While data centers continue to defy the economy, revenue growth is clearly slowing down for the technology suppliers. Sequential rates have been much lower on an annualized basis than Year-over-Year growth rates, and the 2nd quarter typically gets a rebound off the 1st quarter lull. Mellanox (MLNX) reported strong sequential growth, but guided down for the next quarter, and VMWare (VMW), which is majority owned by EMC (EMC) stated that license revenue would be flat.
I'll have another post with the service providers after Rackspace (RAX) reports, but the trend looks similar there - with growth continuing, but at a slowing pace.
Y/Y Rev Growth Sequential Sequential
Rev Growth Rev Growth Inventory Growth
MLNX 58% 10% -3%
VOLT 54% 7% -14%
QLGC 16% -2% 26%
FFIV 46% 12% 8%
EMC 24% 3% -4%