The global Data Center Switch Market is estimated to be valued at US$ 16087.09 Mn in 2023 and is expected to exhibit a CAGR of 5.4% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Data center switches are networking devices that connect servers, storage systems and other network components with each other and enable data transmission in data centers. They provide physical and logical connections for data center infrastructure and support applications such as virtualization. Data center switches are available in core, aggregation and edge models to handle different types of network traffic. The growing cloud services and increasing virtualization demand have increased the usage of data center switches.
Market key trends:
The increased adoption of cloud computing services is anticipated to be the major trend that drives the growth of the data center switch market during the forecast period. Rising digitization across industries is resulting in the generation of huge volumes of data that needs to be stored and processed efficiently and cost-effectively. This has led to increasing reliance on cloud-based services and solutions. Data center switches form an important component of cloud infrastructure as they enable the interconnection of servers. Moreover, the increasing shift towards virtualization applications is also propelling the demand for upgraded data center switches with higher port density and performance. Data center switches with capabilities such as Ethernet, InfiniBand, Fibre Channel are increasingly being used as they provide comprehensive switching solutions for complex virtualized environments.
Porter’s Analysis
Threat of new entrants: The threat of new entrants is moderate due to high initial investment cost for research and development. However, new entrants can adopt low-cost alternatives.
Bargaining power of buyers: The bargaining power of buyers is high as data center switches are undifferentiated products and buyers can easily switch to substitutes. This compels companies to offer innovative products at competitive prices.
Bargaining power of suppliers: Being an oligopolistic market, the bargaining power of suppliers is moderate. However, the need for technology innovation limits their bargaining power.
Threat of new substitutes: Threat of new substitutes is low as data center switches have numerous technical advantages over alternatives. However, virtual switches pose a minor threat.
Competitive rivalry: The market witnesses intense competition among key players to improve their product portfolio and service offerings.
Key Takeaways
The Global Data Center Switch Market Size is expected to witness high growth, exhibiting a CAGR of 5.4% over the forecast period between 2023 to 2030, owing to increasing cloud computing and network virtualization across industries.
North America is projected to dominate the market during the forecast period owing to the significant presence of key players, high investment in data center infrastructure by tech giants, and increasing demand for data centers. The Asia Pacific region is expected to grow at the fastest pace on account of rising internet penetration, growing digitalization, and expansion of content providers in countries like India and China.
Key players operating in the data center switch market are Silicom Ltd Connectivity Solutions, Cisco Systems Inc., D-Link Corporation, Arista Networks Inc., Quanta Cloud Technology (Quanta Computer), Juniper Networks Inc., ZTE Corporation, Hewlett Packard Enterprise, Fortinet Inc., NEC Corporation, Mellanox Technologies (NVIDIA), Huawei Technologies Co. Ltd., Dell EMC, H3C Holdings Limited (Hewlett Packard Enterprise), Extreme Networks Inc., and Lenovo Group Limited. These players are focusing on new product launches and partnerships to gain a competitive advantage in the market.
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