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Data Center Networking Equipment Market Report
Data Center Networking Equipment Market Size, Share, Trend, Forecast, Competitive Analysis, and Growth Opportunity: 2024-2032
The data center networking equipment market was estimated at USD 24.3 billion in 2024 and is likely to grow at a CAGR of 14.9% during 2024-2032 to reach USD 74.0 billion in 2032.
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The data center network equipment market holds a significant function in facilitating increased demand for storage of data, cloud computing, and digital services. The market includes a diversified set of devices such as routers, switches, firewalls, servers, cables, routers, load balancers, and application delivery controllers (ADCs) that make it possible for communication between the servers and the rest of the IT infrastructure in a data center. With the fast deployment of technologies such as AI, 5G, and edge computing, data centers are under growing pressure to provide high-speed, low-latency connectivity. Consequently, the market is moving towards sophisticated networking solutions, such as software-defined networking (SDN) and high-performance Ethernet. Market leaders like Cisco, Juniper Networks, Arista Networks, and Huawei are spearheading innovation to address these changing needs. The expansion of hyperscale data centers and cloud service providers further drives the pace of demand for scalable, efficient, and secure networking devices.
The data center networking equipment market is experiencing rapid growth due to the explosion of data from cloud computing, IoT devices, and AI-driven workloads. These technologies require robust, scalable, and high-speed networking infrastructure to handle the vast amount of data being transmitted and processed. The increasing demand for real-time data access and seamless connectivity is pushing enterprises to upgrade their networks. Additionally, the rise in remote work and digital services has led organizations to invest in advanced networking solutions to ensure consistent performance, reliability, and secure data transmission across their operations. Another key set of drivers includes the expansion of hyperscale data centers and the growing use of virtualization and software-defined networking (SDN) technologies. These innovations help improve network agility and reduce operational costs, making them attractive to enterprises. Moreover, the rollout of 5G and the rise of edge computing require ultra-low latency and faster data routing, boosting the need for next-generation networking equipment. As companies prioritize digital transformation and stronger cybersecurity frameworks, the demand for more intelligent, adaptive, and secure data center networks continues to rise significantly.
Market Challenges
The market for data center networking equipment encounters various challenges, including large initial costs and running expenses can discourage small businesses from implementing sophisticated solutions. Evolving technologies demand frequent upgrades, adding complexity and maintenance costs. Moreover, the compatibility of old systems with new technologies creates integration challenges. Security issues regarding data breaches and network vulnerabilities add more complexity to deployment. Last but not least, supply chain disruptions and component shortages can affect equipment availability and deter data center growth plans.
Recent Market JVs and Acquisitions:
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Segmentations |
List of Sub-Segments |
Segments with High-Growth Opportunity |
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Equipment-Type Analysis |
Switches, Servers, Routers & Gateways, Security Appliances, Load balancers, Cables, and Others. |
Security Appliances are expected to be the fastest-growing category for the Data Center Networking Equipment Market. |
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Data Center-Type Analysis |
Enterprise, Colocation, Hyperscale, and Edge. |
Hyperscale data centers are expected to hold the largest share of the Data Center Networking Equipment Market in the coming years. |
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Region Analysis |
North America, Europe, Asia-Pacific, and The Rest of the World |
Asia-Pacific is expected to experience the fastest growth over the forecast period. |
“Security appliances are set to be the fastest-growing category of the data center networking equipment market, driven by rising cyber threats and increasing demand for robust data protection.”
Security Appliances are projected to be the most rapidly expanding category of the data center networking equipment market owing to growing cyberattacks, mounting data breaches, and more stringent regulatory demands. As data centers process more sensitive data, companies are focusing on secure infrastructure, such as firewalls, intrusion prevention systems (IPS), and unified threat management (UTM). The increasing use of cloud computing and remote workplaces further fuels the need for more sophisticated, scalable, and AI-based security products, making this segment a high-priority area of investment.
“Hyperscale data centers are poised to dominate the data center networking equipment market in the coming years, fueled by soaring data demand and cloud-driven expansion.”
Hyperscale data centers are set to dominate the data center networking equipment market because of their fast growth and increasing capacity requirements. In early 2024, hyperscale data centers totaled more than 1,000, with an estimated 120 to 130 new centers being added each year in the coming decade. This expansion is mainly prompted by growing AI technology adoption, which requires more capable networking infrastructures. Therefore, hyperscale data centers will be responsible for a large share of the market's demand for high-end networking gear.
“The spine-leaf 2-tier architecture is set to lead the data center networking equipment market, owing to its superior scalability, efficiency, and low-latency performance.”
The spine-leaf two-tier design is fast becoming the top data center networking choice due to its high scalability, low latency, and operational efficiency. Unlike the traditional three-tier design, this design has only two layers: spine and leaf switches. Each leaf switch is connected to all spine switches, providing consistent and predictable latency across the network. This design mitigates bottlenecks and enhances redundancy through the provision of multiple paths for data between nodes. Its ability to effectively deal with high levels of east-west traffic, common in data centers today, also spurs its adoption. Generally, the spine-leaf architecture's advantages in traffic load handling, delay reduction, and scalable expansion make it the leading paradigm for future data center networking infrastructure.
“Blade servers are projected to not only capture the largest market share but also emerge as the fastest-growing category of the data center networking equipment market, driven by their space efficiency and high-performance capabilities.”
Blade servers are expected to dominate the data center networking equipment market due to their compact design, high processing power, and energy efficiency. Notably, blade servers occupy up to eight times less space than traditional rack-mounted servers, making them ideal for high-density computing environments. Their modular structure allows for easy scalability and centralized management, streamlining IT operations and reducing downtime. Blade servers are especially effective for virtualization and cloud computing, where efficient workload consolidation is essential. As data centers increasingly adopt AI and machine learning technologies, the demand for powerful, scalable infrastructure continues to rise, making it necessary that blade servers are well-equipped to meet. These benefits position blade servers as both a leading and fastest-growing segment in the data center networking equipment market.
“Asia-Pacific is poised to be the fastest-growing region in the data center networking equipment market, fueled by rapid digital transformation and surging demand for advanced IT infrastructure.”
The Asia-Pacific market is set to dominate the data center networking equipment market growth on account of some of the important drivers. Quick digitalization in nations such as China, India, and Japan has hugely spurred the demand for secure data infrastructure. The ubiquitous usage of cloud computing, Internet of Things (IoT), and artificial intelligence (AI) technologies further accentuates this requirement. Moreover, the rollout of 5G networks improves connectivity, which necessitates sophisticated networking solutions. Regional governments are strongly backing this growth with supportive policies and investments in digital infrastructure. In addition, the emergence of data localization legislations in nations like Malaysia, Indonesia, and Vietnam requires data to be stored locally, necessitating the setup of additional data centers. These combined factors place Asia-Pacific as the fastest-growing data center networking equipment market.
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The market is consolidated, with around 50 players. Most of the major players compete in some of the governing factors, including price, product offerings, regional presence, etc. The following are the key players in the data center networking equipment market. Some of the major players provide a complete range of products,
Here is the list of the Top Players (Based on Dominance)
Note: The above list does not necessarily include all the top players in the market.
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This report provides market intelligence most comprehensively. The report structure has been kept so that it offers maximum business value. It provides critical insights into market dynamics and will enable strategic decision-making for existing market players as well as those willing to enter the market. The following are the key features of the report:
The data center networking equipment market is segmented into the following categories:
Data Center Networking Equipment Market, by Equipment Type
Data Center Networking Equipment Market, by Data Center Type
Data Center Networking Equipment Market by Region
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Networking hardware describes the devices employed to link computers, servers, and other network devices. Some examples are switches, routers, firewalls, access points, and cables, facilitating communication and data exchange between systems.
The forecasted value of the data center networking equipment market is US$ 74.0 billion in 2032.
The data center networking equipment market is projected to grow at a CAGR of 14.9% by 2032, led by the increasing adoption of cloud computing, AI, and machine learning, growing data traffic, fast digitalization, and the need for scalable, low-energy networking infrastructure. Also, the growth in hyperscale data centers and the introduction of cutting-edge technologies such as 5G and edge computing are propelling the demand for robust and high-performance networking solutions.
The Asia-Pacific region is witnessing the fastest growth in data center networking gear due to fast-paced digitalization, heightened internet penetration, and huge investment in IT infrastructure in China, India, and Japan.
CISCO Systems, Arista Networks Inc., Huawei Technologies Co. Ltd., H3C Technologies Co. Ltd., Juniper Networks, and DELL Technologies are the leading players in the Data Center Networking Equipment Market.
In the market for data center networking hardware, the hardware segment, specifically Ethernet switches, is the market leader. This is attributable to the critical role of Ethernet switches in handling high-speed data transfer in data centers. Furthermore, the demand for high-performance networking hardware such as routers and other key components is rising to support growing data traffic and digital infrastructure growth, which also contributes to the dominant market position of the hardware segment.
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