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), COVID19 Impact Analysis, Regional Outlook, Growth Potential, Competitive Market Share & Forecast, 2021 – 2027

Published Date: May 2021  |  Report ID: GMI2578  |  Authors: Preeti Wadhwani, Saloni Gankar

Report Format: PDF   |   Pages: 300   |   Base Year: 2020

Summary Table of Contents Industry Coverage Methodology

Industry Trends

Data Center Networking Market size estimated at over USD 20 billion in 2020 and will grow at around 15% CAGR from 2021 to 2027.

Data Center Networking Market Overview

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Data center networking is the amalgamation of several networking resources such as switching, load balancing, routing, and analytics to facilitate the storage and processing of data and applications. Data center networking is capable of handling high bandwidth data delivery to and from storage endpoints, switches, and servers enables to move massive data efficiently.

The increasing adoption of digitalization across several industrial processes is accelerating the demand for cloud services to optimize business operations. As network connections are spread out across a large geographical & virtual space, there will be increasing demand for faster processing, accessible architecture, and management solutions in the coming years. Such factors are driving the need for cloud solutions to manage the effective operations and connectivity of IT devices.

The rising acceptance of technologies, such as AI, machine learning, and 5G, will boost the cloud computing market, in turn, supporting the demand for high performance data center networking solutions. The advent of compute-intensive technologies, such as deep learning and IoT, will support the market growth during the forecast timeframe.

In 2020, the coronavirus pandemic hampered the data center networking market expansion due to stringent lockdowns imposed in several countries. The global economy contracted sharply by around 3% in 2020. The market witnessed a temporary decline in 2020 on account of the halts in data center construction projects following the stringent lockdowns imposed. There were delays in the procurement of raw materials and electronic components owing to the disruptions in supply chains. However, the market will observe growth in 2021 led by the relaxations in lockdowns coupled with the increasing demand for data traffic management across several industry verticals.

Data Center Networking Market Report Coverage
Report Coverage Details
Base Year:2020
Market Size in 2020:around USD 20 billion
Forecast Period:2021 to 2027
Forecast Period 2021 to 2027 CAGR:15%
2027 Value Projection:around USD 45 billion
Historical Data for:2017 to 2020
No. of Pages:300
Tables, Charts & Figures:271
Segments covered:Component, Application, Region
Growth Drivers:
  • Transition to cloud-based solutions in the U.S.
  • Increase in organizational data traffic and big data analytics in the UK and Germany
  • Growth of mega data centers and growth of colocation in China, India and Mexico
  • Rising adoption of 100 Gb switch ports 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 South America
  • Decline in costs of semiconductor components in Asia Pacific
  • Movement from HDDs to SSDs in data centers across the world
Pitfalls & Challenges:
  • Lack of highly skilled workforce in underdeveloped and developing economies
  • Irregularities in data protection regulatory landscape

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The advanced electronics industry in China to support the market progression

Hardware solutions in the China data center networking market are anticipated to showcase an 18% growth rate through 2027. China is a major exporter of electronic components and goods to several economies globally. Servers are fundamental components of an efficient data center networking architecture as they provide the processing power for computing workloads and store valuable data. IT infrastructure has shifted from conventional on-premises physical servers to virtual networks that support applications in a multi-cloud environment. The robust electronics and cloud computing market in China will support the R&D associated with the manufacture of high-performance servers that cater to the modern data center networking requirements. The ease of availability of raw materials required for server production coupled with strong in-house electronic component manufacturing capabilities will support the data center server industry growth.

The developed colocation market in the U.S. will support the demand for robust data center networking solutions

Data Center Networking Market Size

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In the U.S., colocation applications will expand at 14% CAGR by 2027. The rise in the number of SMEs in the country has supported the data center colocation market demand over the coming years. Businesses with budgetary constraints are adopting colocation services for data management requirements without the need to invest in constructing in-house data center infrastructures. The robust manufacturing industry in the region adopting advanced digital technologies, such as IoT and AI, has also upsurged the demand for colocation services. Colocation providers focus on adopting robust data center networking infrastructures to ensure high-quality data processing. The increasing competition amongst market players, such as Digital Realty and Equinix Inc., in the colocation industry in the U.S., will foster the demand for advanced data center networking solutions.

The expanding big data analytics market in European region will support the demand for high-performance data center networking infrastructures

Europe Data Center Networking Market

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Europe data center networking market captured over 30% of revenue share in 2019. The regional market will observe steady growth owing to the robust manufacturing industry in the region accepting advanced technologies such as AI and IoT. Big data analytics is applied in processes related to production, distribution, and delivery. The high data traffic from these compute-intensive technologies results in the demand for data center networking solutions that ensure real-time data processing. The analytics technology is transforming the healthcare, BFSI, and automotive industries in the UK and Germany.

The implementation of Industry 4.0 in Germany, resulting in smart manufacturing practices has led to increasing demand for seamless connectivity solutions. For instance, The Bosch Plant Homburg connects multiple partners in the logistics value chain with an RFID-based automotive network. The growing complexity of interconnected devices coupled with the accumulation of large volumes of data is propelling the demand for robust data center networking infrastructures.

Integrating advanced technologies into the networking equipment forms a key strategy amongst market players

The companies operating in the market are focusing on launching innovative solutions catering to the changing end-user demands. For instance, in March 2021, Huawei Technologies Co. Ltd. launched its latest CloudFabric 3.0 Hyper-Converged data center network solution. This future-proof solution is ideal for constructing lossless computing and storage networks based on an all-Ethernet architecture. New product launches are enabling market players to sustain the increasing competition.

Key leaders functioning in the market include Alcatel-Lucent, Arista Networks, Avaya, Broadcom Inc., Cisco Systems Inc., Dell Inc., Delta Electronics Inc., Extreme Networks, Fujitsu Ltd., Hewlett Packard Enterprise, Huawei Technologies Co. Ltd., IBM Corporation, Microsoft Corporation, Intel Corporation, Juniper Networks, and NEC Corporation.

The data center networking market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue in USD from 2017 to 2027, 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
  • South America
    • Brazil
    • Colombia
    • Chile
    • Argentina
  • Middle East & Africa (MEA)
    • GCC
    • South Africa

Frequently Asked Questions (FAQ) :

The overall market revenue for data center networking was recorded at USD 20 billion in 2020 and will expand at a CAGR of nearly 15% through 2027.
With the advanced electronics industry, China data center networking market from hardware solutions will grow at an 18% rate through 2027.
The overall market from colocation applications in the U.S. will record a CAGR of 14% through 2027 owing to the increasing number of SMEs in the region.
Europe accounted for 30% of data center networking market share in 2019 and will grow with the increasing adoption of advanced technologies by manufacturing industries.

Premium Report Details

  • Published Date: May 2021
  • Pages: 300
  • Tables: 243
  • Charts / Figures: 28
  • Companies covered: 19
  • Countries covered: 20

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