Originally published on Technavio: Global Data Center Switch Market Analysis 2024-2028: North America, APAC, Europe, South America, Middle East and Africa - US, Canada, China, Germany, UK - Size and Forecast
Data Center Switch Market Forecast 2024-2028  
The data center switch market size is expected to expand by USD 5.23 billion at a CAGR of 5.72% between 2023 and 2028. The growth analysis depends on factors such as the increasing need for simplified management and automation, the rising demand for InfiniBand switches, and the growth of cloud service providers.

Market Overview 
Market Driver  
The key factor driving market expansion is the growing need for simplified management and automation. As data centers become more intricate and integral to business operations, organizations seek solutions that streamline management tasks, enhance efficiency, and offer greater automation. Modern data centers host diverse applications, services, and workloads, making network infrastructure management challenging. Switches with advanced management and automation features simplify network operation and maintenance. The emerging approach of intent-based networking (IBN), leveraging automation to translate high-level business policies into network configurations, further underscores the demand for simplified data center management and automation.

Market Trends 
Growing Demand for Internet Connection 
The primary trend in the market is the increasing demand for Internet connection. With more devices, users, and applications connecting to the Internet, the importance of robust and scalable data center networks grows. The continuous rise in traffic due to online services, social media, video streaming, and cloud-based applications necessitates switches capable of managing high data volumes between servers, storage systems, and the broader Internet.

Furthermore, the expansion of cloud computing services, encompassing infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS), relies heavily on such networks. The surge in remote work and the need for remote access to applications and data further contribute to the demand for Internet connectivity. As the demand for Internet connectivity continues to escalate, ensuring the efficiency, reliability, and scalability of data center networks becomes crucial, driving market growth.

Market Restrain  
High Operational Cost  
A major challenge affecting market expansion is the high operational cost. Data center switches can move vast amounts of data in milliseconds without slowdowns, making them suitable for bandwidth-intensive applications like gaming, video editing, and cryptocurrency mining. However, the relatively high research and development cost of data center switches is a limiting factor. Additional features such as processors, memory, cabling, and connectors contribute to the increased price of these switches.

Market Segmentation By Type 
Significant Market Share by the Core Switches Segment 
The core switches segment is poised to hold a substantial market share during the forecast period. In data center networking, core switches play a crucial role in connecting various distribution switches, providing high-speed, high-capacity connectivity for data traffic within the data center. Two types of core switches are found in data center environments: chassis-based core switches and fixed-configuration core switches.

Market Segmentation By Technology    
The Ethernet segment is expected to account for the largest share in this category. Ethernet technology has witnessed significant growth due to its versatility, scalability, and widespread adoption. Based on IEEE standards, Ethernet provides a standardized and interoperable networking solution. As technology continues to evolve, Ethernet remains a constant technology capable of supporting the high-performance networking demands of modern applications, services, and workloads, contributing significantly to market growth.

APAC's Estimated Contribution  
APAC is projected to contribute 34% to the global market's growth during the forecast period. North America leads the market, driven by widespread adoption across cloud service providers, telecoms, enterprises, and governments. The US, experiencing a surge in new center constructions and renovations, serves diverse business needs, relying on core, distribution, and access Ethernet switches for high-speed communication. The increasing demand for faster internet, fueled by rising mobile and business traffic, amplifies the need for enhanced connectivity, driving North America's market growth.

Market Customer Landscape 
The market forecasting report encompasses the adoption lifecycle, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. The report includes key purchase criteria and drivers of price sensitivity to aid companies in evaluating and developing market growth and trends strategies.

Market Companies  
Companies employ various strategies, including strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their market presence.

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Accton Technology Corp.: The company offers products such as High radix switch systems, supporting a flexible choice of interface speed options from 25GbE to 50GbE, 100GbE, 400GbE and beyond for a wide coverage of use cases.  
The market research report forecasts revenue-driven growth at global, regional, and country levels. It provides an analysis of the latest trends and growth opportunities spanning from 2018 to 2028.

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