Data Center Switch Market - By Type (Core, Distribution, Access), By Technology (Software-Defined Networking, Traditional Switching), End User, By Organization Size, By Port Speed & Forecast, 2023 – 2032

Data Center Switch Market Size

Data Center Switch Market was valued at USD 6.2 billion in 2022 and is projected to grow at a CAGR of over 13% between 2023 and 2032. With the growth in data traffic and the need for faster and more reliable data transfer, data center operators are constantly seeking higher bandwidth solutions. This drives the demand for data center switches with higher port speeds, low latency, and increased capacity to support applications and services with stringent performance requirements.
 

To that end, companies in this space are consistently innovating new products to meet these evolving requirements, thus contributing to the growth of the data center switch industry. For instance, in July 2023, Broadcom, addressing the need for 400G connectivity in enterprise data center top-of-rack (ToR) switches, introduced its software-programmable Trident 4-X7 Ethernet switch ASIC. This innovation aims to bring the power and capabilities enjoyed by cloud operators to enterprise data centers. The Trident 4-X7 integrates advanced hardware features for analytics, diagnostics, and telemetry, enabling organizations to automate data center operations. While it's a hardware solution, it's fully programmable, allowing seamless field upgrades to adapt to evolving data center requirements. Additionally, Broadcom is ensuring compatibility with the open-source SONiC network operating system.

Increasing focus on energy efficiency will pave a healthy growth pathway for the data center switch industry. Data centers are under pressure to reduce energy consumption and lower their carbon footprint. These concerns have propelled the adoption of energy-efficient switches with advanced power management features, further creating a robust growth outlook for the data center switch market.
 

Citing an instance, in July 2023, DigitalBridge, the owner of Switch, revealed a substantial investment in Aware Super. This investment will enable Aware Super to expand its digital infrastructure investment portfolio. Switch's unique platform, featuring top-tier data centers and a commitment to a 100 percent carbon-neutral footprint, aligns with our mission to deliver robust, risk-adjusted returns to our 1.1 million members, all while responsibly managing real assets as owners and operators.
 

COVID-19 Impact

The COVID-19 pandemic had a significant impact on the data center switch industry. With the accelerated shift to remote work, online education, and increased digital activities, the demand for data center services and high-speed connectivity surged. Data center switches played a crucial role in ensuring uninterrupted data flow and network reliability, prompting increased investments in data center infrastructure and the adoption of more advanced and scalable switch solutions to meet the heightened demand for data processing and communication services.
 

Data Center Switch Market Trends

As data-intensive applications, cloud computing, and 5G networks become more prevalent, there is an escalating demand for higher data transfer speeds and network capacity. Data center switches supporting 400G and beyond offer the necessary bandwidth and performance, making them vital components in modern data infrastructure, ultimately driving the expansion of the data switch market.
 

Driven by these benefits, companies operating in this space are advancing their capabilities and rolling out new products to keep up with the changing consumer requirements. For instance, in October 2023, Taiwan's Edgecore Networks announced expanding its product lineup to cater to the growing demand for artificial intelligence (AI) and machine learning (ML) workloads within data center networks. Their latest offering, the DCS560, is an 800G-optimized switch engineered to deliver high-performance Ethernet fabrics for AI and ML deployments. This switch boasts a remarkable 51.2 Tb/s of total switching capacity, featuring 64 ports that support 800G interfaces, and is driven by Broadcom's StrataXGS Tomahawk 5 series silicon. Broadcom initially introduced the Tomahawk 5 series in 2022 to enhance hyperscale data center operations.
 

Data Center Switch Market Analysis

Based on technology, the market is divided into Software-Defined Networking (SDN) and traditional switching. The Software-Defined Networking (SDN) segment is expected to grow at a CAGR of around 13.5% during the forecast period. The segment growth is driven by the need for enhanced network agility, flexibility, and scalability. SDN allows centralized control and dynamic management of network resources, making it easier to adapt to changing workloads and application demands. It offers the ability to automate network configurations, optimize traffic routing, and improve overall network efficiency, all of which are crucial in modern data center environments with evolving requirements for virtualization, cloud computing, and efficient resource utilization.
 

Based on organization size, the data center switch market is categorized into SME and large enterprises. The large enterprises segment was valued at over USD 4 billion in 2022. Data center switches are in high demand among large enterprises due to their critical role in ensuring robust, high-performance network infrastructures. Large enterprises rely on data centers to support mission-critical applications, data storage, and communication needs. As these businesses continually expand and embrace technologies like cloud computing and big data analytics, there's a growing need for scalable, high-capacity data center switches to manage the increasing data flow and provide reliable connectivity, ensuring seamless operations and the ability to meet their business objectives.
 

North America held a dominant market share of over 40% in 2022. The region growth is due to the robust adoption of cloud computing and digital transformation initiatives across various industries in the region, leading to a heightened demand for data center infrastructure. Prominent companies like Cisco, Juniper Networks, and Arista Networks, headquartered in North America, are driving innovation in data center switches. Additionally, North America's commitment to data security and compliance standards encourages investment in advanced switch technologies to safeguard sensitive data. Furthermore, the region's emphasis on edge computing and the growth of hyperscale data centers have spurred the flourishing data center switch industry.
 

Data Center Switch Market Share

The major players operating in the data center switch industry are:

• Arista Networks
• Broadcom
• Cisco Systems
• Dell Technologies
• Extreme Networks
• Hewlett Packard Enterprise (HPE)
• Huawei Technologies
• Infinera
• Juniper Networks
• Lenovo

Cisco Systems and Arista Networks are the dominant players in the data center switch business due to their innovative & versatile offerings. These players employ various strategies to enhance their presence, including innovation in high-speed networking technologies, acquisitions of complementary firms, strategic partnerships, expansion of product portfolios, and a focus on energy efficiency and sustainability, all aimed at meeting evolving data center demands and ensuring competitiveness in the rapidly changing tech landscape.
 

Data Center Switch Industry News

• In October 2023, Cisco and Aviz Networks joined forces to deliver an enterprise-grade SONiC solution tailored to large customers seeking to implement the open-source network operating system. This collaboration entails offering Cisco's 8000 series routers bundled with Aviz Networks' SONiC management software, backed by round-the-clock support. The support element of this partnership is particularly noteworthy as it addresses customer concerns regarding the maintenance of an open-source NOS, ensuring a reliable and well-supported solution.

The data center switch market research report includes in-depth coverage of the industry, with estimates & forecast in terms of revenue (USD Million) from 2018 to 2032, for the following segments:

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Market, By Type

• Core Switches
• Distribution Switches
• Access Switches

Market, By Technology

• Software-Defined Networking (SDN)
• Traditional Switching

Market, By Organization Size

• SME
• Large Enterprises

Market, By Port Speed

• Less than 10G
• >10G to <40G
• >40G to <100G
• >100G

Market, By End User

• Cloud Service Providers
• Enterprises
• Telecommunications
• Government

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • UK
  • Germany
  • France
  • Spain
  • Poland
  • Benelux
• Asia Pacific
  • China
  • India
  • Japan
  • Singapore
  • Australia
  • South Korea 
• South America
  • Brazil
  • Argentina
  • Chile
  • Colombia
• MEA
  • GCC
  • South Africa