; Data center networking market size, share, forecast

Data Center Networking Market

Data Center Networking Market Size, Share, and Analysis, By Component (Solution and Services), By Product (Ethernet Switches, Storage Area Network, Routers, and Others), By Vertical (BFSI, IT and Telecom, Healthcare, Retail, Government, and Other), and By Region (North America, Europe, Asia-Pacific, And Rest of the World) And Regional Forecast 2024-2034

Published on: Jan-2024
Report Code: FG ICT 01839
No. of Pages: 170-350
Report Format: PDF

Data Center Networking Market is anticipated to exhibit a Compound Annual Growth Rate (CAGR) of 11.9% during the forecast span from 2024 to 2034. In 2023, the market size was assessed at USD 24.9 billion and is projected to reach USD 86 billion by the completion of 2034.

Product Overview

Data center networking refers to the architecture and technologies that enable efficient data communication and management in a data center. It involves connecting servers, storage systems, and networking devices to provide uninterrupted information exchange and accessibility. Hardware including switches, routers, and firewalls are essential for managing the large amount of traffic and data processing requirements. Moreover, the objective of data center networking is to provide a strong and scalable network architecture that can accommodate the storage and distribution requirements of modern services. Consequently, effective resource management, low latency, and improved performance are essential components of data center networking that support cloud services, web apps, and other digital platforms.

Market Highlights

Data Center Networking Market is projected to grow at a compound annual growth rate (CAGR) of 11.9% from 2024 to 2034

Data center networking market is expected to reach USD 86 billion over the forecast period, due to the growing demand for scalable and efficient infrastructure to support the expanding domain of digital transformation. The rise in the adoption of cloud computing, IoT, and AI applications has attracted large investments in modern data center networking solutions. Important developments including the adoption of software-defined networking (SDN), intent-based networking, and the switch to high-speed technologies such as 5G, are contributing to the market growth. Additionally, the popularity of edge computing and hyper-converged infrastructure (HCI) is growing as businesses seek decentralized data processing capabilities to meet their requirements. Leading market players are prioritizing innovations such as network virtualization and automation to improve agility and reduce operational difficulties. Therefore, due to increased cybersecurity concerns, there is a growing focus on integrating strong safety precautions into data center networks, which drive investments in threat detection and prevention systems.

Source: Fatpos Global

Data Center Networking Market Segmentation

Solution segment will lead due to its usage for the protection and improvements in data center networking

Based on Component, the Data Center Networking Market is segmented into Solution and Services. The solution segment dominates the market due to its wide usage and benefits it provide, along with the focus on energy efficiency. Organizations are prioritizing solutions that can guarantee the security of networks and contribute in improving the operational efficiency. Additionally, the importance of data center networking solutions in managing energy utilization perfectly aligns with the increasing focus on environmental sustainability. Moreover, the surge in edge computing and the prevalence of cloud data centers have significantly boosted the demand for data center networking solutions. Edge computing requires low-latency, high-bandwidth connectivity between edge devices and data centers. Therefore, the dominance of the solution segment highlights the significance of efficient data center networking solutions in the evolving digital infrastructure.

IT and Telecom segments will lead owing to the widespread adoption of data center networking in the IT and telecom sectors

By Vertical, Data Center Networking Market is divided into BFSI, IT and Telecom, Healthcare, Retail, Government, and Others. The dominance of the IT and telecom segment is due to the importance of reliable network infrastructure for IT companies and telecom operators. This growth is attributed to the growing demand for online services in banking, which requires secure data center networking solutions to manage increasing data traffic. Additionally, data center networking is essential in implementing strong security measures, addressing concerns related to firewalls, encryption, and regulatory standards. Furthermore, the Healthcare segment is expecting significant growth due to the increasing applications of data center networking in healthcare organizations, which highlights efficient data management and processing.

Source: Fatpos Global

Market Dynamics

Growth Drivers

Growing Demand for Cloud Services to Provide Opportunities for Growth

Continuous surge in the demand for cloud services is an essential driver for the growth of data centre networking market. Businesses across the world are embracing cloud-based infrastructures to improve their scalability and operational efficiency. This shift requires advanced data center networking solutions which are capable of supporting dynamic requirements of cloud services . Additionally, the market benefits as companies seek strong and high-performance networking infrastructures to ensure ideal functionality for cloud-based applications, data storage, and computing resources. Hence, this development is expected to continue during the forecast period as cloud adoption will likely rise across diverse industry sectors.

Networking Technologies Will Rapidly Advance, Creating Growth Opportunities

Modern innovations in networking technologies, such as software-defined networking (SDN), network virtualization, and edge computing, are responsible to push the growth of data centre networking market. These improvements provide increased flexibility and enhanced performance in data center networks, which address the evolving needs of modern applications and services. Furthermore, the market thrives on the adaptability of these technologies to improve efficiency, reduce latency, and optimize resource utilization within data center ecosystem. Therefore, as organizations prioritize digital transformation, the integration of advanced networking technologies remains a key growth driver for sustained market growth.


Expensive Initial Investment Costs Could Limit Industry Development

High initial investment costs are a substantial barrier to the unquestionable growth potential of data center networking market. The implementation and maintenance of modern networking infrastructures requires significant financial capital for the purchase of advanced machinery, strong security protocols, and qualified workers. This financial barrier makes it difficult for smaller firms and organizations with limited finances to penetrate the market or expand their existing data center operations. Thus, striking a balance between technological innovation and cost-effectiveness becomes critical for overcoming this constraint and promoting greater market accessibility.

Recent Developments

  • Cisco Systems Inc., a renowned software business, announced the debut of a full-stack observability platform in June 2023. This new product combines data from several sectors such as networking, application, and others.
  • Edgecore Networks Corporation, a Taiwan-based provider of open networking equipment and solutions, will launch the EPS200 Series in December 2022, an open network solution specifically designed and produced for corporations in data center networking architecture. It connects servers, storage devices, and network switches all housed in a rack.
  • Arista Networks, Inc. unveiled eight high-end data center switches in December 2022 that are specially developed and manufactured to match the needs of individual companies, supporting up to 800G bandwidth. Three additional switches were added to the current 7060X5 series, while the other five were added to the 7050X4 data-center leaf switches.
  • Nokia will work with Korea Internet Neutral eXchange (KNIX), a supplier of data centers and international/domestic transit services, in December 2022. Nokia will deliver a re-configurable optical add-drop multiplexer (ROADM) solution as part of the agreement, allowing KINX to provide dependable services to its end consumers. The KINX network will also be built on Nokia's 1830 Photonic Service Switch platforms.

Data Center Networking Market

Key Players:

Regional Analysis

Data Center Networking Market is segmented based on regional analysis into five key regions: North America, Latin America, Europe, Asia Pacific and the Middle East and Africa. North America's leadership in the data center networking market stems from its technological innovation, resilient IT infrastructure, and vast digitalization across various sectors. The region stands as a global hub for revolutionary innovations, with companies such as Cisco Systems continuously shaping the industry. The solid IT infrastructure, combined with high-speed internet access and significant 5G investments, allows for effective data center operations. Additionally, North American industries, including finance and healthcare, have adopted digitalization, which has created increased demand for advanced data center networking solutions. Moreover, recent instances including the COVID-19 pandemic highlighted the essential role of data center networking in providing remote work and online services across the North America region, reinforcing its dominance.

Simultaneously, the rise of Asia Pacific data center networking market is propelled by rapid technological adoption and an expanding digital economy. For instance, China is experiencing substantial developments in e-commerce and cloud computing, which reflects a growing demand for resilient data center networking solutions. Furthermore, prominent organizations like Alibaba Cloud and Tencent Cloud are making major investments in data center infrastructure, which highlights the region's crucial role on the global stage. The emergence of 5G technology across the Asia Pacific region further requires advanced networking capabilities across diverse industries, solidifying the region as an important player in the evolving scenario of data center networking.

Source: Fatpos Global

Impact of Covid-19 on Data Center Networking Market

COVID-19 pandemic exerted a profound impact on the data center networking market. The unexpected rise in remote work, digital learning, and online services escalated the demand for scalable and efficient data center networking solutions. This surge encouraged the adoption of cloud services and emphasized the essential role of data center networking in ensuring secure networks. Moreover, challenges in the supply chain disrupted the availability of hardware and impacted the market growth. The pandemic also renewed focus on cybersecurity and highlighted the necessity for reliable security measures in data center networking. Thus, while some organizations faced project delays due to financial uncertainties, others companies accelerated their digital transformation initiatives to meet the evolving demands of a changing business landscape during the pandemic.

Data Center Networking Market is further segmented by region into:

  • North America Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – United States and Canada
  • Latin America Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – Mexico, Argentina, Brazil, and Rest of Latin America
  • Europe Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – United Kingdom, France, Germany, Italy, Spain, Belgium, Hungary, Luxembourg, Netherlands, Poland, NORDIC, Russia, Turkey, and Rest of Europe
  • Asia Pacific Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – India, China, South Korea, Japan, Malaysia, Indonesia, New Zealand, Australia, and Rest of APAC
  • Middle East and Africa Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – North Africa, Israel, GCC, South Africa, and Rest of MENA

Data Center Networking Market Scope and Segments:



Study Period


Base Year


Forecast Period


Historical Period


Growth Rate

CAGR of 11.9% from 2024-2034


Value (USD Billion)


Main Segments List

By Component

  • Solution
  • Services

By Product

  • Ethernet Switches
  • Storage Area Network
  • Routers
  • Others

By Vertical

  • BFSI
  • IT and Telecom
  • Healthcare
  • Retail
  • Government
  • Other

By Region

  • North America
    • U.S.
    • Canada
  • Europe
    • Germany
    • U.K.
    • France
    • Rest of Europe
  • Asia Pacific
    • China
    • Japan
    • India
    • Australia
    • Southeast Asia
    • Rest of Asia Pacific
  • Latin America
    • Brazil
    • Mexico
    • Rest of Latin America
  • Middle East & Africa
    • GCC
    • South Africa
    • Rest of Middle East & Africa

Frequently Asked Questions (FAQ):

Data Center Networking Market size was values at USD 24.9 billion in 2023 and is projected to reach the value of USD 86 billion in 2034, exhibiting a CAGR of 11.9% during the forecast period.

The Data Center Networking Market focuses on providing networking solutions and services tailored for data centers. It caters to the demand for efficient and secure networking infrastructure to support digital services, cloud computing, and data-intensive applications across various industries.

The Solution segment and the IT and Telecom segment accounted for the largest Data Center Networking Market share.

Key players in the Data Center Networking Market include Cisco Systems, Inc., Arista Networks, Inc., Juniper Networks, Inc., Hewlett Packard Enterprise (HPE), Dell Technologies, Inc., Broadcom Inc., Extreme Networks, Inc., Mellanox Technologies, VMware, Inc., Huawei Technologies Co., Ltd., IBM Corporation, Intel Corporation, F5 Networks, Inc., Citrix Systems, Inc., Fortinet, Inc., and Other Prominent Players.

Growing demand for cloud services and advancements in networking technologies are the factors driving the data center networking market.

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