Market Challenges And Opportunities

Global Data Center Switch Market Drivers:

Rise in demand for cloud and edge computing services to boost the market growth

Due to the Covid-19 pandemic, several schools, enterprises, and offices were shutdown, which increased demand for cloud solutions and services all over the world. Many public and private sectors adopted work from home culture, which in turn created significant demand for SaaS-based collaboration solutions for employees to use for communicating with one another. Thus, due to these factors demand for cloud-based solutions increased, which further boosted the adoption of data center switches. Hence, the global data center switch market is expected to witness strong growth over the forecast period.

Increasing government regulations about localization of data centers to augment the market growth

Data localization involves restricting the data flow from one country to another. Many governments around the world are now implementing localization laws that make it compulsory for organizations, who collect critic consumer data, to store and process it in data centers that are within the boundary of the country. Such laws support developments of local data centers inside the country, and this in turn is leading to growing investment in data centers. Thus, the demand for data center switches is increasing all over the world due to government regulations, which is anticipated to fuel growth of the market.

Global Data Center Switch Market Opportunities:

Growing adoption artificial intelligence (AI) in data center is expected to offer growth opportunities in the global data center switch market over the forecast period. Ai can be used in mechanical and electrical equipment of data centers including data center switches. This for enabling actionable insights and automation, and to save money for operators. It requires integration of traditional physics-based modeling approaches with state-of-the-art machine learning (ML) techniques that use data from the IoT sensors. Several companies are launching Ai-driven data center switches to enhance network operations. This in turn is creating many lucrative opportunities in the market.

Furthermore, advent of 5G is anticipated to create lucrative environment for growth opportunities in the global data center switch market over the forecast period. With the emergence of 5G, novel applications such as industrial IoT process control, high-resolution cloud gaming, and onsite augmented reality guidance for workers using 5G super high speed, and machine-machine communication are also increasing. Due to such applications, the 5G rollout is likely to impact several industries including virtualized networking and data center infrastructure. This is in turn is expected to create demand for data center switch, which is likely to create opportunities in the global data center switch market.

Global Data Center Switch Market Restraints:

High cost of operation of data centers to hamper the market growth

The operational cost of data centers is increasing due to rise in cost of energy all over the world. Power is the major factor that increases cost of data centers. According to the International Energy Agency, data centers use 1% of global electricity and they are likely to consume 1/5^th of the global energy supply by 2025. Powering the servers contributes majorly to the high consumption of energy, which further creates heat and requires to be cooled. Again cooling these servers also consumes large amount of energy. And thus, due to high consumption of energy, the operational cost of data centers increases, which in turn adversely impacts growth of the global data center switch market.

Availability of self-reliant enhanced servers to impede growth of the market

Virtualization in data centers is becoming popular among companies. It helps in eliminating hardware problems inside a data center and allows virtual machines to be moved easily. Virtualization enables consolidation of data for saving spaces, provisioning of resources and planning capacity, reducing time to provide new servers, optimum use of resources, and improvement in manageability. However, virtual switches are increasingly being used for handling connection between different servers. And this is expected to impede demand for switches over improved servers which deliver upstream core connectivity with optical cross-connects. Thus, this factor is expected to restrain growth of the global data center switch market over the forecast period.