Data Center Networks Market Size
|Study Period:||2018 - 2028|
|Fastest Growing Market:||Asia Pacific|
|Largest Market:||North America|
*Disclaimer: Major Players sorted in no particular order
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Data Center Networks Market Analysis
The data center networks market expected to register a CAGR of 10% by the forecast period.
- Edge computing has become a crucial component in data centers and cloud services, bringing computing resources, data, and processing closer to the edge. It is a decentralized extension of campus networks, cellular networks, cloud, or data center networks. As the amount of data generated continues to increase, there is a rising need for backup and storage solutions. More storage arrays now have in-cloud equivalents that can be easily replicated and failover if needed. For instance, some examples include Hewlett Packard Enterprise Cloud Volumes (Nimble), IBM Spectrum Virtualize, and Oracle Cloud storage, which uses Oracle ZFS Storage Appliance.
- Industries such as banking, financial services, insurance (BFSI), government, retail, and telecommunications are driving the demand for advanced network infrastructure solutions due to the growing need for data security and low-latency services. However, the market demand is hindered by the need for more skilled data center professionals. The historically low profile of data centers as a career choice, combined with increasing management and operational complexity, along with local shortages of suitably qualified staff, negatively impacts the market.
- Energy efficiency considerations are also gaining importance in data centers, as energy accounts for almost 40% of total costs (according to network strategy and technology company Ciena). As part of the data center transformation, infrastructure management is expected to gain traction in the years ahead, given the effort to increase energy efficiency as a cost-saving measure.
- The COVID-19 pandemic impacted data center construction in the market, causing the delay of several new facilities' construction. Building from businesses and colocation service providers stopped, and project pipelines with opportunities between Q4 2020 and Q1 2021 were significantly affected. Data center infrastructure-related supply chain problems have been blamed for the same. The situation has worsened due to problematic imports already in place, as many vendors rely on imports of IT, electricity, and cooling infrastructure solutions.
Data Center Networks Industry Segmentation
A data center network (DCN) essentially connects and establishes the entire physical and network-based devices and equipment within a data center facility. In the current web-connected world, business workloads are executed on single computers, hence leading to the need for data center networking. Networks provide servers, clients, applications, and middleware with a standard plan to stage the execution of workloads and also to manage access to the data produced.
The data center networks market can be segmented by product (ethernet switches, storage area network, routers, other products), end-user vertical (BFSI, healthcare, retail, government, other end-user verticals), and geography (North America, Europe, Asia-Pacific Latin America, Middle East & Africa).
The market sizes and forecasts are provided in terms of value (USD million) for all the above segments.
|Storage Area Network|
|Other End-user Verticals|
|Middle East & Africa|
Data Center Networks Market Trends
Retail Industry to Dominate the Market
- Data center networking is a crucial aspect of modern technology that facilitates the seamless transfer of data between data center equipment and infrastructure over external networks. It is designed to establish a stable, secure, and reliable network supporting contemporary technologies such as virtualization and cloud computing.
- Personalizing the shopping experience for customers has become essential for retailers to remain competitive in today's market. To achieve this, retailers record customers' transaction history to provide personalized recommendations. As the number of shoppers increases, the need for efficient data centers has become mandatory.
- Data center networking eliminates the need for retailers to store transaction and customer data in a centralized location, increasing data security. This aspect of data center networking is especially critical as it provides a secure environment for sensitive customer information.
- The retail industry in India is expected to generate revenue worth USD 60 billion by 2023, according to IBEF, due to increased participation from foreign and private players. As demand for retail sales grows, more data will be generated, requiring efficient data centers to manage the influx of information.
- In summary, data center networking is crucial for modern technology and enables retailers to personalize their customers' shopping experiences while ensuring the security of sensitive data. With the increasing demand for retail sales in emerging economies such as India, efficient data centers will become even more critical to managing the growing data.
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Asia-Pacific to Witness the Highest Growth
- The Asia-Pacific region is experiencing a significant surge in data generated from digital products and services, largely due to population growth and e-commerce. As a result of this growth, demand for data center capacity is expanding beyond conventional Tier 1 data center markets. Emerging countries such as mainland China, India, and Indonesia are experiencing increasing demand. Other major Southeast Asian markets, such as Vietnam and Thailand, are emerging as high-potential markets with burgeoning local needs.
- India, in particular, has seen significant growth due to the government's Digital India initiative, which is driving the country's data center industry by classifying data centers as infrastructure assets and proposing new data localization laws. This growth is evident in both cloud and colocation data center sectors. The deployment of data centers has also increased across the region to cater to the growing data volumes.
- The extensive telecom network and rising usage of digital services across the region are expected to support further market growth. The increased usage of cloud-based services, the Internet of Things (IoT), and big data analytics have also contributed to the recent boom in data center construction.
- The Asia-Pacific region is expected to continue experiencing growth in its data center industry as digital transformation drives demand for data center capacity. With the rise of new technologies and the need for efficient data management, the region's data center industry is poised for continued expansion in the coming years.
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Data Center Networks Industry Overview
The data center industry is experiencing a shift towards fragmentation, with existing vendors and new entrants facing intense competition. The growth of cloud computing has attracted new investors keen on capitalizing on the sector's success. Key players in the market include Cisco Systems Inc, Juniper Networks Inc, Arista Networks Inc, H3C Holding Limited, and VMware Inc.
In the realm of data center networking, innovation is driven by the increasing volume of network traffic. Hyperscale data center operator Facebook is at the forefront of this trend, introducing new architecture through the Open Compute Project (OCP) annually. Facebook has launched the Wedge 400 and Wedge 400G Top of the Rack switches, powered by Broadcom and Cisco ASICs.
In January 2022, Microsoft Corporation announced plans to construct its most advanced data centers in Sweden. These facilities, located in Gävle and Sandviken, are slated to be some of the most sustainable data centers globally. Microsoft is building these data centers to meet the future demands of cloud services.
Data Center Networks Market Leaders
Cisco Systems Inc.
Juniper Networks Inc.
Arista Networks Inc.
H3C Holding Limited
*Disclaimer: Major Players sorted in no particular order
Data Center Networks Market News
- October 2022: Kyndryl announced a new integrated hybrid cloud solution in collaboration with Dell Technologies and Microsoft Corporation. This solution offers clients operating in the data center, remote, and mainframe environments a valuable tool to expedite their cloud transformation initiatives. Clients can significantly enhance their cloud transformation efforts by taking advantage of Dell infrastructure, Kyndryl's managed services, and the capabilities of Microsoft Azure.
- January 2022: IBM launched the IBM Z and Cloud Modernization Center, a digital portal designed to accelerate the adoption of hybrid clouds among IBM Z customers. The center provides a comprehensive suite of resources, including tools, training, ecosystem partners, and other valuable resources to facilitate digitalizing customer applications, processes, and data within a hybrid cloud environment. With the IBM Z and Cloud Modernization Center, IBM customers can accelerate their journey towards a more agile, efficient, and cost-effective cloud infrastructure.
Data Center Networks Market Report - Table of Contents
1.1 Study Deliverables
1.2 Study Assumptions
1.3 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET OVERVIEW
5. MARKET DYNAMICS
5.1 Introduction to Market Drivers and Restraints
5.2 Market Drivers
5.2.1 Increasing Utilization of Cloud Storage is Driving the Market Growth
5.2.2 Rising Need for Backup and Storage is Expanding the Market Demand
5.3 Market Restraints
5.3.1 Lack of Skilled Professionals is Hindering the Market Demand
5.4 Value Chain Analysis
5.5 Industry Attractiveness - Porter's Five Forces Analysis
5.5.1 Threat of New Entrants
5.5.2 Bargaining Power of Buyers/Consumers
5.5.3 Bargaining Power of Suppliers
5.5.4 Threat of Substitute Products
5.5.5 Intensity of Competitive Rivalry
6. MARKET SEGMENTATION
6.1 By Product
6.1.1 Ethernet Switches
6.1.2 Storage Area Network
6.1.4 Other Products
6.2 End-user Vertical
6.2.5 Other End-user Verticals
6.3.1 North America
22.214.171.124 United States
126.96.36.199 United Kingdom
188.8.131.52 Rest of Europe
184.108.40.206 Rest of Asia-Pacific
6.3.4 Latin America
6.3.5 Middle East & Africa
7. COMPETITIVE LANDSCAPE
7.1 Company Profiles
7.1.1 Cisco Systems Inc.
7.1.2 Juniper Networks Inc.
7.1.3 Arista Networks Inc.
7.1.4 H3C Holding Limited
7.1.5 VMware Inc
7.1.6 Huawei Technologies Co. Ltd.
7.1.7 Extreme Networks Inc.
7.1.8 Equinix Inc.
7.1.9 Cumulus Networks Inc.
7.1.10 Dell EMC
7.1.11 NEC Corporation
7.1.12 Big Switch Networks Inc.
7.1.13 Lenovo Group Ltd.
- *List Not Exhaustive
8. INVESTMENT ANALYSIS
9. MARKET OPPORTUNITIES AND FUTURE TRENDS
Data Center Networks Market Research FAQs
What is the study period of this market?
The Data Center Networks Market is studied from 2018 - 2028.
What is the growth rate of Data Center Networks Market?
The Data Center Networks Market is growing at a CAGR of 10% over the next 5 years.
Which region has highest growth rate in Data Center Networks Market?
Asia Pacific is growing at the highest CAGR over 2021 - 2026.
Which region has largest share in Data Center Networks Market?
North America holds highest share in 2022.
Who are the key players in Data Center Networks Market?
Cisco Systems Inc., Juniper Networks Inc., Arista Networks Inc., H3C Holding Limited, VMware Inc are the major companies operating in Data Center Networks Market.
Data Center Networks Industry Report
Statistics for the 2023 Data Center Networks market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Data Center Networks analysis includes a market forecast outlook to for 2023 to 2028 and historical overview. Get a sample of this industry analysis as a free report PDF download.