DATA CENTER NETWORKING MARKET ANALYSIS

Global Data Center Networking market is estimated to be valued at US$ 50.7 Bn by 2030.

Data center networking is the method of establishing and interconnecting all physical- and network-based equipment and devices within a data center facility. It allows a digital connection between data center infrastructure nodes and equipment to ensure that they can connect and transfer data between one another and on the Internet. Deployment of hyperscale data centers has increased in the recent past wherein data center infrastructure is provided on lease by companies. This is mainly due to recent advancements in digital technology. Typically, a data center network forms a network infrastructure that complies with industry regulations, offers security, stability, and reliability, supports networking requirements for modern technologies, and can fulfill the requirements of network communications in peak usage.

Global Data Center Networking Market: Regional Insights

North America and Asia Pacific were two leading markets in terms of revenue in 2022, and are expected to hold dominant position over the forecast period. The market growth in these regions is attributed to the growing storage, communication, delivering IT services and networking to number of network users, businesses, and devices. For instance, data center networking are majorly used in cloud-based applications, services, and infrastructure etc. in the industry, which is expected to drive demand for data center networking over the forecast period. Moreover, increasing demand for hardware and software in the data center networking is expected to facilitate growth of the Data Center Networking Market in North America.

The Asia Pacific region is expected to gain traction during the forecast period. The countries in the Asia Pacific regions are constantly investing in the software and hardware sector. New Projects are initiated to meet the requirement of countries such as India, Bangladesh, Taiwan, and others. The construction of new projects will increase the demand for data center networking in the software and hardware sector are they are used to store data, communication, delivering IT services and networking to number of network users, businesses, and devices. Hence, the Global data center networking market is expected to gain traction in the Asia Pacific region in the forecast period.

Figure 1. Global Data Center Networking Market Share (%), By Region, 2023

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Global Data Center Networking Market- Impact of Coronavirus (COVID-19) Pandemic

The COVID-19 pandemic has affected the Global Data Center Networking market significantly. The lockdown was imposed across the globe as a precautionary measure by governments. This led to temporary suspension of all businesses in the data networking sector. Because of the lockdown data center networking market witnessed increasing demand for high speed internet and cloud storage devices and services. Which influenced the high growth of data center networking, and hence the Global Data Center Networking market witnessed growth during the pandemic.

Global Data Center Networking Market- Drivers

Increase in demand for a high speed by internet users:

The growth of the Data Centre Networking Industry is anticipated to be influenced by the rising need for fast internet connections and the significant expansion of mega data centers and colocation facilities. Additionally, the widespread adoption of 100 GB switch ports and the rapid advancements in broadband and internet infrastructure are expected to have a positive effect on market growth. Furthermore, the construction of new data centers, the replacement of outdated technologies, and the decreasing costs of semiconductor components are also projected to generate substantial demand for data center networking and contribute to the overall growth of the data center networking market.

Expansion of Mega Data Centers and Colocation Facilities

The substantial growth of mega data centers and colocation facilities is driven by the need to handle the ever-growing data volume and the demand for cloud services. As these facilities expand, there is a corresponding increase in the requirement for sophisticated networking infrastructure that can facilitate the smooth and efficient transfer of data within these environments.

Global Data Center Networking Market- Opportunities

Increasing Demand for Cloud Services

The increasing embrace of cloud computing and the escalating need for cloud-based services create a noteworthy opening for data center networking. As businesses transition their infrastructure and applications to the cloud, there arises a requirement for resilient networking solutions to guarantee secure and seamless connectivity between data centers and cloud environments.

Edge Computing Growth of IoT

The rapid expansion of Internet of Things (IoT) devices and the demand for computing capabilities with minimal latency are propelling the advancement of edge computing. This trend creates a favorable situation for data center networking providers to deliver solutions that facilitate the efficient transfer and processing of data at the edge, in close proximity to where the data is generated.

Global Data Center Networking Market- Trends

Security and Privacy

Due to the increasing apprehensions regarding data security and privacy, data center networking providers have an opportunity to provide solutions that bolster network security and implement robust data protection measures. This encompasses the utilization of technologies like network segmentation, encryption, and advanced systems for detecting and preventing threats.

Green Data Centers

The growing emphasis on environmental sustainability and energy efficiency offers data center networking vendors a chance to create solutions that align with green initiatives. This entails optimizing power consumption, enhancing cooling efficiency, and implementing energy-efficient networking infrastructure, thereby supporting environmentally conscious practices.

Global Data Center Networking Market- Restraints

Uncertainty regarding data protection laws

With the evolving landscape of privacy regulations and data governance, organizations are uncertain about compliance requirements and potential legal repercussions. This uncertainty hampers decision-making processes and investment in data center networking solutions. The lack of clarity regarding data protection laws creates challenges in ensuring data security, privacy, and compliance. Organizations may hesitate to adopt new technologies or expand their data center networking infrastructure until there is greater clarity and stability in the legal framework surrounding data protection.

Increasing Complexity of Data Center Designs

As data centers evolve to accommodate higher data volumes, virtualization, and cloud-based technologies, their designs become more intricate and intricate to manage. This complexity presents challenges in deploying and maintaining networking infrastructure, as well as ensuring compatibility and scalability. Data center networking solutions must adapt to these complex designs, requiring specialized expertise and resources. The need for skilled professionals, advanced management tools, and efficient configuration and troubleshooting processes adds to the market restraint, potentially hindering the growth and adoption of data center networking solutions.

Figure 2: Global Data Center Networking Market Share (%), By Component, 2023

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Global Data Center Networking Market- Segmentation

Global Data Center Networking Market report is segmented into Component & industrial vertical.

Component Type: (Hardware, Software and Services)

By Industry Vertical: (Telecommunications, Government, Retail, Media & Entertainment, BFSI, Healthcare, Education and Others)

Global Data Center Networking Market: Key Developments

Major market players are focusing on product launches, in order to enhance their product portfolio.

In March 1, 2022 - Huawei Technologies Co. Ltd. a technology corporation introduced the Full Stack Data Center Solution. Which is built to help businesses modernize their data center infrastructure at Mobile World Congress (MWC) 2022 held at Barcelona, Spain.

Major companies in the market are focused on partnerships and collaborations, in order to enhance the market presence. For instance, in January 2020, Hewlett Packard Enterprise signed partnership with Cumulus Networking, an open networking software vendor, todeliver Open Storage Networking Platforms for the Modern Data Center

In December 2022, Taiwan's Edgecore Networks Corporation, a renowned provider of open networking solutions, introduced the EPS200 Series. This open network solution is purpose-built for enterprise data center networking architecture, offering seamless connectivity between servers, storage devices, and network switches within a rack.

In December 2022, Arista Networks, Inc. has unveiled a range of eight advanced data center switches tailored to meet the specific needs of organizations, providing support for bandwidths reaching up to 800G. The company has introduced three new switches in the 7060X5 series and an additional five switches in the 7050X4 data-center leaf switches lineup. These switches are designed and manufactured to cater to the unique requirements of individual organizations, offering enhanced performance and capabilities for data center networking.

In December 2022, Nokia and Korea Internet Neutral eXchange (KNIX) have joined forces in a partnership. In this collaboration, Nokia will supply its Re-Configurable Optical Add-Drop Multiplexer (ROADM) solution to KNIX. This implementation will enable KINX to deliver dependable services to its end users. Moreover, Nokia's 1830 Photonic Service Switch platforms will be utilized to deploy the KINX network.

Global Data Center Networking Market: Key Companies Insights

Major players operating in the global Data Center Networking market include Google, Inc., Huawei Technologies Co. Ltd., Cisco Systems, Inc., Brocade Networking Solutions, Hewlett Packard Enterprise, Extreme Networks, Inc., Arista Networks, Avaya, Inc., Juniper Networks, Dell Inc., and Microsoft Corporation.

*Definition:

Data center networking is the method of establishing and communicating all physical- and network-based equipment and devices within a data center facility. Data center networking is extremely crucial in data center as it communicates all the data center resources together.