Global Data Center Networking Market: Snapshot
The adoption of data center virtualization and cloud computing has been identified as one of the key driving factors for the global data center networking market. In 2016, the global data center networking market was valued at US$ 63.05 Bn and is expected to reach US$ 228.40 Bn by 2025, expanding at a CAGR of 15.5% during the forecast period.
Organizations are becoming more dependent on services provided by data centers with each passing day. As an advanced delivery system of advertising, communications, products, news and services via internet, data centers are gaining in popularity. With the help of hyperscale data centers, which give data center infrastructure on lease, businesses are able to reduce the total cost of ownership (TCO) if not eliminate them completely for organizations. This helps in reducing expenditure on building and maintaining data center infrastructures. The task is instead achieved by data centers, equipped with various data center networking products. These centers are engaged in improving service delivery and risk management for organizations.
According to Transparency Market Research (TMR), the global data center networking market is likely to exhibit a CAGR of 15.5% between 2017 and 2025. At this pace, the market’s valuation is forecast to reach US$228.40 bn by the end of 2025, from US$63.05 bn in 2016.
Demand for Software Components to Rise at High Pace
Based on component, the global data center networking market has been segmented into hardware, software, and services. Of these, the hardware component emerged dominant in 2016 contributing nearly 52% of the overall market based on revenue. However, exhibiting a CAGR of more than other components, the software segment is forecast to emerge as the most lucrative one in the forecast period. This is primarily attributed to the rising digitization and growing adoption of cloud computing technologies in data centers. In addition, the services segment which held approximately 28% of market share in 2016 is expected to hold a noteworthy market revenue share in 2025.
Based on industry vertical, the global data center networking market can be segmented into BFSI, education, healthcare, media and entertainment, government, telecommunications, retail, and others. Of these, holding over 21% of the market, the BFSI segment emerged as the lead in 2016. TMR forecasts this segment to continue leading the market through the course of the forecast period. Besides this, the demand for data center networking is forecast to rise considerably in the healthcare sector.
Asia Pacific to Exhibit Most Lucrative Opportunities in Forthcoming Years
Regionally, North America, Asia Pacific, Europe, South America, and the Middle East and Africa constitute the key market segments. Among these regions North America emerged dominant in the global data center networking market in 2016. However, during the course of the forecast period Asia Pacific is expected to showcase the highest CAGR of 17.3% between 2017 and 2025. The Asia Pacific data center networking market is chiefly gaining from easy availability to connecting devices such as tablets and smartphones. Besides this economic growth witnessed across emerging nations such as India and China is expected to aid the market’s expansion in the region. Furthermore, the region exhibits a developing IT infrastructure, which help supporting outsourced activities of foreign companies efficiently. Spurred by these factors the demand for data center networking is expected to increase considerably in Asia Pacific in the forthcoming years.
The global data center networking is very competitive owing to the high demand of networking components. The key market players profiled in this report are Cisco Systems, Inc., Hewlett Packard Enterprise, Arista Networks, Juniper Networks, Microsoft Corporation, Huawei Technologies Co. Ltd., Dell Inc., Avaya Inc., Extreme Networks Inc. and Brocade networking solutions.