Market Trends of Saudi Arabia Data Center Networking Industry
Ethernet Switches is Anticipated to be the Largest Segment
- An Ethernet switch is a type of networking hardware that is the foundation of networks and the Internet. Ethernet switches join wired devices such as computers, Wi-Fi access points, PoE lighting and IoT devices, and servers onto an Ethernet LAN so that they can communicate with each other and the Internet.
- Ethernet switches have wide applications in industrial infrastructure such as smart grid, security and surveillance, intelligent rail and transportation, and other utilities driving the industrial Ethernet switch market. In smart grids, Ethernet switches play a key role in substation automation. This is because Ethernet switches reduce the effort and complexity of cabling between many power transmission and distribution substation devices by integrating them into Ethernet-based networks.
- Further, there has been an increase in mobile data traffic since 2022, made possible by the expansion of 5G coverage. 5G services in Saudi Arabia expanded in Q4 2020, reaching seven additional cities and provinces. By 2021, 51 of Saudi Arabia's different provinces and cities had 5G connections. About 23% of the overall volume is made up of 5G hardware, including handsets. To handle the rising data traffic, newer models such as Gigabit Ethernet switches offer incredibly high data transfer rates (1 Gbps) that can significantly exceed wireless bandwidth.
- Further, smart Ethernet switches with Power-over-Ethernet (PoE) technology are used for security and monitoring. PoE networks transfer power to local network cables and then to connected devices. This is useful for Internet protocol-based monitoring systems. Helps with accessible browser-based communication and user interface.
- In November 2022, Siemens renewed and upgraded its Scalance XC/XR-300 series of industrial Ethernet switches with additional features for next-generation industrial networks. The so-called managed layer 2 switches of the Scalance X Industrial Ethernet Switch product family are available in both a compact model and a 19-inch version for control cabinets.
Understand The Key Trends Shaping This Market
Download Sample
IT & Telecommunication is Anticipated to be the Fastest Growing Segment
- To advance the Vision 2030 goals of digital transformation through e-commerce, digital education, digital health, smart cities, national data, and e-government, MCIT aims to develop a strong, state-of-the-art digital infrastructure. Saudi Arabia's ICT strategy for this year calls for creating more than 25,000 new jobs, growing the IT industry and new technologies by 50%, and increasing the sector's contribution to GDP by USD 13.3 billion.
- As digitization increases, the government's focus is now on establishing cloud services. Under Saudi Vision 2030, foreign investment is encouraged, particularly in the technology sector. The implementation of the cloud-first strategy in 2019 also accelerated the uptake of innovative technologies such as AI for Industrial 4.0.
- The Cloud Computing Regulatory Framework, which the Communications and Technology Information Commission adopted, intends to improve cloud computing services in the country and promote regulatory openness. The country's ability to create data centers would be made easier by the need for racks as large amounts of data are processed and stored.
- Based on the government's digital transformation initiatives and advanced tech such as IoT and artificial intelligence (AI) across the enterprise, Saudi Arabia's ICT market is expected to grow steadily during the forecast period. Telecom operators are investing significant efforts in developing enterprise-centric or application-specific service portfolios to leverage investments in 5G networks, which is expected to increase telecom services revenues in the region.
- Around 97.6% of people are expected to be online by 2026 as governments seek additional funding for broadband networks. With spectrum above 1100 GHz now liberalized and available to carriers, mobile internet speeds have increased to 105.42 Mbps. Saudi Arabia currently ranks 6th internationally and 2nd among G20 countries, approximately 250% above the global average.
- Saudi Arabia aims to have state-of-the-art digital infrastructure and connectivity by 2030. NEOM, Red Sea, Qiddiya, Waad Alshamal, and SPARK are the smart cities that the country is currently building. Discussion topics include artificial intelligence, data centers, cloud computing, and industrialized Internet of Things (IoT). Saudi Arabia also wants to build state-of-the-art infrastructure in its current five cities in order to be among the top 100 cities in the world.
