“We are in the midst of extensive digital transformation, accelerated by the global pandemic, where the limits of power and cooling infrastructure are being tested,” said Lucas Beran, Principal Analyst with Dell’Oro Group.

“The Cloud service providers’ digestion cycle has persisted longer than predicted due to the continued market uncertainty,” said Baron Fung, Research Director at Dell’Oro Group. “We anticipate another Cloud expansion cycle to commence starting in the second half of this year.

“It is encouraging to see the robust sales performance being broad-based across all major regions, and customer segments: Cloud Service Providers (SPs), Telco SPs, and Large Enterprises,” said Sameh Boujelbene, Senior Research Director at Dell’Oro Group.

“Amazon and Microsoft increased their server deployments compared to the prior quarter, which in turn lifted the Smart NIC market,” said Baron Fung, Research Director at Dell’Oro Group. “These two Cloud service providers, which commands more than 80 percent of the Smart NIC market by revenue, have scaled their internally developed Smart NICs with their Cloud server deployments.