Data Center Switch Market Analysis by End User (Government, IT & Telecom, Retail, BFSI, Enterprise, and Others); by Switch Type (TOR Switch, Core, and Others); and by Technology (Fiber Channel, Ethernet, and InfiniBand) – Global Supply & Demand Analysis & Opportunity Outlook 2023-2035
Buy Now Report ID: 4893 | Published Date: May 02, 2023
Data Center Switch Market size is estimated to reach ~USD 44.58 Billion by the end of 2035 by growing at a CAGR of ~7.92% over the forecast period, i.e., 2023 – 2035. In addition to this, in the year 2022, the market 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.
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Base Year |
2022 |
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Forecast Year |
2023-2035 |
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CAGR |
~7.92% |
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Base Year Market Size (2022) |
~ USD 17.86 Billion |
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Forecast Year Market Size (2035) |
~ USD 44.58 Billion |
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Regional Scope |
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Growth Drivers
Challenges
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.
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 data center switch industry includes the following segments:
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By End User |
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By Switch Type |
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By Technology |
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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.
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.
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.
In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.
Author Credits: Abhishek Verma, Hetal Singh
Ans: Growing demand for efficient energy consumption, and rising cloud adoption by the enterprises are the major factors driving the market growth.
Ans: The market size of data center switch is anticipated to attain a CAGR of ~7.92 % over the forecast period, i.e., 2023 – 2035.
Ans: 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.
Ans: 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.
Ans: 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.
Ans: 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.
Ans: The market is segmented by switch type, technology, end user, and by region.
Ans: The IT & telecom segment is anticipated to garner the largest market size by the end of 2035 and display significant growth opportunities
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