Data Center Networking Market Size is projected to reach USD 44.52 billion by 2031, growing at a CAGR of 6.02%: Straits Research

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Technological advancements have resulted in the installation of high-end networking solutions for supporting high-bandwidth data traffic, and the requirement for virtualization of networking infrastructure has resulted in the adoption of Software Defined Networking (SDN), thereby contributing to market growth.

New York, United States, March 19, 2024 (GLOBE NEWSWIRE) — Data center networking incorporates various networking tools, such as switching, routing, load balancing, analytics, etc., to simplify storing and processing data and applications. These infrastructures allow for the transmission of high-quality data traffic and are essential. Modern data center networking architectures employ full-stack networking and security virtualization solutions that enable centralized management and granular security controls while supporting diverse data services connecting VMs, containers, and bare metal applications. The most cutting-edge data center networking technologies connect and protect every aspect of a company’s environment while continuously adapting to users’ and applications’ evolving requirements.

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Growth in Software-defined Networking Adoption Drives the Global Market

According to Straits Research, “The global data center networking market size was valued at USD 26.31 billion in 2022. It is estimated to reach USD 44.52 billion by 2031, growing at a CAGR of 6.02% during the forecast period (2023–2031).” Software-defined networking (SDN) in a data center is essential for decoupling the control from the program and connecting it to a software-based controller. SDN can be implemented on flexible and vendor-agnostic networks, which is advantageous for data center operators, network operators, and end users. In several locations, SDN adoption is acquiring traction. The implementation of SDN provides economic benefits to data center operators.

SDN enables customers to partition the network between the end user and the data center to implement distinct network security parameters for data traffic. Several customers have begun implementing software-defined networking to virtualize their operations. Isbank, a private bank based in Turkey, has adopted Huawei’s software-defined data center networking solution to accommodate its expanding business requirements. Consequently, the increase in software-defined networking adoption is driving market growth.

Growing Adoption of AI and ML Creates Tremendous Opportunities

AI implementation in data centers will allow data center administrators to reduce OPEX. AI will reduce the personnel required for workload management and the burden on IT teams. Adopting artificial intelligence and machine learning will increase demand for software-defined networking solutions. In addition, adopting AI in data centers has prompted operators to employ network virtualization to enhance the speed and efficiency of network architecture.

Utilizing AI can improve data center infrastructure and increase demand for new technology switches and other network infrastructure. Demanding computing power applications such as artificial intelligence necessitate a fast interconnection infrastructure that can quickly transmit data, so the demand for ethernet switches with more ports will increase. Thus, the increasing adoption of AI and ML in data center networking will create opportunities for market expansion.

Regional Analysis

North America data center networking market share is anticipated to exhibit a CAGR of 5.61% during the forecast period. In terms of data center developments, adoption of innovative technology, and market innovations, the market for data centers in North America is the fastest-growing in the world. The region is a main driver and incumbent for all new technological advancements in the data center industry. The North American data center market is driven by factors such as the widespread deployment of 5G services and regional organizations’ adoption of IoT, big data, and artificial intelligence. In addition, cloud service providers make substantial investments in the North American market. The customization of servers by cloud operators in collaboration with the OCP platform. Therefore, cloud service providers design their network infrastructure primarily to enhance the efficacy and adaptability of data center facilities.

Asia-Pacific is estimated to exhibit a CAGR of 8.79% over the forecast period. South Korea and Japan were some of the region’s earliest adopters of 5G, and operators are still actively working to expand coverage there. China is anticipated to become one of the largest 5G markets, accounting for over one-third of all 5G connections worldwide by 2024. Telecommunications service providers in countries such as Malaysia and India also aim to launch 5G commercially by 2022. In addition, Australia adopted a combination of 5G FDD GHz and TDD with a spectrum range of 2.1 GHz and 3.5 GHz, respectively, using the carrier aggregation technique, according to the June 2021 Ericsson Mobility Report. In Asia-Pacific, the demand for cloud-based services is driven by digitalization. The presence of some of the largest cloud service providers in Asia-Pacific will present data center operators with opportunities to build network infrastructure.

Key Highlights

  • Based on industry, the global data center networking market is bifurcated into BFSI, government, cloud, IT and telecom, and other industry sectors. The cloud sector segment dominates the global market and is projected to exhibit a CAGR of 6.24% over the forecast period.
  • Based on product, the global data center networking market is segmented into ethernet switches, routers, storage networking, and other network infrastructure. The Ethernet switches segment owns the market and is predicted to expand at a CAGR of 5.80% over the forecast period.
  • North America is the most significant global data center networking market shareholder and is anticipated to exhibit a CAGR of 2.61% during the forecast period.

Competitive Players

The key global data center networking market players are Dell Technologies, Cisco Systems, Huawei, Intel, Alcatel-Lucent Enterprise, Arista Networks, Broadcom, D-Link, Enterprise Engineering Solutions (EES), Extreme Networks, Fujitsu, Hewlett Packard Enterprise (HPE), Huawei, Lenovo, and others.

Market News

  • In April 2023,Rai Way introduced Rai Way Edge, a new network of interconnected data centers in Italy. Rai Way Edge is a carrier-neutral participant connected to Italy’s major national fiber optic networks. Utilizing its nationwide network of data centers enables businesses to satisfy the rising demand for digital transformation.
  • In August 2023, Google Cloud introduced Cross-Cloud Network, an open and programmable global cloud networking platform. The Cross-Cloud Network service is a combination of new and existing technology from Google and its partners, and it is designed to help enterprises operate across multiple clouds.

Global Data Center Networking Market: Segmentation

By Industry

  • BFSI Sector
  • Government Sector
  • Cloud Sector
  • IT and Telecom Sector
  • Other Industry Sectors

By Product

  • Ethernet Switches
  • Storage Networking
  • Routers
  • Other Network Infrastructure

By Regions

  • North America
  • Europe
  • The Middle East & Africa
  • Asia-Pacific

Get Detailed Market Segmentation @ https://straitsresearch.com/report/data-center-networking-market/segmentation

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