Data Center Switch Market

Market Study on Data Center Switches: Applications of Data Center Switches in Cloud-based Service Provider Sector to Pave the Way for New Opportunities

Data Center Switch Market by Switch Type (Core Switches, Distribution Switches and Access Switches)

Report ID: PMRREP33362

Number of Pages: 250

Format: PPT*, PDF, EXCEL

Industry: Semiconductor Electronics

Published Date: March-2023

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Data Center Switch Market Outlook (2022 to 2032)

Global sales of Data Center Switches in 2021 totaled a valuation of US$ 13.8 billion. Over the next ten years, worldwide data center switches demand is set to rise at 4.8% CAGR. At the end of 2032, the global data center switch market size will reach around US$ 23.2 billion.

In 2022, the market valuation reached about US$ 14.6 billion. Cloud-based service providers segment is forecast to expand at 4.7% from 2022 to 2032. Hence, it will remain the top revenue-generation segment in the market.

  • Rapid transition towards cloud-based services will spur market expansion
  • Increasing number of data centers will propel data center switch demand
  • High penetration of connected devices and advanced technologies such as IoT and AI will spur growth
  • Growing need for simplified networking communication management and automation to elevate demand
  • Rising data volumes across enterprises due to high adoption of novel technologies will create growth prospects
  • Increasing adoption of cloud computing globally to bolster data center switch sales.

With data center networking becoming more disaggregated, data center switches are gaining wider popularity. These switches are designed to support data and storage for critical applications.

The high-performance switches designed for cloud providers and big enterprises that rely on virtualization are called data center switches. These switches can be deployed throughout the data center. They support high-bandwidth interconnections using both SAN protocols and Ethernet protocols.

A data center switch acts as a multiport network bridge that receives, processes, and routes data from one destination to another. Growing demand for efficient, reliable, and high-performance switching solutions is likely to boost sales.

Data centers have significantly increased in number during the last few years. The design of data centers is evolving, with an increased emphasis on providing integrated nodes, faster bandwidth, and more intelligent data center architecture.

One of the key factors driving the growth of data centers throughout the world is the rising need for storage solutions brought on by Big Data and other computing and analytics platforms. A significant amount of data has been produced as a result of the adoption of the Internet of Things.

Business analytics, scientific computing, financial transactions, social networking sites, and search engines are just a few examples of the growing number of big data applications. All of these apps work with enormous datasets and demand an IT infrastructure with great speed to analyze data quickly. This will in turn continue to foster data center switch sales.

North America is forecast to remain the leading data center switch market throughout the projection period. Growing need for data center switches in the IT and telecom sector is driving North America market.

Presence of leading data center switches companies such as Dell EMC is also fostering market expansion in the region. As per PMR, North America will hold around 41.3% share of the global market by 2032.

Attributes Key Insights
Global Data Center Switch Market Estimated Size (2022) US$ 14.6 billion
Projected Market Size (2032) US$ 23.2 billion
Value-based CAGR (2022 to 2032) 4.8%
USA Market CAGR (2022 to 2032) 3.7%
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2017 to 2021 Data Center Switch Sales Outlook Compared to Demand Forecast from 2022 to 2032

As per Persistence Market Research, global sales of data center switches increased at 5.7% CAGR from 2017 to 2021. For the next ten years, data center switch demand is forecast to rise at 4.8% CAGR. The global market for data center switches will create an absolute $ opportunity of around US$ 8.6 billion by 2032.

Growing adoption of data center switches by cloud-based service providers and IT & telecom companies will boost the global market. Expansion of the semiconductor sector and rise in cloud computing will elevate data center switch demand

Further, increasing number of data centers and focus on improving security are likely to bolster data center switch sales over the next ten years.

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Which are the Factors Restraining the Data Center Switch Demand Worldwide?

Organizations are increasingly implementing virtualization in their Data Centers. In a data center, virtualization helps minimize hardware problems and makes moving virtual computers simple.

Virtualization makes it possible to plan capacity and provide resources, consolidate data to reduce space, deliver new servers more quickly, increase manageability, and make the most use of available resources.

Interconnect technologies are virtualizing along with rising virtualization. Virtual switches operating on the same servers are increasingly handling connections between various servers, which might reduce the need for switches over improved servers that provide upstream core connectivity cross-connects in optics.

This will eventually route the traffic depending on the server's directional instructions and guarantee that the server decides the precise packet and quantity that must be transmitted. As a result, these interconnect technologies might restrain expansion of the worldwide data center switch industry.

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Country-wise Analysis

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

The United States data center switch market is set to surpass a valuation of US$ 7.5 billion by 2032. Between 2022 and 2032, the USA market will generate an absolute $ growth of US$ 2.3 billion.

Data center switch demand in the USA grew at a CAGR of 4.2% from 2017 to 2021. Over the next ten years, data center switch sales in the country will rise at 3.7% CAGR as per PMR.

Robust growth of BFSI and IT & telecom sectors is a key factor driving the USA market. Similarly, rapid shift towards cloud-based platforms will create high demand for data center switches.

Several large enterprises and cloud providers across the United States are using data center switches. This is because these end users rely heavily on virtualization.

Rise in data centers and heavy presence of leading data center switch companies will further boost the USA market. Various USA-based companies are putting efforts to help end users in managing their operations.

For instance, in September 2022, Juniper Networks, a United states of America-based company announced Expanding Apstra Software to provide more versatility and flexibility for data center operations.

Enterprise, service provider and cloud provider clients of Juniper are now able to manage and automate their data center operations independent of the architecture and protocols being utilized.

How is the Data Center Switch Demand in China Shaping?

China data center switch market is likely to accelerate at 5.7% CAGR between 2022 and 2032. Data center switch sales in China are set to generate revenues of US$ 1.9 billion by the end of 2032.

The data center switch industry in China has grown at a CAGR of 7.2% from 2017 to 2021. Over the next decade, China market will generate an absolute $ opportunity of US$ 831.6 million.

Increasing penetration of cloud-based platforms & connected devices is driving China market.

New product launches by leading China-based companies will spur market expansion. Several companies across China are introducing novel products to increase their sales.

For instance, in July 2022, DCN, a Chinese company launched a new product named Cloud Stone switch. This switch will help to overcome challenges brought by cloud computing, IoT, and 5G.

Rich data center capabilities and campus network services are supported by CS switches, including the CS16900, CS6580, CS6510, and CS6200, which are also built in accordance with telecom standards.

Category-wise Insights:

Which Application will Create Significant Revenue for Data Center Switch Providers?

Cloud-based service providers’ application is likely to generate lucrative revenues through 2032. This is due to rising adoption of data center switches by cloud-based services providers.

Further, expansion of cloud infrastructure worldwide and shift towards cloud-based services will boost the target segment.

Cloud-based service providers segment exhibited a CAGR of 5.5% from 2017 to 2021. Over the next ten years, this segment will rise at 4.7% CAGR between 2022 and 2032.

Which Type of Data Center Switch will Remain Highly Sought-After?

As per PMR, demand in the market will remain high for access switches over the next ten years. This is due to rising usage of these switches across various sectors. Robust expansion of the IT and telecom sector is also fueling the demand.

Due to the vast network connectivity that these switches provide to distribution layers as well as various end users, the access switch market will exhibit steady growth. Access switches segment is likely to accelerate at 4.6% CAGR between 2022 and 2032. From 2017 to 2021, the target segment expanded at 5.3% CAGR.

Access switches are not powerful switches, but compared to core and distribution switches, a multi-layered network requires a lot more access switches. To transfer data from one network to another and balance the load, access switches require more ports. Thus, these switches guarantee network and server connection.

Demand for access switches will rise as a result of technological advancements in the IT & telecom industry, including increased bandwidth and performance as well as the expansion of servers and data centers across various sectors.

Competitive Landscape:

Prominent data center switch manufacturers are introducing novel solutions in the market. Besides this, they are employing strategies such as mergers, partnerships, and acquisitions to expand their presence.

Recent Developments:

  • In October 2021, the CX 10000 Series Switch was introduced by Aruba. To get beyond the drawbacks of old designs, the Aruba CX 10000 Series Switch with Pensando offers a completely new class of switching solutions.
  • In June 2021, Switch announced the construction of an Exascale data center campus in Texas as its fifth prime expansion.
  • In November 2022, Juniper Networks was chosen as the provider for Virtual-Q for scalable, automated data center infrastructure. Data center solutions provided by Juniper will help to create a scalable and smooth client experience by automating and modernizing its network infrastructure.

Scope of the Report:

Attribute Details
Estimated Market Size (2022) US$ 14.6 billion
Projected Market Size (2032) US$ 23.2 billion
Anticipated Growth Rate (2022 to 2032) 4.8% CAGR
Forecast Period 2022 to 2032
Historical Data Available for 2017 to 2021
Market Analysis
  • US$ Million for Value
  • MT for Volume
Key Regions Covered
  • North America
  • Latin America
  • Europe
  • Asia Pacific
  • The Middle East & Africa
Key Countries Covered
  • United States
  • Canada
  • Brazil
  • Mexico
  • Germany
  • United Kingdom
  • France
  • Italy
  • Spain
  • Nordic
  • Russia
  • Poland
  • China
  • India
  • Thailand
  • Indonesia
  • Australia
  • New Zealand
  • Japan
  • GCC countries
  • North Africa
  • South Africa
  • Others.
Key Segments Covered
  • Application
  • Technology
  • Port Speed
  • Switch Type
  • Region
Key Companies Profiled
  • Cisco Systems Inc.
  • Arista Networks Inc.
  • Juniper Networks Inc.
  • Hewlett Packard Enterprise Development LP
  • NEC Corporation.
  • Huawei Technologies Co. Ltd.
  • H3C Holdings Limited
  • Lenovo Group
  • Extreme Networks Inc.
  • Dell EMC
Report Coverage
  • Market Forecast
  • Company Share Analysis
  • Competition Intelligence
  • Drivers Restraints Opportunity Trends Analysis
  • Market Dynamics and Challenges
  • Strategic Growth Initiatives

Data Center Switch Market Segmentation:

By Application:

  • IT and Telecom
  • Government and Defence
  • BFSI
  • Cloud-based Service Providers
  • Manufacturing
  • Media and Entertainment

By Technology:

  • Ethernet
  • InfiniBand

By Port Speed:

  • 10G and Below
  • Above 10G up to 25G
  • Above 25G up to 40G
  • Above 40G up to 100G
  • Above 100G

By Switch Type:

  • Core Switches
  • Distribution Switches
  • Access Switches

By Region:

  • North America
  • Latin America
  • Europe
  • Asia Pacific
  • Middle East and Africa

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Companies Covered in This Report

  • Cisco Systems, Inc.
  • Arista Networks, Inc.
  • Juniper Networks, Inc
  • Hewlett Packard Enterprise Development LP
  • NEC Corporation
  • Huawei Technologies Co., Ltd.
  • H3C Holdings Limited
  • Lenovo Group Limited
  • Extreme Networks Inc
  • Dell EMC

Frequently Asked Questions

The global data center switch market size reached US$ 14.6 billion in 2022 as per PMR.

The global market for data center switches registered a CAGR of 5.7% over the last 4 years.

The worldwide data center switch industry is set to reach US$ 23.2 billion by 2032.

Global data center switches demand is forecast to surge at 4.8% CAGR from 2022 to 2032.

Access switches segment is likely to generate lucrative revenues in the market through 2032.

Data center switch sales in China will increase at around 5.7% CAGR from 2022 to 2032.

The USA market is set to expand at around 3.7% CAGR through 2032.

Date center switch demand in South Korea and Japan is set to rise at 5.2% and 4.2% CAGRs respectively.

The United Kingdom industry is set to expand at 4% CAGR, reaching US$ 1.2 billion by 2032.

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