Data Center Networking Market Size, Share & Trends Analysis growing at a CAGR of 15.2% from 2024 to 2030
The global data center networking market size was valued at USD 34.22 billion in 2023 and is projected to grow at a CAGR of 15.2% from 2024 to 2030. The increased adoption of advanced data center operating models and virtualization drives market growth. A few other factors driving growth for this industry include increasing real-time engagement with users and enhancing ‘on-demand’ services in different industries. Furthermore, the increasing use of cloud computing services across various sectors necessitates the expansion of data center networks.
Request a free sample copy or view report summary: https://www.grandviewresearch.com/industry-analysis/data-center-networking-market/request/rs1
The growth of data center networks is primarily influenced by increasing requirements for advanced technology solutions by businesses, consumers, and governments and unceasing growth in demand for high-speed internet. Data centers are the key component of digital infrastructure. Often, the data centers are located at particular points known as Internet exchange points (IxPs). This is where other organizations, content delivery networks, and major internet service providers connect.
With the increasing adoption of technologies such as connected devices, smartphone-driven applications, and others, users anticipate quicker data retrieval, streaming options, and real-time applications, necessitating strong and effective data center networks to manage heightened traffic. Increasing dependence of businesses, services, supply chains, operations, and government authorities on high-speed internet is also expected to drive demand for the data center services market.
In recent years, numerous organizations have started expanding and transforming the business operations and multiple key functions into digital infrastructure. This has resulted in rising demand for data storage and data protection solutions. Growing dependability on data collection, data analytics, data-driven strategic decisions, and data management has led to a rise in demand for data center network services.
Component Insights
Based on components, the hardware segment dominated the global market for data center networking and accounted for a revenue share of 53.3% in 2023. Some of the significant hardware associated with the data center networking market include an Ethernet switch, router, Storage Area Network (SAN), network security equipment, Application Delivery Controller (ADC), and others. The hardware component of data centers plays a vital role in offering large storage capacity, better scalability, and productivity compared to software. The hardware also contributes to managing network devices, physical servers, and storage devices through monitoring, tracking, troubleshooting, and diagnosing.
The services segment is expected to experience the fastest CAGR during the forecast period. Aspects such as the growing adoption of cloud computing technology, increasing demand and adoption of modern technologies such as artificial intelligence and machine learning, and rising market penetration of Internet of Things technology primarily drive growth of this segment. The operational costs associated with data storage and data protection usually involve costs linked with power consumption, cooling systems, regular maintenance, and more. Businesses prefer to avail themselves of data center networking services instead of developing their storage and continuously spending more of their business funds on protection and management. This is expected to increase demand for the service segment in the approaching years.
