect

It feels like ages since the first enterprise class Wi-Fi 7 Access Point (AP) was commercialized in 2Q23. A quick analysis shows that indeed, enterprise Wi-Fi 7 AP introductions have been slightly slower than previous Wi-Fi technologies. It took a full year (4 quarters in the diagram below) for a critical mass of seven vendors to commercialize a Wi-Fi 7 AP for enterprises.

Unlike past versions of WLAN (Wireless Local Area Network), the early Wi-Fi 7 market has been dominated by vendors from China. H3C took an early lead in commercializing the first Wi-Fi 7 AP and in 2024, Huawei shipped the lion’s share of the new technology.

However, over the past few months, a larger portfolio of Wi-Fi 7 APs has become available worldwide. More Wi-Fi 7 APs are supporting the full 6 GHz frequency band, and these APs are power-hungry. As enterprises plan to upgrade their WLAN, they are looking carefully at the LAN infrastructure to determine whether it has the capacity and power available to drive a fully functional Wi-Fi 7 network. Recent vendor announcements aim to address the upcoming opportunities:

On February 24^th, CommScope announced the deepening of their collaboration with Nokia to deliver an optical LAN-driven Wi-Fi 7 network. This partnership involves the integration of Nokia’s OLT into CommScope’s RUCKUS One platform. CommScope commercialized the first RUCKUS Wi-Fi 7 AP back in December 2023, so this solution is ideal for organizations looking for the savings and performance of a fiber LAN coupled with the latest Wi-Fi technology.
Cisco slipped the announcement of its 9172 and 9172H Wi-Fi 7 APs (the 2^nd and 3^rd in the Cisco portfolio) into the Cisco Live EMEA conference in February. Along with the APs, came the announcement of a new Meraki switch, the MS150. This is a cloud-managed multi gig switch, with 60W of PoE ++ to feed those hungry Wi-Fi 7 APs. Cisco is now delivering each Wi-Fi 7 AP in a single worldwide SKU, meaning that global organizations no longer have the complex task of managing inventory by country. The APs can be controlled and managed by a Catalyst controller or can be cloud-managed with the Meraki dashboard.
Also in February, Juniper introduced a new Campus Switch: the fixed form factor EX4000. It is also designed for customers wishing to increase PoE to their LAN, with a PoE budget of 960W. Juniper indicates that the switch is quick to boot (under 2 minutes) and comes with an Intelligent Energy feature which can automatically adjust fan speed and de-activate PoE when ports are not in use.

Announcements start with A (and end with “I”)

Wi-Fi 7’s higher performance comes at the cost of higher management complexity. Fortunately, more
AI-driven network operations features are becoming available, offering an early opportunity for enterprises to use AI to benefit their bottom lines. Three recent vendor announcements target the AIOps opportunity for enterprises:

CommScope’s February announcement highlights new AI features on RUCKUS One, the company’s network assurance platform. For instance, IntentAI^TM attaches network configurations to business outcomes, and EquiFlex^TM promises to boost network capacity by reducing congestion in high-density environments.
At Cisco Live EMEA in Amsterdam, Cisco announced new AIOps enhancements in Meraki (AI Assistant for trouble shooting) and an updated Wi-Fi 7 Radio Resource Management feature that uses an AI engine to more intelligently optimize radio configurations.
With 3 million devices managed in Extreme’s cloud, there is a sizeable potential for the company to offer enterprises advanced AIOps features. In December, Extreme announced Platform ONE, which will deliver an automated experience throughout a customer’s lifecycle. This means that as well as supporting configuration and anomaly detection, it will deliver business functions such as asset management, contract analysis and personalized analytics. In February, Extreme announced the platform would be available for its Managed Service Provider partners. Platform ONE will support Extreme’s portfolio of campus and WAN networking equipment and will be generally available in the second half of 2025. Extreme’s Wi-Fi 7 APs have been shipping since June 2024 and Platform ONE promises that WLAN can be configured in one-click, simplifying impending upgrades.

We are on the doorstep of accelerated Wi-Fi 7 adoption, and arguably, this upgrade will have the biggest impact on the Local Area Network since Wi-Fi was first introduced to the enterprise. 2024 was a difficult year for enterprise networking vendors, with plummeting orders and contracting revenues. Now, the industry digestion period is coming to an end, and enterprises must upgrade their LAN equipment if they want to stay competitive. Things are looking up for the 2025 campus networking market.

Significant Share Shifts Expected in 2025 as Ethernet Gains Momentum in AI Back-end Networks

The networking industry is experiencing a dramatic shift, driven by the rise of AI workloads and the need for new AI back-end networks to connect an ever-increasing number of accelerators in large AI clusters. While investments in AI back-end networks are reaching unprecedented levels, traditional front-end networks needed to connect general-purpose servers remain essential.

At Dell’Oro Group, we’ve just updated our five-year forecast reports for both the front-end as well as the back-end and we’re still bullish on both. Below are some key takeaways:

AI Back-End Network Spending Set to Surpass $100B through 2029 with Ethernet Gaining Momentum

Despite growing concerns about the sustainability of spending on accelerated infrastructure—especially in light of DeepSeek’s recent open-source model, which requires significantly fewer resources than its U.S. counterparts—we remain optimistic. Recent data center capex announcements by Google, Amazon, Microsoft, and Meta in their January/February earnings calls showed ongoing commitment to a sustained high level of AI infrastructure capex supports that view.

We have again raised our forecast for data center switch sales sold in AI Back-end networks with our January 2025 report. However, not all technologies are benefiting equally.

Ethernet is experiencing significant momentum, propelled by supply and demand factors. More large-scale AI clusters are now adopting Ethernet as their primary networking fabric. One of the most striking examples is xAI’s Colossus, a massive NVIDIA GPU-based cluster that has opted for Ethernet deployment.

We therefore revised our projections, moving up the anticipated crossover point where Ethernet surpasses InfiniBand to 2027.

Major share shifts anticipated for Ethernet AI Back-end Networks in 2025

While Celestica, Huawei, and NVIDIA dominated the Ethernet segment in 2024, the competitive landscape is set to evolve in 2025, with Accton, Arista, Cisco, Juniper, Nokia, and other vendors expected to gain ground. We expect the vendor landscape in AI Back-end networks to remain very dynamic as Cloud SPs hedge their bets by diversifying their supply on both the compute side and the networking that goes with it.

Strong Rebound in Front-end Networks Spending in 2025 and Beyond

Despite the challenges in 2024, we expect growth in the front-end market to resume in 2025 and beyond, driven by several factors. These include the need to build additional capacity in front-end networks to support back-end deployments, especially for greenfield projects. These additional front-end network connectivity deployments are expected to include high speeds (>100 Gbps), driving a price premium. Sales growth will be further stimulated by inferencing applications that may not require accelerated servers and will instead operate in front-end networks, whether at centralized locations or edge sites.

The Road Ahead

As AI workloads expand and diversify, the networking infrastructure that supports them—in both front-end and back-end must evolve accordingly. The transition to higher-speed Ethernet and the shifting competitive landscape among vendors suggest that 2025 could be a pivotal year for Ethernet data center switching market.

For more detailed views and insights on the Ethernet Switch—Data Center report or the AI Networks for AI Workloads report, please contact us at dgsales@delloro.com.

Understanding CNAPP and Its Role in Cloud Security

This month, Palo Alto Networks rebooted its Cloud-Native Application Protection Platform (CNAPP) solution, introducing Cortex Cloud as the evolution of Prisma Cloud. CNAPP has emerged as the go-to solution for securing cloud environments across the entire application lifecycle. It integrates multiple security technologies—including Cloud Workload Protection Platform (CWPP), Cloud Security Posture Management (CSPM), Cloud Infrastructure Entitlement Management (CIEM), and Data Security Posture Management (DSPM), among others—into a cohesive system designed to protect applications from development to runtime.

The rise of CNAPP is a response to the increasing complexity of cloud security, as traditional tools struggle to keep up with hybrid and multi-cloud environments. Security teams require solutions that bridge development, deployment, and runtime security while fostering collaboration between IT, DevOps, and security operations. The challenge lies in the fact that traditional cloud security tools operate in silos, leaving organizations exposed to visibility gaps, misconfigurations, and runtime threats that are unique in cloud environments.

The CNAPP Marketplace and Palo Alto Networks’ Position

The CNAPP market is experiencing rapid growth. According to my latest Cloud Workload Security report from 2Q24, CNAPP revenue grew 42% year-over-year in 2Q24 to nearly $700 million. While the development subsegment grew at a slower rate (21%), the deployment (62%) and runtime (37%) segments saw robust adoption as organizations prioritized compliance, visibility, and real-time threat protection.

Palo Alto Networks has been the CNAPP revenue share leader every quarter since 1Q19. However, Palo Alto Networks faces increasing competition from Wiz and CrowdStrike, which saw 94% and 78% growth, respectively, in 2Q24—multiples faster than Palo Alto Networks’ growth rate.

While Palo Alto Networks has historically led the market, it struggled with integration challenges from its acquisition-heavy approach to CNAPP. Palo Alto Networks’ Prisma Cloud amalgamated multiple acquired technologies, leading to fragmented user experiences and operational inefficiencies.

To counter these challenges, Palo Alto Networks has not just rebranded Prisma Cloud as Cortex Cloud but also spent over a year retooling the technologies into its Cortex XSIAM security operations platform. This shift is intended to consolidate disparate security tools, enhance real-time detection, and improve automation across cloud workloads. The move is a direct response to the market’s demand for seamless, deeply integrated CNAPP solutions that not only secure applications but also reduce the burden on security operations centers (SOCs).

The Two Vectors of CNAPP Evolution: Depth and Breadth

The evolution of CNAPP is occurring along two key dimensions: depth and breadth.

Depth: Best-of-Breed Security Across the Lifecycle

Depth refers to how well CNAPP solutions address security challenges across development, deployment, and runtime using best-in-class capabilities. A strong CNAPP should:

- - Identify vulnerabilities early in the development phase, securing Infrastructure-as-Code (IaC) and third-party software components.
  - Provide deep visibility into cloud environments, enforcing compliance and identifying misconfigurations.
  - Deliver robust runtime security, detecting and mitigating real-time threats across containers, virtual machines, and serverless workloads.

Palo Alto Networks’ previous CNAPP approach faced integration challenges due to a patchwork of acquisitions. Each acquired company was best-of-breed in its domain, but its lack of seamless integration limited its overall effectiveness. Palo Alto Networks asserts that Cortex Cloud addresses these challenges by embedding CNAPP capabilities natively within the Cortex XSIAM platform. It aims to create a cohesive experience leveraging AI-driven risk prioritization and automated remediation.

Breadth: Expanding CNAPP’s Role in SecOps

Breadth refers to how CNAPP fits into the broader security operations (SecOps ecosystem. Increasingly, enterprises want cloud security integrated into the totality, including endpoint, network, application, and data security, to provide a holistic view of risk.

This is where Palo Alto Networks is making a strategic play. By merging CNAPP into Cortex XSIAM, the company claims to create a centralized security hub where cloud security is not an isolated function but part of a broader SecOps workflow. According to Palo Alto Networks, the cross-pollination of security data across IT domains (e.g., correlating cloud workload vulnerabilities with endpoint threats) is designed to help security teams shorten the time to value and improve incident response.

If these claims hold, security teams could see faster detection, reduced manual workload, and better alignment between cloud security and enterprise-wide threat management.

Final Thoughts: The Future of CNAPP and Cortex Cloud

The rebranding of Prisma Cloud to Cortex Cloud is a necessary and strategic move for Palo Alto Networks. The company has taken its fair share of criticism in the CNAPP space for a disjointed approach that slowed adoption despite its market leadership. With Cortex Cloud, Palo Alto Networks is betting on tighter integration, automation, and real-time security to regain its competitive edge.

As the CNAPP market continues to evolve, it will be exciting to see how vendors, large and small, continue to innovate. The shift toward platform-centric, deeply integrated security is gaining momentum, and we eagerly await the market’s response to Palo Alto Networks’ new CNAPP offering.

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