USD 26.8 billion
Data Center Networking Market Size, Share, Growth Analysis, By Component (Hardware, Services), By Deployment (Cloud, On Premise), By End Use (BFSI, Healthcare), By Network Architecture, By Network Management, By Region - Industry Forecast 2024-2031
Report ID:
SQMIG45B2169 |
Region:
Global |
Published Date: December, 2024
Pages:
196
|Tables:
0
|Figures:
0
Data Center Networking Market Insights
Global Data Center networking Market size was valued at USD 26.8 billion in 2022 and is poised to grow from USD 31.2 billion in 2023 to USD 89.6 billion by 2031, growing at a CAGR of 14.1% during the forecast period (2024-2031).
The data center networking market is growing due to virtualization and widely deployed advanced operating models in data centers. Improving "on-demand" service offerings in various industries and real-time participation of customers also enhances growth in this data center networking market. Furthermore, the adoption of cloud computing services in various sectors requires increasing data center networks. Business, consumer, and government demands for innovative technological solutions to high-speed internet needs are the most prominent drivers of expansion in data center networks. Data centers represent a necessary part of digital infrastructure. Data centers are often located at a few strategic locations known as Internet exchange points (IxPs). Major internet service providers, content delivery networks, and other enterprises connect here. User expectations have gone up with the increasing adoption of technologies such as linked devices and smartphone-driven applications for faster data retrieval, streaming alternatives, and real-time applications. More traffic is thus envisaged. Therefore, more robust and efficient data center networks are warranted to manage increased traffic. As dependence among organizations, services, supply chains, operations, and government agencies on fast internet increases, so does the demand for data center services. There is also an increased demand for data center network services due to the growing reliance on the management of data analytics, collecting, and data-driven strategic choices.
Market snapshot - 2024-2031
Global Market Size
Largest Segment
hardware
Fastest Growth
services
Growth Rate
14.1%
Global Data Center Networking Market By Geography ($ Bn)
Country Share for North America Region (%)
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Data Center Networking Market Segmental Analysis
Global Data Center Networking Market is segmented by Component, Deployment, End Use and Region. Based on Component, the market is segmented into Hardware, Services. Based on Deployment, the market is segmented into Cloud, On Premises. Based on End Use, the market is segmented into BFSI, IT and Telecom, Healthcare, Retail, Education, Government, Manufacturing. Based on Network Architecture, the market is segmented into Three-Tier Architecture, Leaf-Spine Architecture, Clos Architecture. Based on Network Management, the market is segmented into Network Monitoring, Network Automation, Network Orchestration. Based on Region, the market is segmented into North America, Europe, Asia Pacific, Latin America and Middle East & and Africa.
Analysis by Component
The hardware segment shares about 53.3% revenue share of the global data center networking market and has led in 2023. Major hardware components that the data center networking industry majorly constitute include Ethernet switches, routers, Storage Area Networks (SANs), network security equipment, Application Delivery Controllers (ADCs), and many others. Hardware refers to more scalability, productivity, and big storage capacity than software, so this makes their hardware component essential in data centers. Under tracking, troubleshooting, monitoring, and diagnosing, hardware also manages physical servers, storage devices, and network devices.
However, the services segment is anticipated to be the leader in terms of the highest growth during the projection period. Growth factors for this segment include rising adoption of cloud computing technology and increasing demand for and application of such modern technologies as machine learning and AI. Growing market penetration of Internet of Things technology, at the same time, is being driven by a significant growth in the adoption of machine learning and AI technologies. Operational costs of data storage and protection include consumption of power, cooling systems, routine maintenance and many more. Thus, companies would rather outsource the data center networking services rather than invest in storage development and continue allocating more of the budget towards administration and security. The expected increase in this will be the demand for the service industry in the following years.
Analysis by End User
The IT & Telecom segment was leading the data center networking market in 2023. Growth in the business comes about due to the exponential rise of data and the need for reliable and fast connectivity. Virtualization and cloud services are becoming more important to businesses and, therefore, so are modern networking solutions capable of efficiently managing and optimizing data over large networks. Moreover, the continued pace toward 5G and IoT is further augmenting the growth in the demand for robust data center networking as these networks will cater to gigantic volumes of data and low-latency applications.
On the contrary, the manufacturing segment is expected to achieve 17.7% growth between 2024 and 2031. Predictive maintenance requires review of the data immediately, which is something the data centers can easily provide. IoT-enabled sensors collect a vast amount of information about manufacturing equipment. Based on that, it is possible to detect early signs of problems. It is believed that the use of IoT, ML, and AI by manufacturing industries will bring efficiency, improve standards for products, and encourage innovations constantly. It needs vast processing capability in addition to fast and latency-free networks. Manufacturing industries deal with private and sensitive information, which is encouraged by adopting data centers with advanced security measures to prevent illegal access, security breach, and ensure data security and contributes to the growth of the industry.
Global Data Center Networking Market By Component
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Data Center Networking Market Regional Insights
North America accounted for 39.2% of global revenue share in the data center networking market. The growing utilization of cloud computing technology, the emergence of AI applications in various fields, the need for high-performance networking infrastructure, growing adoption of edge computing, and fast-paced development of networks driven by 5G technology are the primary growth drivers for this market. Almost 300 million Americans will live in areas where all the tier-1 service providers will offer 5G low-band services. By the end of the next decade, over 5.6 billion subscriptions for 5G is predicted to appear globally.
In 2023, Europe also became a profitable international data center networking region. From there on, huge growth will take place throughout the UK, Germany, and France. Increasing number of people using the internet, to have the need for sophisticated data storage, data protection and data center networking services, entry of multiple businesses from other parts of Europe, dependability of the Internet, and these technologies such as smartphones, AI, connected devices, and the likes keep advancing on.
Global Data Center Networking Market By Geography
- Largest
- Fastest
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Data Center Networking Market Dynamics
Drivers
Rising Data Volumes
- The organizations' rapidly rising data created due to cloud computing, IoT, and digital transformation are going to be one of the critical driving factors for the data center networking market. With such massive volumes of data, these enterprises will seek and demand much more sophisticated networking solutions to withstand larger bandwidth and faster data transfer rates. This makes the companies expend money on high-class infrastructure so as to ensure efficient data handling and communication.
Adoption of Cloud Services
- The data center networking market grows because of widely adopted cloud services. More businesses are moving towards such an environment for reasons enhanced scalability, flexibility, and effectiveness on the cost factor. Such change will therefore require robust networking solutions that would enable smooth communication between on-premises systems and cloud platforms. Advanced data center networking solutions will continue gaining more popularity so long as organizations continue to enjoy the benefits from cloud computing.
Restraints
High Implementation Costs
- The investment can be massive upfront, and the operating expenditures are continuous. Allocating the budget for such investments can be very challenging for smaller companies, especially, and this may hinder their ability to compete successfully. Some firms may be deterred from upgrading their infrastructure due to the high price of the equipment, software, and trained staff needed in managing these networks, which may limit the prospects of expansion in the market.
Integration Complexity
- New networking technologies are difficult to integrate into existing data center systems. Compatibility, configuration, and maintaining old systems with contemporary technology is something that most organizations face. Due to the complexity, organizations may react shyly toward adopting new networking solutions during the transition phase due to more downtime and operational interruptions. The challenge of ensuring a smooth integration process hinders the complete expansion process of data center networking within the market.
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Data Center Networking Market Competitive Landscape
Major market participants' principal focus areas are constructing a robust client base and expanding their revenue share. Most of these players focus on the expansion of the existing product line to offer better deals by introducing new solutions and participation in mergers and acquisitions to upgrade their offers.
Top Player’s Company Profile
- ALE International (France)
- Cisco Systems, Inc. (United States)
- Dell Inc. (United States)
- Equinix, Inc. (United States)
- Fujitsu (Japan)
- Hewlett Packard Enterprise Development LP (United States)
- Hitachi Vantara LLC (United States)
- Intel Corporation (United States)
- Juniper Networks, Inc. (United States)
- Broadcom (United States)
- Microsoft Corporation (United States)
- IBM Corporation (United States)
- Google Cloud (United States)
- Oracle Corporation (United States)
- NVIDIA Corporation (United States)
Recent Developments
- In partnership with NVIDIA, the company has just released Cisco Nexus HyperFabric. The AI cluster solution for the data center was also revealed in June 2024. From its objective, Cisco mainly aims to provide clients with simpler solutions regarding data center infrastructure so that they can now focus on AI-driven innovations and new sources of revenue rather than managing IT.
- One of the world's leading companies engaged in computer innovation was the NVIDIA Corporation. During March 2024, it released its newly designed series of networking switches and marked them as X800. Product Description The product is designed and developed for massively parallel AI operations.
- In August 2023, Google Cloud unveiled the cross-cloud network, a newly developed open and customizable global cloud networking technology, designed to help businesses work on any number of different clouds. For this, Google along with its partners brought forward the cross-cloud network service, new but simultaneously very old.
Data Center Networking Key Market Trends
- Increased Adoption of Software-Defined Networking (SDN): More demand towards software-defined networking, or SDN, is pushing the data center networking market toward a significant shift. This approach allows for central management of network resources for automated management and dynamic provisioning. Businesses that look forward to embracing cloud services and hybrid IT systems will find this trend extremely attractive as it enhances scalability, optimizes the flow of traffic, and reduces operation costs.
- Rise of 400G Ethernet Technology: Acceptance is growing fast in data center networking with 400G Ethernet technology as data requirements continue to soar. The high-speed networking solution supports increased bandwidth for data-intensive applications, including big data analytics and AI workloads. 400G enables enterprises to future-proof their infrastructure, boost performance, and increase overall efficiency. It also enables smooth data transfers and meets the needs of contemporary services and applications.
Data Center Networking Market SkyQuest Analysis
SkyQuest’s ABIRAW (Advanced Business Intelligence, Research & Analysis Wing) is our Business Information Services team that Collects, Collates, Correlates, and Analyses the Data collected by means of Primary Exploratory Research backed by robust Secondary Desk research.
As per SkyQuest analysis, due to technological advancement and the increasing demand for more efficiency and bandwidth, the market for data center networking is changing. Organizations are reaching increased flexibility and automation through the transition into SDN, hence reacting quite promptly to shifting business requirements. Adoption of 400G Ethernet technology manages to handle the increasing data traffic as well as support new applications such as big data analytics and artificial intelligence. Businesses can take advantage of growing operational capabilities, reducing costs, and remain competitive in an increasingly rapidly changing world by the adoption of AI and ML technologies. Data center networking, it seems, is poised for a bright, interesting future.
| Report Metric | Details |
|---|---|
| Market size value in 2022 | USD 26.8 billion |
| Market size value in 2031 | USD 89.6 billion |
| Growth Rate | 14.1% |
| Base year | 2023 |
| Forecast period | 2024-2031 |
| Forecast Unit (Value) | USD Billion |
| Segments covered |
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| Regions covered | North America (US, Canada), Europe (Germany, France, United Kingdom, Italy, Spain, Rest of Europe), Asia Pacific (China, India, Japan, Rest of Asia-Pacific), Latin America (Brazil, Rest of Latin America), Middle East & Africa (South Africa, GCC Countries, Rest of MEA) |
| Companies covered |
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| Customization scope | Free report customization with purchase. Customization includes:-
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Table Of Content
Executive Summary
Market overview
- Exhibit: Executive Summary – Chart on Market Overview
- Exhibit: Executive Summary – Data Table on Market Overview
- Exhibit: Executive Summary – Chart on Data Center Networking Market Characteristics
- Exhibit: Executive Summary – Chart on Market by Geography
- Exhibit: Executive Summary – Chart on Market Segmentation
- Exhibit: Executive Summary – Chart on Incremental Growth
- Exhibit: Executive Summary – Data Table on Incremental Growth
- Exhibit: Executive Summary – Chart on Vendor Market Positioning
Parent Market Analysis
Market overview
Market size
- Market Dynamics
- Exhibit: Impact analysis of DROC, 2021
- Drivers
- Opportunities
- Restraints
- Challenges
- Exhibit: Impact analysis of DROC, 2021
- SWOT Analysis
KEY MARKET INSIGHTS
- Technology Analysis
- (Exhibit: Data Table: Name of technology and details)
- Pricing Analysis
- (Exhibit: Data Table: Name of technology and pricing details)
- Supply Chain Analysis
- (Exhibit: Detailed Supply Chain Presentation)
- Value Chain Analysis
- (Exhibit: Detailed Value Chain Presentation)
- Ecosystem Of the Market
- Exhibit: Parent Market Ecosystem Market Analysis
- Exhibit: Market Characteristics of Parent Market
- IP Analysis
- (Exhibit: Data Table: Name of product/technology, patents filed, inventor/company name, acquiring firm)
- Trade Analysis
- (Exhibit: Data Table: Import and Export data details)
- Startup Analysis
- (Exhibit: Data Table: Emerging startups details)
- Raw Material Analysis
- (Exhibit: Data Table: Mapping of key raw materials)
- Innovation Matrix
- (Exhibit: Positioning Matrix: Mapping of new and existing technologies)
- Pipeline product Analysis
- (Exhibit: Data Table: Name of companies and pipeline products, regional mapping)
- Macroeconomic Indicators
COVID IMPACT
- Introduction
- Impact On Economy—scenario Assessment
- Exhibit: Data on GDP - Year-over-year growth 2016-2022 (%)
- Revised Market Size
- Exhibit: Data Table on Data Center Networking Market size and forecast 2021-2027 ($ million)
- Impact Of COVID On Key Segments
- Exhibit: Data Table on Segment Market size and forecast 2021-2027 ($ million)
- COVID Strategies By Company
- Exhibit: Analysis on key strategies adopted by companies
MARKET DYNAMICS & OUTLOOK
- Market Dynamics
- Exhibit: Impact analysis of DROC, 2021
- Drivers
- Opportunities
- Restraints
- Challenges
- Exhibit: Impact analysis of DROC, 2021
- Regulatory Landscape
- Exhibit: Data Table on regulation from different region
- SWOT Analysis
- Porters Analysis
- Competitive rivalry
- Exhibit: Competitive rivalry Impact of key factors, 2021
- Threat of substitute products
- Exhibit: Threat of Substitute Products Impact of key factors, 2021
- Bargaining power of buyers
- Exhibit: buyers bargaining power Impact of key factors, 2021
- Threat of new entrants
- Exhibit: Threat of new entrants Impact of key factors, 2021
- Bargaining power of suppliers
- Exhibit: Threat of suppliers bargaining power Impact of key factors, 2021
- Competitive rivalry
- Skyquest special insights on future disruptions
- Political Impact
- Economic impact
- Social Impact
- Technical Impact
- Environmental Impact
- Legal Impact
Market Size by Region
- Chart on Market share by geography 2021-2027 (%)
- Data Table on Market share by geography 2021-2027(%)
- North America
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- USA
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Canada
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Europe
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- Germany
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Spain
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- France
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- UK
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of Europe
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Asia Pacific
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- China
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- India
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Japan
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- South Korea
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of Asia Pacific
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Latin America
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- Brazil
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of South America
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Middle East & Africa (MEA)
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- GCC Countries
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- South Africa
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of MEA
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
KEY COMPANY PROFILES
- Competitive Landscape
- Total number of companies covered
- Exhibit: companies covered in the report, 2021
- Top companies market positioning
- Exhibit: company positioning matrix, 2021
- Top companies market Share
- Exhibit: Pie chart analysis on company market share, 2021(%)
- Total number of companies covered
Methodology
For the Data Center Networking Market, our research methodology involved a mixture of primary and secondary data sources. Key steps involved in the research process are listed below:
1. Information Procurement: This stage involved the procurement of Market data or related information via primary and secondary sources. The various secondary sources used included various company websites, annual reports, trade databases, and paid databases such as Hoover's, Bloomberg Business, Factiva, and Avention. Our team did 45 primary interactions Globally which included several stakeholders such as manufacturers, customers, key opinion leaders, etc. Overall, information procurement was one of the most extensive stages in our research process.
2. Information Analysis: This step involved triangulation of data through bottom-up and top-down approaches to estimate and validate the total size and future estimate of the Data Center Networking Market.
3. Report Formulation: The final step entailed the placement of data points in appropriate Market spaces in an attempt to deduce viable conclusions.
4. Validation & Publishing: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helped us finalize data points to be used for final calculations. The final Market estimates and forecasts were then aligned and sent to our panel of industry experts for validation of data. Once the validation was done the report was sent to our Quality Assurance team to ensure adherence to style guides, consistency & design.
Analyst Support
Customization Options
With the given market data, our dedicated team of analysts can offer you the following customization options are available for the Data Center Networking Market:
Product Analysis: Product matrix, which offers a detailed comparison of the product portfolio of companies.
Regional Analysis: Further analysis of the Data Center Networking Market for additional countries.
Competitive Analysis: Detailed analysis and profiling of additional Market players & comparative analysis of competitive products.
Go to Market Strategy: Find the high-growth channels to invest your marketing efforts and increase your customer base.
Innovation Mapping: Identify racial solutions and innovation, connected to deep ecosystems of innovators, start-ups, academics, and strategic partners.
Category Intelligence: Customized intelligence that is relevant to their supply Markets will enable them to make smarter sourcing decisions and improve their category management.
Public Company Transcript Analysis: To improve the investment performance by generating new alpha and making better-informed decisions.
Social Media Listening: To analyze the conversations and trends happening not just around your brand, but around your industry as a whole, and use those insights to make better Marketing decisions.
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