The Data Center Switch Market is estimated to be valued at US$ 16087.09 Mn in 2023 and is expected to exhibit a CAGR of 5.4% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Data center switches are networking devices used within communication infrastructure to facilitate network and connectivity within data centers. They allow servers, storage systems and other networking devices to communicate with each other. Growing dependence on cloud computing services by enterprises for improved productivity and efficiency is a major factor driving growth of data center switch market.
Market key trends:
Rising adoption of cloud computing and increasing deployment of cloud infrastructure globally is one of the major trends supporting growth of data center switch market. Cloud computing allows enterprises to focus more on their core businesses rather than investing resources in setting up and maintaining IT infrastructure. It offers flexibility, scalability and reduced costs of operations. With increasing digital transformation of businesses and migration to cloud platforms, the demand for high-performance and scalable data center infrastructure including switches is growing steadily. According to Synergy Research Group, spending on cloud infrastructure services exceeded $100 billion in 2021 and is estimated to grow at over 20% annually through 2026. Growing reliance on cloud based storage, computing and other services is fueling installations of data center switches globally.
Threat of new entrants: Low capital requirement and established brand loyalty by existing players make it difficult for new players to enter the market. Bargaining power of buyers: Large buyers have significant bargaining power due to the availability of substitutes and their ability to play one vendor against another. Bargaining power of suppliers: A few specialized component manufacturers exist; however, the threat is moderate due to availability of alternatives. Threat of new substitutes: Threat of new substitutes is low as switching costs are high for customers. Competitive rivalry: Intense competition exists among existing vendors to gain market share.
Strengths: Product innovation and ability to provide customized solutions. Weaknesses: Higher costs compared to best-in-class switches. Opportunities: Increasing demand for high-performance networking infrastructure driven by growth in data traffic. Threats: Commoditization of switches limits pricing power and margin pressures.
The Global Data Center Switch Market Size is expected to witness high growth, exhibiting CAGR of 5.4% over the forecast period, due to increasing demand for higher bandwidth and lower latency across various industry verticals. North America dominates the market currently, however Asia Pacific is expected to witness the highest growth during the forecast period due to rapid digitalization and strong government support for data center infrastructure development in countries such as China and India.
Key players operating in the data center switch market include Silicom Ltd Connectivity Solutions, Cisco Systems Inc., D-Link Corporation, Arista Networks Inc., Quanta Cloud Technology (Quanta Computer), Juniper Networks Inc., ZTE Corporation, Hewlett Packard Enterprise, Fortinet Inc., NEC Corporation, Mellanox Technologies (NVIDIA), Huawei Technologies Co. Ltd., Dell EMC, H3C Holdings Limited (Hewlett Packard Enterprise), Extreme Networks Inc., and Lenovo Group Limited.
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it