Japan, Japan, Tue, 08 Mar 2022 05:35:24 / Comserve Inc. / — Data Center Switches market with major country data, industry analysis, size, share, market revenue, top players, developing technologies, trends and forecasts
The data center switch was valued at USD 13.61 billion in 2019, and it is expected to be worth USD 18.44 billion by 2025, registering a CAGR of 5.2%. The data center switch is an evolving technology with a distinct class of switch and network infrastructure. The data center switch is a high performance switch primarily aimed at large enterprises and cloud providers that rely heavily on virtualization. It can be installed throughout the data center or to attach a two-tier (leaf-spine) or single-tier flat or fabric mesh architecture.
– Factors such as the advancement of edge computing, cloud computing, government regulations regarding the location of data centers, huge operational costs of data centers, and advancements in intelligent computing devices are expected to influence many significantly the growth of the global data center switch market.
– The main trend supporting the data center is the cloud and its connection to billions of connected devices such as autonomous vehicles, PCs, virtual reality systems and others. For example, 80% of all enterprise (and mission-critical) workloads will move to the cloud (Oracle’s Cloud Prediction, 2019). Even though the absolute number of files stored in the cloud has increased rapidly, the percentage of files containing sensitive data has also increased, standing at 21% today with a 17% increase over the past two years.
– Globally, with the growing demand for data, the need for data centers is increasing, as major cloud providers are focusing on commissioning numerous data center projects, with large investments. For example, Amazon, a global leader in cloud management, is increasingly investing in building data centers around the world, especially in emerging markets, such as Asia-Pacific. The company plans to invest $1.5 billion to build two data centers in India, primarily for its AWS branch.
– Growing demand for cloud and data traffic from and within data centers is expected to support the market growth over the forecast period. According to Cisco Systems, cloud data center IP traffic is expected to reach 19,509 exabytes per year by 2021, compared to 1,046 exabytes per year for traditional data center traffic.
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– COVID-19 could cause delays in major business transactions, including mergers, acquisitions, and joint ventures that require due diligence. While overall demand for digital services is expected to grow rapidly, the impact of closures and layoffs means that many businesses will experience a slump, cut costs and could declare bankruptcy. Larger data center operators, especially those with very large scale contracts, will be able to cope with this, but smaller companies, operating in one or a few cities with many local customers, might not. which may affect the data center switch market till the end of the pandemic. .
Main market trends
Ethernet technology is expected to drive the market forward
– Ethernet speeds run between 10 Mbps and 400 Gbps. For example, most high-speed home Internet services currently cap at around 60 Mbps for copper-based services, while fiber services now offer speeds “near gigabit Ethernet”. With the enterprise connectivity options of service providers, Ethernet technology has become a necessity for data centers, thus providing a lucrative opportunity for the expansion of the data center switch market.
– The steady march towards 100 Gigabit Ethernet in data center networks appears to have progressed, with a forecast of 19.4 million 100GbE ports per year being shipped by 2022, up from 4.6 million in 2017 (Dell EMC, 2018). Large service providers and some hyperscale cloud platforms have already adopted 100GbE, to run high-performance computing or cloud infrastructure services. Additionally, the bandwidth and low latency requirements of consumer data center workloads are also reaching the point where 100GbE can help.
– Gigabit Ethernet, moving traffic at speeds as fast as 1 Gbps, is a de facto standard in mobile platforms that need to support higher traffic volumes, delay-sensitive data (video, sensors, VoIP ) or multiple devices on the same platform (computer, IP phone, IP camera, sensors, etc.). Huawei’s Ethernet switch revenue increased 8.9% year-on-year in the last quarter of 2019 and 7.8% in 2019 compared to 2018, which significantly increased the market share of Huawei in the market.
– In 2018, HMS Networks concluded that Industrial Ethernet had overtaken traditional fieldbuses for the first time, and this development continued in 2019. With a steady growth rate of 20%, Industrial Ethernet represents now 59% of the global market in 2019 compared to 52% in 2018. EtherNet/IP contributed 15% of the market, making it the largest contributor, but PROFINET also recorded 14%. Other industrial Ethernets are EtherCAT at 7%, Ethernet POWERLINK at 5% and Modbus-TCP at 4%, all showing stable growth.
North America Dominates Market Share for Data Center Switches
– The United States currently has the largest number of data centers across the world and is experiencing robust growth in terms of big data volume and traffic due to the increase in the number of data centers. According to Cisco Systems, the volume of big data in data center storage worldwide is expected to reach 403 exabytes by 2021, a huge chunk of which will go to the United States.
– The expansion of mobile broadband, the growth of cloud computing and big data analytics are driving the demand for new data center infrastructure in the region. Additionally, lower server prices have increased the adoption of cloud computing companies in North America, which is expected to fuel the demand for switches over the forecast period.
– Several companies are investing in expanding their operations to strengthen their global footprint and improve their market presence in the region. For example, in January 2020, Stack Infrastructure, a wholesale data center colocation provider, raised over $1 billion to build a massive 125-acre, 4 million square foot campus in Northern Virginia. The new data center campus is expected to offer over 250 megawatts of mission-critical capacity with flexible, tailored facilities capable of serving large data center users.
– Additionally, multinational companies, such as Facebook, Microsoft, Apple, and Google, etc., are investing in green data centers to power from renewable sources. For example, in 2019, Google invested over $13 billion in data centers and offices in the United States. Such developments in the market are expected to increase the number of facilities operating over the forecast period.
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The data center switch market is highly competitive and consists of several major players. However, in terms of market share, few of these big companies currently dominate the market. Companies follow a number of strategies including expansions, mergers and acquisitions, joint ventures, collaborations, partnerships and others, these market players have become able to strengthen their position in the business. Key market players interpreted in the global Data Center Switches market report include Cisco, Jupiter Networks, Dell EMC, Arista Networks, ZTE, Hewlett Packard Enterprise, Mellanox, Huawei, Extreme Networks, and others.
– February 2020 – Arista Networks acquired Big Switch Networks, a software-defined networking and network monitoring developer. The acquisition of Big Switch will further strengthen the company’s network monitoring and observability suite delivered through Arista’s CloudVision software platform and Data ANalyZer capabilities.
– October 2019 – Juniper Networks has launched the first phase of migration of services from Telefonica UK to Telefonica UK Fusion Network, which is a brand new infrastructure for which Juniper Networks is the IP network provider. Juniper Networks and Telefonica co-designed Fusion Network to transform customer experience for mobile, home and business services globally
– January 2019 – Huawei launched a data center switch that uses an artificial intelligence (AI) chip, which was primarily designed to improve performance and reduce latency to near zero. The Cloud Engine 16800 data center switch series uses AI to improve network operations and is also expected to provide an underlying network foundation for enterprises to build new applications that use AI for performance of the network.
1.1 Study assumptions and market definition
1.2 Scope of the study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET DYNAMICS
4.1 Market Overview
4.2 Market Drivers
4.2.1 Rise in Demand for Cloud and Edge Computing Services
4.2.2 Government regulations regarding the location of data centers
4.3 Market Constraints
4.3.1 High Data Center Operational Cost
4.4 Industry Attractiveness – Porter’s Five Forces Analysis
4.4.1 Threat of new entrants
4.4.2 Bargaining power of buyers/consumers
4.4.3 Bargaining power of suppliers
4.4.4 Threat of Substitute Products
4.4.5 Intensity of Competitive Rivalry
4.5 Technology overview
4.5.2 Technology (Ethernet, Fiber Channel and InfiniBand)
5 MARKET SEGMENTATION
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