by The data center switch helps in connecting hundreds to thousands of data servers within the data centers to facilitate fast and secure data transfer. It offers high-speed data transfer rates, non-blocking architecture, and high port density. Data center switches support Ethernet, Fibre Channel, and InfiniBand technologies that help transfer data between different devices. Hyperscale data centers hold immense computing resources and storage facilities in large campuses or buildings to cater massive data processing requirements for various cloud, content delivery, and Internet services. With the rising deployment of hyperscale data centers worldwide due to increasing consumption of cloud and Internet services, the demand for high-performance data center switches is projected to propel over the forecast period.
The global data center switch market is estimated to be valued at US$ 16087.09 Mn in 2023 and is expected to exhibit a CAGR of 7.8% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
Rising deployment of hyperscale data centers is one of the major drivers propelling the growth of the data center switch market. According to a report by Synergy Research Group, the spending on hyperscale data center construction reached US$ 42 billion in 2021, which is estimated to increase further over the next few years. Hyperscale data centers require high-density switches to cater data transfer needs of numerous servers. Thus, increased development of hyperscale facilities indirectly augments the demand for advanced data center switches.
Additionally, growing focus of enterprises to adopt converged and hyper-converged infrastructure is resulting into single box solutions integrating storage, computing, networking, and virtualization resources. This factor streamlines data center management and further stimulates the need for smart data center switches.
Segment Analysis
The data center switch market is segmented into copper switches and optical switches. The optical switches segment is dominating the market and is expected to witness high growth during the forecast period. Optical switches are being increasingly adopted by data center operators as they offer benefits such as higher bandwidth, lower latency and enhanced security against hacking when compared to traditional copper switches.
PEST Analysis
Political: Government initiatives to develop local data center infrastructure and tax incentives for data center operators are positively impacting the growth of the data center switch market.
Economic: Increasing investments by hyperscalers and retail colocation service providers in building new data centers and upgrading the existing infrastructure is fueling demand for data center switches.
Social: Rising digitalization trends across industries, growing mobile data traffic and proliferation of IoT devices are increasing the need for data storage, thereby driving the need for data center switches market.
Technological: Advancements in networking technologies such as 400G Ethernet, storage virtualization and artificial intelligence are propelling data center operators to modernize their networking infrastructure, thus benefiting the data center switch market.
Key Takeaways
Global Data Center Switch Market Size is expected to witness high growth during the forecast period, spurred by increasing investments in data center construction especially in the Asia Pacific and Latin American regions.
Regional analysis:
The Asia Pacific region accounts for approximately 35% share of the global data center switch market led by countries such as China, India and Japan. Hyperscalers in the region such as Alibaba, Baidu and Tencent are aggressively investing in building new data centers to capture the exponential growth in internet user base and cloud adoption. Taiwanese manufacturers such as Delta Electronics and Lite-On Technology along with Chinese firms Huawei and Inspur are some of the leading suppliers of networking switches in the Asia Pacific region.
Key players operating in the data center switch market are Cisco, HPE, Dell Technologies, Extreme Networks, Arista Networks, Huawei, Lenovo and Inspur. Cisco dominates the global data center switch market with their comprehensive product portfolio offering options ranging from top-of-rack switches to core switches for various data center requirements. Huawei has also gained significant market share in China and Europe leveraging their cost-effective portfolio and government initiatives in these regions.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
