Data Center Networking Market

The Data Center Networking Market Is Expected To Be Flourished By Rapid Growth In Data Center Operations


Data center networking equipment is utilized to provide networking infrastructure within data centers. This includes networking equipment such as routers, switches, network optimizers, firewalls, load balancers, and WAN optimization controllers. Growing volume of data generated and requirement for robust networking capabilities within data centers are key factors driving demand for data center networking solutions. Large enterprises, cloud service providers, and colocation centers are establishing more number of hyper-scale and large-scale data centers globally which requires high-performance networking infrastructure to handle large data traffic.

The global data center networking market is estimated to be valued at US$ 27.08 billion in 2024 and is expected to exhibit a CAGR of 5.5% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.

Market Dynamics:

Rapid growth in data center operations is expected to significantly drive the data center networking market growth over the forecast period. Establishment of hyperscale data centers by major cloud players such as AWS, Microsoft, Google are necessitating large-scale networking equipment. For instance, according to a report from Synergy Research Group, global hyperscale data center operators will collectively invest over $800 billion during 2022-2026 on building new data center infrastructure including networking equipment. Growing usage of technologies such as AI, IoT, big data analytics are resulting in generation of huge volumes of data that requires robust networking infrastructure for storage and processing. This in turn is anticipated to substantially boost the demand for data center networking solutions worldwide. Moreover, growing adoption of advanced technologies such as software defined networking and network functions virtualization are poised to open lucrative growth opportunities for market players in the coming years.

Segment Analysis

The global data center networking market is dominated by infrastructure segment. Data center networking infrastructure includes switches, routers, network security equipments, WAN optimization appliances and ethernet switches. Infrastructure segment currently holds around 60% share of the overall market owing to increasing adoption of cloud computing services and rising demand for reliable high speed connectivity solutions among enterprises. Growing network traffic due to digitization is also driving demand for high performance next generation networking equipments across data centers.

PEST Analysis

Political: Data sovereignty laws and regulations around data privacy and security are influencing investment decisions of enterprises for data center location. Various trade wars and sanctions are also impacting global supply chain dynamics.

Economic: Growth in digital economy, increasing internet penetration and rising investments in digital transformation initiatives by organizations are fueling spending on data center infrastructure including networking solutions.

Social: Rising smartphone and internet users are generating huge data traffic driving need for more data centers and advanced networking infrastructure to support applications. Changing workforce demographics also impact organizational network strategies.

Technological: Emerging technologies like 5G, multi-access edge computing (MEC), software defined networking (SDN) and network function virtualization (NFV) are shaping future of data center networks and prompting vendors to innovate offerings. Adoption of AI/ML is also gaining traction for analytics and automation in networks.

Key Takeaways

The Global Data Center Networking Market Size is expected to witness high growth over the forecast period supported by increasing demand for cloud services. The global Data Center Networking Market is estimated to be valued at US$ 27.08 Bn in 2024 and is expected to exhibit a CAGR of 5.5% over the forecast period 2024 to 2031.

North America currently dominates regional analysis and is expected to continue its lead supported by large scale cloud deployments and strong government emphasis on digital initiatives in the US.

Key players operating in the data center networking market are BASF, DOW Chemicals, Huntsman Corporation, Ineos oxide, Saudi basic industries corporation, Exxon Mobil Corporation, Du Pont de Nemours & Company. Key players are focusing on developing innovative software defined solutions, enhancing security capabilities and leveraging multi-cloud architectures to strengthen their market presence.

1.      Source: Coherent Market Insights, Public sources, Desk research
2.      We have leveraged AI tools to mine information and compile it