Market Overview

The global data center networking market is expected to experience significant growth in the coming years, with a projected value of USD 36.59 billion by 2029. This growth is attributed to a compound annual growth rate (CAGR) of 4.9% from 2023 to 2029. The market encompasses various essential infrastructure components, including Ethernet switches, routers, controllers, software-defined networking solutions, and others.

One of the key factors driving the adoption of software-defined networking (SDN) is the increasing demand in the Asia-Pacific (APAC) and European regions. These regions are witnessing a surge in SDN implementation due to its ability to provide flexibility, scalability, and cost-effectiveness in managing network infrastructure.

The rapid growth of network traffic is a major catalyst for innovation in the data center networking market. Hyperscale operators like Facebook are leading the way in driving this innovation, as they continuously strive to meet the ever-increasing demands of their users. Additionally, cloud and content providers are expanding their network investments to include edge data centers, enabling them to deliver services closer to end-users and reduce latency.

Developing countries are also making a significant shift towards colocation centers, which offer shared data center facilities and services. This shift is driving the demand for 25/100GbE switches, as these higher-speed switches are necessary to accommodate the growing data traffic in these regions.

Furthermore, the increasing adoption of cloud computing is fueling the demand for robust network infrastructure. As more businesses and organizations migrate their operations to the cloud, the need for reliable and efficient data center networking solutions becomes paramount.

To optimize space utilization and reduce costs, data centers are increasingly adopting converged and hyper-converged infrastructure. These solutions integrate compute, storage, and networking resources into a single, unified system, streamlining operations and enhancing overall efficiency.

Market Segmentation

The market is segmented based on various factors, including industry, product, and geography.

Segmentation by Industry
BFSI
Cloud
Government
IT & Telecom
Others

Segmentation by Product
Ethernet Switches
Routers
Storage Networking
Others

Segmentation by Geography
North America – US, Canada
APAC – China & Hong Kong, Australia & New Zealand, Japan, India, Rest of APAC
Western Europe – UK, Germany, France, Netherlands, Ireland, Other Western Europe
Central & Eastern Europe – Russia, Other Central & Eastern Europe Countries
Latin America – Brazil, Other Latin American Countries
Nordics – Sweden, Other Nordics Countries
Africa – South Africa, Other African Countries
Middle East – UAE, Saudi Arabia, Other Middle Eastern Countries
Southeast Asia – Singapore, Other Southeast Asia countries

In 2029, the cloud segment is expected to hold a dominant position in the industry with a 62.6% share, indicating increasing reliance on cloud services. The APAC region is projected to witness substantial growth, with a 51% absolute growth rate from 2023 to 2029, driven by factors like digital transformation and internet connectivity.

Spending on data center Ethernet switches is anticipated to exceed $69 billion from 2023 to 2029, highlighting their crucial role in efficient data transmission. Cloud, social media, and content service providers worldwide are estimated to spend over $111 billion on data center network infrastructure products from 2023 to 2029, reflecting the demand for robust solutions to support digital services.

Various industries, like BFSI, government, and telecom, have a growing need for advanced network infrastructure to meet data security and low latency service requirements, driving demand for cutting-edge solutions.

While network infrastructure deployment in on-premise data centers is prevalent globally, sectors like government and BFSI contribute significantly to market growth. The growth of 25GbE and 100GbE network ports was notable in 2022. Vendors are exploring 200/400GbE and 800GbE switches to optimize network architecture.

Key investment destinations for network infrastructure include the US, China, UK, Japan, and Germany. Other emerging countries are also investing. SDN adoption is gaining momentum worldwide, with organizations embracing it for enhanced network flexibility and management.

Competitive Landscape

The growing demand for advanced data center network infrastructure solutions is driven by facilities that require efficient handling of AI, IoT, and big data workloads. To meet these demands, vendors are continuously innovating their networking portfolio to provide solutions that offer improved efficiency, scalability, and reliability. They are also developing switches with a capacity of 400 GbE, which will be deployed in various locations in the future. Additionally, plans are underway to introduce 800 GbE switches to further enhance network capabilities. Key companies featured in this report include ALE International SAS, Arista Networks, Inc., Broadcom Inc., Cisco Systems, Inc., Dell Technologies Inc., Digisol Systems Ltd, D-Link Systems, Inc., Eaton Corporation plc, Enterprise Engineering Solutions, Inc. (EES), Extreme Networks, Inc., Fujitsu Limited, Huawei Technologies Co., Ltd., Intel Corporation, Inventec Corporation, Juniper Networks, Inc., Lenovo Group Limited, Marvell Technology, Inc., MiTAC Holdings Corporation, Oracle Corporation, Quanta Computer, Inc., Ruijie Networks Co., Ltd., Super Micro Computer, Inc., dba Supermicro, The Hewlett Packard Enterprise Company (HPE), ZTE Corporation, among others.

Scope of the Report

To analyze and forecast the market size of the global data center networking market.
To classify and forecast the global data center networking market based on industry, product, geography.
To identify drivers and challenges for the global data center networking market.
To examine competitive developments such as mergers & acquisitions, agreements, collaborations and partnerships, etc., in the global data center networking market.
To identify and analyze the profile of leading players operating in the global data center networking market.

Why Choose This Report

Gain a reliable outlook of the global data center networking market forecasts from 2023 to 2029 across scenarios.
Identify growth segments for investment.
Stay ahead of competitors through company profiles and market data.
The market estimate for ease of analysis across scenarios in Excel format.
Strategy consulting and research support for three months.
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