Market Overview

The data center switch is an evolving technology with a distinct class of switch and networking infrastructure. The data center switch is a high-performance switch largely for large enterprises and cloud providers who depend heavily on virtualization. It can be stationed throughout the data center or to attach a two-tier (leaf-spine) or one-tier flat mesh or fabric architecture. The factors such as advancement in edge computing, cloud computing, government regulations regarding localization of data centers, huge data center operational cost, and progress in smart computing devices are anticipated to significantly influence the growth of the global data center switch market.

  • The principal trend that is supporting data center is the cloud and its connection to billions of connected devices such as autonomous vehicles, PCs, virtual reality systems, and others. For instance, 80% of all enterprise (and mission-critical) workloads will move to the cloud (Oracle’s Cloud Prediction, 2019). Even as the absolute number of files stored in the cloud has grown rapidly, the percentage of files that contain sensitive data has also grown, today standing at 21% with an increase of 17% over the past two years. When smart equipment and devices are connected to the cloud, the data generated can be analyzed in real-time, enabling these devices to be more useful data center products.
  • The evolution of artificial intelligence, 5G networks, and virtual reality systems has boosted the number of data centers, which drives the growth of the data center switch market. Furthermore, the race of digital transmutation signifies many companies have sought to refurbish their datacenter infrastructure, including their networks, to support modern and popular applications, thus fueling the growth of the market.
  • One of the principal factors that hinder the growth of the data center switch market is the huge energy cost of the data centers, as energy comprises a big part of the expenses. Energy prices in most of the metropolitan cities are comparatively higher than those of other cities. In addition, other operational costs such as maintenance, labor, machine, and other restraint the growth of the global data center switch market.
  • However, the shortage of data center skills deficit is the determinant hindering the market demand. The historically feeble profile of datacenters as a career choice, combined with strengthening management and operational complexity along with local shortages of well-qualified staff generates a negative influence on the market.

Scope of the Report

The data center switch is normally found in the server area within a data center and is one of the indispensable necessities in the premises. Datacenter switches improve security, simplify operations, automate processes, and help in dynamically managing application traffic flows in the cloud network. They support the deployment of multiple types, notably cloud environments, without sacrificing on the manageability, scalability, and performance in data centers.

Key Market Trends

Ethernet Technology Segment to Maintain its Dominance

  • Ethernet speeds are operating anywhere from 10 Mbps to 400Gbps. For instance, most high-speed Internet home services are currently maxing out at about 60 Mbps for copper-based services, while Fiber services are now offering “near gigabit Ethernet” speeds. With enterprise connectivity options from service providers hit speeds, ethernet technology has become a necessity for data center, thus offering a lucrative opportunity for data center switch market expansion.
  • The steady march to 100 Gigabit Ethernet in data center networks appears to have progressed, with a prediction of 19.4 million 100GbE ports per year would be 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, for running high-performance computing or cloud infrastructure services. In addition, bandwidth and low-latency needs of the workloads in mainstream data centers are also reaching the point where 100GbE can help.
  • Gigabit Ethernet, moving traffic at speeds of as fast as 1 Gbps, is a defacto standard in mobile platforms that require to support higher volumes of traffic, delay-sensitive data (video, sensors, VoIP) or multiple devices on the same platform (computer, IP phone, IP camera, sensors, etc). Moreover, ethernet is developing quickly with SmartNIC technology and virtual switch offloads and is set to deliver almost everything the modern hyper-converged or software-driven datacenter needs in terms of storage performance, capacity and management over the long term and ethernet is one technology that would be difficult to bet against.

North America Occupies a Dominant Market Share for Data Center Switches

  • North America is anticipated to acquire the most comprehensive market share of the data center switch. The market in the United State is expected to undergo greater adhesion as a significant number of companies are likely to opt for cloud services to save their upfront expense of building new data centers for business continuation.
  • For instance, Cisco (US), is one of the leading global brands in the switching industry and has been driving for many years. The organization’s extremely innovative Nexus switches use a 16 nm technology, which gives a sizeable end-point density with enhanced scalability and performance up to 50%. Arista Networks (US) is one of the principal suppliers of integrated cloud networking switching solutions, including extensible operating systems and software innovations.
  • Also, the US is the base for worldwide cloud service providers and data centers infrastructure services providers such as Microsoft (US) and Amazon Web Services (US). Moreover, the leading companies in the data center switch market that make more than 50% of the revenue are based in the US.
  • Furthermore, the supportive government actions and initiatives and policies for managing the adoption of industrial automation among the manufacturing and automotive industry in the region are expected to have a vital impact on market growth throughout the forecast period.

Competitive Landscape

The market for Data Centre Switch is highly competitive and consists of several major and prominent players. In terms of market share, few of these major players currently dominate the market. Adhering to a number of high-end strategies including expansions, mergers & acquisitions, joint ventures, collaborations, partnerships, and others, these market players have become able to strengthen their position in the business. The chief market players interpreted in the global data center switch market report include Cisco, Jupiter Networks, Dell EMC, Arista Networks, ZTE, Hewlett Packard Enterprise, Mellanox, Huawei, Extreme Networks, etc.

  • October 2019 - Juniper Networks, announced the first phase of Telefonica UK’s successful services migration to the Telefonica UK Fusion Network, a brand new infrastructure for which Juniper Networks is the strategic IP network provider. Juniper Networks and Telefonica designed the Fusion Network to transform the customer experience for mobile, residential and business services globally.
  • May 2019 - Arista introduced 7800R series data center switches for enabling rapid cloud transformation, which is optimized for large virtualized and cloud networks, are the industry’s highest-performing universal spine switches that leverage Arista modernized network operating system, EOS, for routing capabilities.
  • May 2019 - Cisco rolled out an integrated hardware/software package called SD-WAN Cloud onRamp for CoLocation that lets customers tie distributed multi-cloud applications back to a local branch office or local private data center.

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