Data Center Switch Market Size & Share, by End-user (Government, IT & Telecom, Retail, BFSI, Enterprise); Switch Type (TOR Switch, Core); Technology (Fiber Channel, Ethernet, InfiniBand) - Global Supply & Demand Analysis, Growth Forecasts, Statistics Report 2023-2035

  • Report ID: 4893
  • Published Date: May 02, 2023
  • Report Format: PDF, PPT

Global Market Size, Forecast, and Trend Highlights Over 2023-2035

Data Center Switch Market size is estimated to reach USD 44.58 Billion by the end of 2035, witnessing around 7.92%CAGR during the forecast period, i.e., 2023-2035. In the year 2022, the industry size of data center switch was USD 17.86 Billion. The growth of the market can be attributed to the increasing adoption of data centers that are demanding reliable switching solutions across the globe. Furthermore, there has been a surge in the demand to the storage solutions, owing to which data architecture is changing for provide more benefits. Therefore, it is expected to boost the growth of global data center switch industry . As per the estimates, there are around 7,999 data centers in the entire world. Approximately 30% of them are in the United States.

Data center switch is one of the most important requirements in the premises of the data center, and is basically found in the server areas. Since the data center network infrastructure are disaggregated owing to which the new type of switch such as data center switch awareness is growing among the data centers. They are mainly used by large enterprises, that are capable of adopting technologies.  There are three types of data center switches, such as the TOR switch, core, and others that are witnessing a boom in the market owing to the rising demand for easier automation systems, and data center management by the different end-users. In addition, the surging trend of bare metal switches and the growing requirement for bandwidth in the data centers are also expected to provide opportunities for the growth of the market.


Data Center Switch Market
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Data Center Switch Sector: Growth Drivers and Challenges

Growth Drivers

  • Growing Demand for Internet Connection – Data Center switches provide a bridge to build a network connection in a data center in order to send, and receive data from one place to another. Hence, growing demand for internet connections is estimated to increase the growth of the market in the upcoming years. As of January 2023, approximately 4 billion individuals used the internet, accounting for approximately 63 percent of the world's population.
  • Rising Cloud Adoption – The data center switch is preferable for cloud providers that largely depend on virtualization. Furthermore, there has been an increasing adoption of cloud technologies, which is also expected to expand the market’s growth over the forecast period. Cloud services were used by around 93% of organizations in the United States in 2022. Nonetheless, in the same year, nearly 66% of enterprise infrastructure in the United States was cloud-based.
  • Increasing Demand for Storage Solutions – The increasing demand for storage solutions owing to computing, and big data platforms is one of the major factors in the development of data centers. Thus, it is predicted to surge the growth of the global market. According to the most recent data, nearly 3% of the data generated and consumed in 2020 was saved globally and stored until 2021, indicating that only a small part of this newly created data is kept. The installed base of storage capacity is expected to grow at an annual average pace of around 18% between 2020 and 2025, in response to the large increase in data volume.
  • Growing Demand for Efficient Energy Consumption – High speed is provided by the data center switches that reduce the consumption of energy. Moreover, a large volume of data is exchanged through the switches in the data centers, which further contributing for the efficient use of energy. Therefore, it is anticipated to rise the growth of the market in the upcoming years.  Many of the largest data centers in the world might house tens of thousands of IT devices each and require more than 99 megawatts (MW) of electricity, which is comparable to powering around 79,999 American households.

Challenges

  • Lack of Advanced Data Center Infrastructure- There is a need for several technologies, such as cloud technologies, to be deployed in the data centers in order to make the data center more efficient. Moreover, there is a requirement for proper infrastructure that requires more resources, and is expected to hamper the growth of the market in the upcoming years.
  • High Operational Cost for Data Center Switches
  • Rising Government Regulations Regarding the Data Centers

Data Center Switch Market: Key Insights

Base Year

2022

Forecast Year

2023-2035

CAGR

~7.92%

Base Year Market Size (2022)

~ USD 17.86 Billion

Forecast Year Market Size (2035)

~ USD 44.58 Billion

Regional Scope

  • North America (U.S., and Canada)
  • Latin America (Mexico, Argentina, Rest of Latin America)
  • Asia-Pacific (Japan, China, India, Indonesia, Malaysia, Australia, Rest of Asia-Pacific)
  • Europe (U.K., Germany, France, Italy, Spain, Russia, NORDIC, Rest of Europe)
  • Middle East and Africa (Israel, GCC North Africa, South Africa, Rest of the Middle East and Africa)
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Data Center Switch Segmentation

End-User (Government, IT & Telecom, Retail, BFSI, Enterprise)

The global market is segmented and analyzed for demand and supply by end user into government, IT & telecom, retail, BFSI, enterprise, and others. Among these, the IT & telecom segment is expected to hold the largest share over the forecast period. This can be attributed to the IT sector needs hyperscale data centers and on-premise private data storage for its operations, depending on the size of the company. Additionally, as SaaS providers have proliferated, cloud storage has grown in popularity. Moreover, a large amount of data is generated in the IT and telecom sectors which increases the demand for data centers and other solutions. Therefore, it is anticipated to boost the growth of the segment by the end of 2035. For instance, there are currently 29,999 or more SaaS companies functioning worldwide.

Technology (Fiber Channel, Ethernet, InfiniBand)

The global data center switch market is also segmented and analyzed for demand and supply by technology into fiber channel, ethernet, and fiber channel. Amongst these three segments, the ethernet segment is expected to garner a significant share in the year 2035. The growth of the segment in the market can be attributed to the high scalability provided by ethernet switches. Moreover, managed ethernet switches are able to meet the data center increasing connectivity requirements with higher bandwidth. In addition, the ethernet switch solutions are the most preferable option for  large-scale data centers that need better internet connectivity and storage capacity.  Hence, all these factors are predicted to surge the segment’s growth by the end of 2035.

Our in-depth analysis of the global market includes the following segments:

  By End User

  • Government

  • IT & Telecom

  • Retail

  • BFSI

  • Enterprise

  • Others

  By Switch Type

  • TOR Switch

  • Core

  • Others

 

   By Technology

  • Fiber Channel

  • Ethernet

  • InfiniBand

 


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Data Center Switch Industry - Regional Synopsis

North American Market Forecast   

The market share of data center switch in North America, amongst the market in all the other regions, is projected to be the largest with a share of about 32% by the end of 2035. The growth of the market can be attributed on the back of rise in internet usage and a rise in energy demand from massive data centers. Moreover, the increasing adoption of technologies in the region, such as 5G technology, block chain technology, big data, AI, and others is further expected to expand the market’s growth in the region. According to the report’s estimates, more than 90 percent of the organizations in the United States are investing in big data and artificial intelligence projects. Moreover, more than 20 percent of the organizations are using big data analytics in the US. In addition, large amount of convergence has been seen in the North America region, resulting in reduced data center complexity.

Europe Market Forecast

The European data center switch market is estimated to be the second largest, registering a share of about 24% by the end of 2035. The expansion of investments in the IT industry and the existence of significant important players in this sector are both expected for the market's growth in this region. Furthermore, the increasing government initiatives for the development of IT infrastructure is further estimated to drive the industry growth in the upcoming years.   In addition, the growing trend of building green data centers for managing, storing, and transferring information has helped numerous software companies reduce their energy use and overall energy expenditures. All these factors, are together expected to contribute to growth of the market in the European region.

APAC Market Statistics

Further, the market in the Asia Pacific, amongst the market in all the other regions, is projected to hold a majority of the share by the end of 2035. The growth of the market can be attributed majorly to the rising generation of data among organizations in countries such as China, India, and others, as these countries are emerging and increasing the scope of data centers. In addition, the rising construction of data centers in the region, is further predicted to surge the growth of the global data center switch market in the Asia Pacific region.

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Data Center Switch Market Share
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Companies Dominating the Data Center Switch Landscape

top-features-companies
    • Cisco Systems, Inc.
      • Company Overview
      • Business Strategy
      • Key Product Offerings
      • Financial Performance
      • Key Performance Indicators
      • Risk Analysis
      • Recent Development
      • Regional Presence
      • SWOT Analysis
    • Arista Networks, Inc.
    • NEC Corporation
    • Huawei Technologies Co., Ltd.
    • Juniper Networks, Inc.
    • Hewlett Packard Enterprise Development LP
    • Dell Inc.
    • Extreme Networks, Inc.
    • D-Link Corporation
    • ZTE Corporation

In-the-news

In The News

  • NEC Corporation (NEC; TSE: 6701) will build two new green data centers using 100% renewable energy to meet the growing demand for data centers. The "NEC Kanagawa Data Center: Phase 2 Building" will open in the second half of 2023, while the "NEC Kobe Data Center: Phase 3 Building" will open in the first half of 2024.
  •  Arista Networks, Inc. announced the addition of 8 new switches that also includes a high-end box that supports 800 G of bandwidth.

 

Author Credits:  Abhishek Verma, Hetal Singh


  • Report ID: 4893
  • Published Date: May 02, 2023
  • Report Format: PDF, PPT

Frequently Asked Questions (FAQ)

Growing demand for efficient energy consumption, and rising cloud adoption by the enterprises are the major factors driving the market growth.

The market size of data center switch is anticipated to attain a CAGR of 7.92 % over the forecast period, i.e., 2023-2035.

High operational cost for data center switches, and rising government regulations regarding the data centers are estimated to be the growth hindering factors for the market expansion.

The market in the North American region is projected to hold the largest market share by the end of 2035 and provide more business opportunities in the future.

The major players in the market are Arista Networks, Inc., NEC Corporation, Huawei Technologies Co., Ltd., Juniper Networks, Inc., Hewlett Packard Enterprise Development LP, Dell Inc., Extreme Networks, Inc., D-Link Corporation, ZTE Corporation, and others.

The company profiles are selected based on the revenues generated from the product segment, the geographical presence of the company which determines the revenue generating capacity as well as the new products being launched into the market by the company.

The market is segmented by switch type, technology, end user, and by region.

The IT & telecom segment is anticipated to garner the largest market size by the end of 2035 and display significant growth opportunities
Data Center Switch Market Report Scope
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