Data Center Networking Market Size By Component (Solution [Ethernet Switches, Routers, Servers, (ADC) Application Delivery Controller], Service [Professional, Managed]), By Application (Colocation, BFSI, Energy, Government, Healthcare, Manufacturing, IT & Telecom), Industry Analysis Report, Regional Outlook, Growth Potential, Competitive Market Share & Forecast, 2019 – 2026

Published Date: Nov 2019  |  Report ID: GMI2578  |  Authors: Ankita Bhutani, Saloni Gankar

Report Format: PDF   |   Pages: 290   |   Base Year: 2018




Summary Table of Contents Industry Coverage Methodology

Industry Trends

Data Center Networking Market size estimated at over USD 16 billion in 2018 and will grow at around 15% CAGR from 2019 to 2026.
 

Data Center Networking Market

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Data center networking refers to the process of establishing and interconnecting components, such as storage, network-based devices, and equipment, within a data center facility. The market is segmented into hardware solutions and services, which consist of equipment, such as WAN optimization appliances, Ethernet switches, connecting cables, controllers, servers, and routers that aid in the movement of network transmissions. Demand for data center networking solutions is anticipated to grow owing to the inclination towards cloud and rising prominence of multi-tenant & colocation facilities.
 

The construction and implementation of advanced data centers will enable the handling of increased data and applications, driving the data center networking market share. Companies are highly investing in building new systems to support complex virtual environments, private & hybrid cloud requirements, and are inclining towards energy-efficient resources. To eliminate the involvement of human employees in maintaining manual data records, companies are adopting advanced data center networking technologies. The evolution of Software-Defined Networking (SDN) technology that provides several benefits, such as better granular security, lesser operating costs, and centralized network provision, is fueling the adoption of new data center networking solutions by replacing conventional systems. Transition towards cloud computing technology is a key market factor driving the industry growth owing to its benefits over traditional data centers such as ubiquitous access, multi-tenancy, better elasticity & scalability, and resiliency.
 

Virtualization and colocation services are the key industry trends being witnessed. Inclusion of multi-tenant data center services that will reduce operational costs are driving the market growth for colocation service providers. The colocation and migration of data centers provides increased redundancy, power capacity, robust & affordable bandwidth, business continuity, and disaster recovery. These facilities have fully redundant network connections to ensure the uninterrupted running of clients’ business-critical applications. They offer more power-per-square foot compared to conventional systems and allow companies to leverage innovations in high-density computing and server virtualization. The colocation technology supports businesses to smoothly transition to cloud migration by implementing cloud computing systems with increased performance and capacity, driving the market demand for advanced networking solutions in data centers.
 

Market players are providing efficient, compact, and sustainable data center networking products & solutions to maintain a competitive edge over other players. These activities are providing customers with sustainable and energy-efficient solutions that reduce their carbon footprints and aid in achieving sustainable goals. The players are heftily investing in the development of these modern and sustainable data center networking solutions. Moreover, the increasing adoption of green data center facilities is expected to drive the adoption of these energy-efficient networking technologies. Such factors are increasing the competition among market players for providing sustainable solutions.
 

Data Center Networking Market Report Coverage
Report Coverage Details
Base Year: 2018 Market Size in 2018: 16 Billion (USD)
Historical Data for: 2014 to 2018 Forecast Period: 2019 to 2026
Forecast Period 2019 to 2026 CAGR: 15% 2026 Value Projection: 45 Billion (USD)
Pages: 290 Tables, Charts & Figures: 309
Geographies covered (25): U.S., Canada, Mexico, UK, Germany, France, Spain, Poland, Benelux, China, India, Japan, Singapore, Australia, Indonesia, Brazil, Colombia, Venezuela, Bolivia, Chile, Peru, Argentina, GCC, South Africa, Morocco
Segments covered: Component, Application
Companies covered (19): Alcatel-Lucent Enterprise, Arista Networks, Inc., Avaya, Inc., Broadcom, Inc., Cisco Systems, Inc., Dell Inc., Delta Electronics, Inc., Extreme Networks, Inc., Fujitsu Ltd., Hewlett-Packard Enterprise, Huawei Technologies Co., Ltd., IBM Corporation, Intel Corporation, Juniper Networks, Inc., Microsoft Corporation, NEC Corporation, Schneider Electric SE, Siemens AG, VMware, Inc.
Growth Drivers:
  • Transition to cloud-based solution in the U.S.
  • Increase in organizational data traffic and big data analytics in the UK and Germany
  • Growth of mega data centers and trend of colocation in China, India, and Mexico
  • Rising adoption of 100Gb switch ports in the U.S. and UK
  • Development of broadband and internet infrastructure in India and the Philippines
  • Increase in the construction of new data centers and replacement of existing technologies in parts of South America
  • Decline in costs of semiconductor components in Asia Pacific
  • Movement from HDDs to SSDs in data centers globally
Pitfalls & Challenges:
  • Demand for highly skilled workforce for product development
  • Irregularities in the data protection regulatory landscape

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Upgrading and expanding data center infrastructures globally has driven the market demand for hardware solutions

Global data center networking market size, by hardware, 2018


Global data center networking market size, by hardware, 2018

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By hardware, the market is segmented into ethernet switches, routers, servers, application delivery controllers and others. The ethernet switch market size will expand at 17% CAGR over the forecast timespan owing to continuous enhancements and upgrades in the data center infrastructure. Digitalization, growing deployments, cloud adoption, and the evolution of third platform technologies are key factors driving the market growth. Growing demand for increased bandwidth will accelerate the adoption of 100 gigabit ethernet switches in the data center industry in 2019. Moreover, transitional shift of businesses and organizations toward high-speed ethernet products is driving the data center networking industry growth. The shipments for 25GE, 100GE, and white boxes have increased from large organizations and SMBs, contributing to the ethernet switch segment growth. In 2018, Cisco accounted for around 50% of the switch market size. Other companies offering ethernet switches include Huawei, Arista Networks, Juniper, and HPE.
 

Rapid growth in data generation & consumption in the IT & telecom sector is driving the market demand for advanced data center networking solutions

The increasing adoption of data center networking solutions is attributed to the rapid adoption of data center infrastructure in several industry verticals. Prominent end-users that are gaining traction include BFSI, IT & telecom, and colocation sectors. In 2018, the IT & telecom sector accounted for 25% of the data center networking market revenue share and will witness high adoption as they are beneficial for the effective connectivity and networking of data centers. The rapid growth in mobile users and internet subscribers has propelled the data consumption rate, requiring proper management and operation efficiency to serve telecom users, thereby providing an impetus to the data center market size. Conventional data center networks use function-based component networks, which are being replaced with Network Functions Virtualization (NFV) and SDN technologies. These alternatives are easier to handle, upgrade & modify and are comparatively affordable. Several countries including China and India are among the major economies, where high market demand for these data center networking solutions are expected to rise from the IT & telecom sector in the coming years.
 

Rapid infrastructure development of various application segments in Europe

Europe data center networking market size, by region, 2026 (USD Million)


Europe data center networking market size, by region, 2026 (USD Million)

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Aging energy networks in Europe have led to the need for infrastructure modernization. Government organizations in several countries are addressing the issues of inadequately interlinked networks and stressing on implementing sustainable data center networking solutions. The expansion and refurbishment of energy networks have unique network requirements for efficient management and storage of large data volume. Companies, such as Google and Microsoft Corporation, are investing in the European data center industry. For instance, Google announced plans of its data center campus expansion in Belgium in 2018. New startups and businesses in several countries using data centers to store the data generated. In 2016, around 660,000 companies were established in the UK, driving the market demand for enhanced data center infrastructure.
 

Rising demand for networking solutions in several sectors will offer opportunities for market growth

Key data center networking industry players include VMware, Inc., Siemens AG, Cisco Systems, Inc., Dell Inc., Schneider Electric, Microsoft Corporation, NEC Corporation, Juniper Networks, Huawei Technologies Co., Ltd., IBM Corporation, Intel Corporation, Hewlett-Packard Enterprise, Fujitsu Ltd., Extreme Networks, Delta Electronics, Inc., Brocade Communications, Avaya, Arista Networks, and Alcatel-Lucent. The industry is highly competitive owing to the rising applications/demands for networking solutions in industries such as healthcare, IT & telecom, and BFSI. The high initial investments for the deployment of technically advanced production machinery and skilled workforce for developing data center networking software & solutions are the major entry barriers for new market players. Furthermore, these technologies are susceptible to data security threats and privacy concerns, creating entry barriers for new players.
 

The data center networking market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue in USD from 2015 to 2026, for the following  segments:

Market by Component

  • Solution
    • Ethernet Switches
    • Routers
    • Servers
    • Application Delivery Controller (ADC)
    • Others
  • Service
    • Professional
    • Managed

Market by Application

  • Colocation
  • BFSI
  • Energy
  • Government
  • Healthcare
  • Manufacturing
  • IT & Telecom
  • Others

The above information is provided on a regional and country basis for the following:

  • North America
    • U.S.
    • Canada
    • Mexico
  • Europe
    • UK
    • Germany
    • France
    • Spain
    • Poland
    • Benelux
  • Asia Pacific
    • China
    • India
    • Japan
    • Singapore
    • Australia
    • Indonesia
  • South America
    • Brazil
    • Colombia
    • Venezuela
    • Bolivia
    • Chile
    • Peru
    • Argentina
  • Middle East & Africa (MEA)
    • GCC
    • South Africa
    • Morocco

 

Frequently Asked Questions (FAQ) :

The market is segmented into hardware solutions and services, which consist of equipment, such as WAN optimization appliances, Ethernet switches, connecting cables, controllers, servers, and routers that aid in the movement of network transmissions.
The construction and implementation of advanced data centers will enable the handling of increased data and applications, driving the market size. To eliminate the involvement of human employees in maintaining manual data records, companies are adopting advanced data center networking technologies.
The ethernet switches for the data center networking market will expand at 17% CAGR over the forecast timespan owing to continuous enhancements and upgrades in the data center infrastructure. Digitalization, growing deployments, cloud adoption, and the evolution of third platform technologies are key factors driving the growth.
Aging energy networks in Europe have led to the need for infrastructure modernization. Government organizations in several countries are addressing the issues of inadequately interlinked networks and stressing on implementing sustainable data center networking solutions. Moreover, Companies such as Google and Microsoft Corporation, are investing in the European data center industry.
In 2018, the IT & telecom sector accounted for 25% of the data center networking industry share and will witness high adoption as they are beneficial for the effective connectivity and networking of data centers.

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