Generative AI: Implications for Datacenter Networking Vendors and Cloud Service Providers

Generative AI: Implications for Datacenter Networking Vendors and Cloud Service Providers

This IDC Market Perspective highlights actionable insights for the datacenter networking vendors and cloud service providers on the major product and business solution pivots that the edge-to-cloud buildouts of generative AI models and applications would drive over the near term and midterm. Enterprise investments on generative AI models and applications are a secular growth driver for the datacenter switching market, whose growth trajectory has been historically levered to cyclical drivers such as technology transitions and to the ebbs and flows in network traffic growth. "Energy-efficient high-radix switches, open source networking, and the use of IaaS and multicloud network services are key for networking vendors and cloud service providers to profitably monetize the multiyear generative AI buildout cycle." — Vijay Bhagavath, research VP, Cloud and Datacenter Networks

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