Data Center Switch Market Anticipated to Reach $23.2 Billion by 2032, Expanding at a CAGR of 4.8%: Analysis by Persistence Market Research

The data center switch market is a thriving sector, fueled by the ever-growing demand for efficient and reliable network connectivity in the digital age. These specialized devices act as the silent heroes, directing the flow of data within data centers, ensuring seamless communication between servers, storage systems, and other critical IT infrastructure.

New York, Jan. 11, 2024 (GLOBE NEWSWIRE) — The global data center switch market was valued at USD 14.6 billion in 2022 and is projected to reach USD 23.2 billion by 2032, growing at a steady pace of 4.8% CAGR over the next decade.

The data center switch market is humming with activity, acting as the invisible backbone for our ever-growing digital world. These specialized devices handle the heavy lifting of data traffic within data centers, ensuring seamless communication between servers, storage systems, and other critical IT infrastructure.

The data center switch market is expected to witness lucrative growth in the next five years. Many servers in data centers need switches to connect with each other. The main reasons for this growth are the need for easier management of data centers, the increasing demand for cloud services, and the rise of internet content and web applications. Companies in the data center switch market can benefit from the growing use of bare-metal switches and the greater need for bandwidth in data centers.

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Driving Forces for Market Growth:

Data Center Traffic Boom: The insatiable demand for cloud services, streaming content, and web applications fuels the need for robust data center networks. More servers and storage necessitate reliable switches to handle the ever-increasing traffic.

Simplified Management and Automation: Data centers strive for efficiency, and automation is key. Advanced switches with smart features allow for simplified network management, reducing manual tasks and optimizing operations.

High Bandwidth Requirements: As data becomes richer and applications more demanding, the need for higher bandwidths arises. Modern switches equipped with technologies like 400GbE and 800GbE cater to this growing demand.

Bare-Metal Trend: The rising popularity of bare-metal switches, offering greater customization and control, presents lucrative growth opportunities for market players.

Market Scope:

What Factors Are Slowing Down the Demand for Data Center Switches Worldwide?

Many companies are using virtualization in their data centers. Virtualization helps solve hardware issues and makes it easier to move virtual computers.

Virtualization allows for better planning of capacity and resource allocation, reduces space needs by consolidating data, speeds up the deployment of new servers, improves manageability, and optimizes resource utilization.

As virtualization increases, interconnect technologies are also evolving. Virtual switches on the same servers are now handling connections between different servers, potentially reducing the need for switches over more advanced servers that offer better connectivity.

These evolving interconnect technologies might limit the growth of the global data center switch industry.

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Competitive Landscape:

Leading manufacturers of data center switches are bringing new solutions to the market. Additionally, they are using strategies like mergers, partnerships, and acquisitions to grow their presence.

Recent Developments

In October 2021, Aruba introduced the CX 10000 Series Switch. The Aruba CX 10000 Series Switch with Pensando is a completely new type of switching solution, overcoming the limitations of old designs.

In June 2021, Switch announced the construction of a large-scale data center campus in Texas as its fifth major expansion.

In November 2022, Juniper Networks was selected as the provider for Virtual-Q to create a scalable and automated data center infrastructure. Juniper’s data center solutions will help enhance the client experience by automating and modernizing its network infrastructure.

Category Insights:

Which Application Will Bring Significant Revenue for Data Center Switch Providers?

The application used by cloud-based service providers is expected to generate significant revenue until 2032. This is because cloud-based service providers are increasingly adopting data center switches.

The global expansion of cloud infrastructure and the growing preference for cloud-based services will contribute to the success of this application.

From 2017 to 2021, the cloud-based service providers’ segment showed a Compound Annual Growth Rate (CAGR) of 5.5%. In the next decade, it is projected to continue growing at a CAGR of 4.7% between 2022 and 2032.

Which Type of Data Center Switch Will Stay in High Demand?

According to PMR, there will be a sustained demand for access switches in the market over the next ten years. This is attributed to the increasing use of these switches across various sectors, especially with the robust expansion of the IT and telecom industry.

Access switches provide extensive network connectivity to distribution layers and various end-users, leading to steady market growth. The access switches segment is expected to grow at a 4.6% CAGR between 2022 and 2032, following a 5.3% CAGR from 2017 to 2021.

Although access switches may not be as powerful as core and distribution switches, their importance lies in their role within a multi-layered network. Due to the need for more access switches in such networks, they ensure effective data transfer between different networks, load balancing, and reliable network and server connections.

The demand for access switches will increase due to technological advancements in the IT and telecom industry, including enhanced bandwidth and performance, as well as the expansion of servers and data centers across various sectors.

Country-wise Analysis

How Much Opportunity is There in the United States Data Center Switch Market?

The United States data center switch market is expected to be worth over US$ 7.5 billion by 2032. Between 2022 and 2032, the market in the USA is projected to grow by US$ 2.3 billion.

From 2017 to 2021, the demand for data center switches in the USA increased by 4.2% annually. Over the next ten years, sales of data center switches in the country are expected to grow at a rate of 3.7% annually, according to PMR.

The strong growth in the Banking, Financial Services and Insurance (BFSI) and IT & telecom sectors is a major factor driving the market in the USA. Additionally, the rapid shift towards using cloud-based platforms will create a high demand for data center switches.

Many large enterprises and cloud providers in the United States are using data center switches, especially because these end users heavily rely on virtualization.

The presence of numerous data centers and leading data center switch companies will further boost the market in the USA. Several companies based in the USA are actively working to assist end users in managing their operations.

For example, in September 2022, Juniper Networks, a USA-based company, announced the expansion of Apstra Software to provide more versatility and flexibility for data center operations.

How is the Demand for Data Center Switches Shaping up in China?

The China data center switch market is expected to grow at a rate of 5.7% annually between 2022 and 2032. By the end of 2032, data center switch sales in China are projected to generate revenues of US$ 1.9 billion.

From 2017 to 2021, the data center switch industry in China grew at a rate of 7.2% annually. Over the next decade, the market in China is expected to present an absolute opportunity of US$ 831.6 million.

The increasing adoption of cloud-based platforms and connected devices is driving the market in China.

New product launches by leading Chinese companies will contribute to the expansion of the market. Several companies across China are introducing innovative products to boost their sales.

For instance, in July 2022, DCN, a Chinese company, launched a new product called Cloud Stone switch. This switch is designed to address challenges brought by cloud computing, IoT, and 5G.

CS switches, including the CS16900, CS6580, CS6510, and CS6200, offer robust data center capabilities and campus network services, built in accordance with telecom standards.

Key Questions Answered in the Report:

1. What factors contribute to the growth trends in the market?
2. What is the present market size, and how is it anticipated to change in the forthcoming years?
3. What key elements are influencing the market?
4. How is the Industrial Lighting market divided, considering types, fuels, applications, or other relevant factors?
5. Who are the primary participants in the data center switch market?
6. What strategies are these players employing to establish a competitive edge?
7. What factors are driving the expansion of the data center switch market?
8. Which regions are expected to experience notable growth, and what are the reasons behind it?
9. What recent technological advancements are impacting the data center switch industry?

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