Data Center Networking Market
Global Industry Analysis and Forecast 2023-2030
Market Value (2022)
USD 21.43 Billion
Forecasted Value (2030)
USD 38.33 Billion
CAGR (2023 - 2030)
Fastest Growing Region (2023 - 2030)
Hardware, Software, Services
IT & Telecom, BFSI, Retail, Healthcare, Public Sector & Utilities, Manufacturing, Energy, Others
The global Data Center Networking Market was valued at USD 21.43 billion in 2022 and is projected to reach USD 38.33 billion by 2030, growing at a CAGR of 7.53% from 2023 to 2030.
The data center networking market is growing rapidly owing to the rise in data center virtualization and the adoption of advanced data center operating models. The demand for real-time interaction with users and the optimization of on-demand services across various organizations are the most important factors driving the growth of the market. In addition, the growing adoption of cloud services in many different industries requires the addition of data center networks. The widespread adoption of virtualization technologies and data center networking solutions which enable cloud environments are current developments in the market. The growth of the data center networking market is impeded by the rise in cyberattacks and the surging demand for strong security solutions. Factors such as increasing complexity of data center design and irregularities in the privacy regulatory scenario are also restraining the market growth.
Analyst’s Review on Data Center Networking Market
The demand for more efficient, reliable, and versatile data center networks is driving continual developments fueling the expansion of the data center networking industry. The ongoing innovation meets the need for high-speed connections in data centers, enabling faster data transfer with software subscriptions that provide innovative features and capabilities to manage and optimize data center networks. These subscriptions include advanced features and updates that improve the performance and management of data center networks. These innovations aim to simplify the development and deployment of network switches in data centers, making them even more scalable and efficient. The cloud computing industry is driving network innovation, such as the design of multiple virtual networks running on the same physical network in a data center. These innovations enable the efficient assignment and allocation of resources for different applications and services in the cloud environment. The implementation of new network architectures and technologies to support growing data traffic and workloads propels market growth.
Data center networking refers to the integration and organization of network resources in a data center environment. It involves connecting different network devices such as routers, switches, firewalls, load balancers, and storage systems to create a reliable and scalable network infrastructure in the data center. Data center networking is critical because it enables efficient data flow and communication between servers, storage systems, and other data center resources. It plays a key role in supporting data-intensive applications, ensuring high availability, and enabling IT services to run smoothly. Data center switches are responsible for forwarding network packets and facilitating communication between devices in the data center. These data center network ensures high availability and minimizes the risk of interruptions or outages. Using technologies such as load balancing and traffic optimization, a data center network maximizes network performance and minimizes latency, ensuring efficient data transfer and utilization. Data center networking involves the planning, implementation, and management of data center network infrastructure.
The increasing demand of Internet users for high-speed Internet has a significant impact on the growth of data center networks. The demand for high-speed Internet is driving the expansion of data center networks and the need for efficient data transmission. The users expect faster data access, streaming services, and real-time applications that require robust and efficient data center networks to handle increased traffic. The introduction of cloud services based on data centers is driving the demand for high-speed Internet and data center. The market is constantly evolving to support the ever-increasing demand for faster and more reliable connections. Companies and network operators are focusing on meeting the requirement of high-speed Internet, which is propelling data center networking market growth.
The market growth is retrained by significant challenges related to bandwidth limitations to handle growing data traffic and meet the demand for fast & reliable connections. Data breaches can cause significant financial and reputational damage. Server center networks can become complex due to the use of multiple technologies, protocols, and architectures. Managing and troubleshooting such complex networks can be difficult and requires skilled network administrators. These challenges underscore the importance of a robust and well-designed data center network infrastructure. Organizations need to invest in advanced networking technologies such as high-speed switches, network management software, and security solutions to overcome these challenges and ensure optimal performance and security in their data centers.
The global data center networking market is segmented based on component, end-user, and geography.
Based on component, the data center networking market is segmented into hardware, software, and services. The service segment is dominating the industry owing to the proliferation of data center networking solutions due to their energy efficiency. This energy efficiency thus delivering centralized control, flexibility, and scalability, and enhancing the capacity of the systems.
Based on end-user, the data center networking market is segmented into IT & telecom, BFSI, retail, healthcare, public sector & utilities, manufacturing, energy, and others. The IT and telecommunications segment accounted for the largest market share in 2022. The growth of the segment is driven by factors such as the increase in the number of telecom subscribers and penetration of smartphones, which generate more information and thus proliferate the demand for data center network solutions. The use of storage devices is likely to accelerate on the market growth owing to the mass adoption of virtualization, cloud computing technology, and efficient storage systems which further encourage the demand for data center networks.
Based on regional analysis, the global data center networking market is classified into North America, Europe, Asia Pacific, MEA, and Latin America.
North America is the dominating region owing to the proliferation of software-defined networks and 5G technology has increased the demand for data center networking. The adoption of cloud computing technology, virtualization, and storage system services are expected to influence the product demand in the region. The United States is experiencing significant growth in the North American region. This growth can be attributed to the rising demand for secure and reliable data centers, which in turn leads to an increased need for new data center network solutions in the region.
Data center networking is in high demand in North America as reliance on digital services, cloud services, and data-intensive applications grows. The growing significance of data security, North American data centers follow strict regulations and implement strong security measures to protect sensitive data. The rising emphasis on connectivity, security, and infrastructure make it a key region for companies focusing on establishing their data center operations which fosters market growth.
The global data center networking market study report will provide valuable insight with an emphasis on the fragmented nature of the industry. Prominent players are focusing on several key business strategies such as partnerships, mergers and acquisitions, product innovations, and joint ventures to expand their product portfolio and increase their respective market shares across different regions. The major players in the data center networking market are:
- Cisco Systems, Inc.
- Dell Inc.
- Edgecore Networks Corporation
- Google LLC
- Hewlett Packard Enterprise Development LP
- Honeywell International Inc.
- Huawei Technologies Co. Ltd.
- Juniper Networks, Inc.
- Microsoft Corporation
- March 2023 (Launch): Edgecore unveiled a 400G switch with extremely high capacity for the next generation of data center network architectures. The launch of the DCS520, a 400GB switch with incredibly high capacity that fulfills the demands of cloud computing environments and next-generation data centers while continuing to improve core network architecture.
- September 2022 (Launch): Honeywell introduced its Data Center Suite, a collection of performance-based software solutions that aid data center managers and owners in maximizing availability, worker productivity, the health of vital assets, and operational expenses by ensuring that sustainability KPIs are more visible.
The global Data Center Networking Market is segmented as:
- IT & Telecom
- Public Sector & Utilities
- Manufacturing, Energy
- North America
- Rest of Europe
- Asia Pacific
- South Korea
- Rest of Asia Pacific
- Middle East & Africa
- North Africa
- South Africa
- Rest of Middle East & Africa
- Latin America
- Rest of Latin America