The global data center networking market was valued at USD 23.8 billion in 2023 and is projected to be worth USD 68.7 billion by the end of 2032, according to recent report by Global Market Insights Inc.

The data center networking market is projected to grow at over 13% CAGR during 2024-2032, as cloud-based services demand significant bandwidth to ensure a seamless user experience. Data center networking offers the high-speed connectivity essential for these bandwidth-heavy applications, adeptly managing the rising traffic volumes from cloud services. For example, in 2023, projections indicated over 30 billion IoT devices would be globally networked. Furthermore, escalating data security concerns within the IT sector present lucrative growth avenues for the data center networking domain.

A notable trend is the surging adoption of optical networking technologies. Events like the Optical Fiber Communications Conference and Exhibition (OFC 2024) underscore advancements in optical communications. Industry leaders, including Cisco, Ciena, and Juniper Networks, are prominently showcasing these technologies, emphasizing their potential to boost efficiency and performance. Another significant trend is the melding of Software-Defined Networking (SDN) with Network Function Virtualization (NFV). These innovations promise a more flexible, scalable, and automated approach to network management, adeptly navigating the complexities of modern data center environments.

The Global Data Center Networking Industry is classified based on component, application, network, organization and region.

Increasing demand for IT & telecom

The market segments applications into colocation, BFSI, energy, government, healthcare, manufacturing, and IT & telecom. In 2023, the IT & telecom sector commanded over 26% of the market share and is set for notable growth through 2032. Within IT and telecom, data center networking is pivotal for streamlining data flow across vast networks. It not only ensures rapid data transmission and supports cloud services but also optimizes data storage and retrieval. This technology is foundational for vital services like virtualization and disaster recovery, empowering businesses to scale, boost reliability, and elevate service delivery.

Rising adoption in hardware sector

Segmented by components, the data center networking market divides into hardware and services. In 2023, the hardware segment dominated with a 77% market share. Core components of data center networking encompass high-capacity switches, sophisticated routers, and network fabrics, all engineered to manage vast data loads with minimal latency. These elements are crucial for ensuring data center connectivity, scalability, and security. Technologies like SDN and NFV further enhance flexibility and automate network oversight.

North America to emerge as a lucrative market

North America Data Center Networking Industry commanded a dominant 39% share, with projections indicating significant expansion through 2032. This growth can be attributed to the region’s advanced IT infrastructure, hefty investments in data center expansions, and a pronounced adoption of cloud technologies. Bolstered by a robust IT ecosystem and a concentration of tech giants, the region is at the forefront of driving innovation and demand. Furthermore, North America’s established ecosystem boasts extensive fiber networks and high-capacity data centers, largely fueled by major cloud service providers.

Leading Key Players

Major players operating in the data center networking market are Robert Bosch GmbH, Continental AG, Autoliv Inc., Nissin Kogyo Co., Ltd., WABCO Holdings Inc., Hitachi Automotive Systems, Ltd., ZF Friedrichshafen AG, Denso Corporation, Haldex AB, Hyundai Mobis, Advics Co. Ltd., Aisin Seiki, Mando Corporation.

Source – https://www.gminsights.com/industry-analysis/data-center-networking-market