Data Centre Networking Market to Boom due to 5G Adoption

According to Kings Research, the data centre networking market is projected to reach a US$38.33bn revenue by 2030, given the rise of 5G technology adoption

The data centre networking market is expected to experience a corporate annual growth rate (CAGR) of 7.53% by 2030 - bringing the overall revenue to US$38.33bn.

Globally, the data centre networking market was valued at US$21.43bn in 2022. A recent report published by Kings Research finds that North America is leading the market as the widespread application of 5G technology continues to rise.

Data centre networking refers to the integration of networking resources within a data centre facility that facilitates the storage and processing of applications and data. Juniper Networks says a network consists of switches, routers and other hardware components that work together to provide the connectivity and security needed to run applications and process data.

Increased use in cloud services drives network expansion

Kings Research attributes the rapid growth of the data centre networking industry to the surge in data centre virtualisation and increased advanced data centre operating models. Additionally, it refers to the expansion being primarily driven by the need for real-time user interaction and the optimisation of on-demand services in diverse organisations.

Modern data centre networks incorporate virtualisation to support applications and workloads across both physical and multi-cloud environments. As well as relying on physical components, networks also depend on software such as management and automation systems. As a result, data centre systems can deliver data and services for end users.

Increased customer use of artificial intelligence (AI) and cloud services across a wide range of key industries has also prompted networking expansion. With these new technologies continuing to be in high demand worldwide, data centres are continually working to expand their capabilities to keep pace.

Given the continued demand for data processing and communication services, 5G technology can help to improve operational efficiency within data centre facilities. Combining 5G and data centres can help businesses tap into low latency, high speeds and the large bandwidth that 5G can offer.

Additionally, 5G can also contribute to cloud and sustainability solutions. According to industry leader Verizon, combining a 5G data centre with a traditional cloud-computing environment offers companies innovative processing for advanced analytics in the cloud.

Transforming the telecommunications sector

Data centre networking consists of intricately interconnecting various network components, including routers, switches, firewalls, load balancers and storage systems, to establish a robust and expandable network framework within the data centre. 

It plays a pivotal role in ensuring that data and communication across critical data centre assets flows seamlessly.

Its significance extends to bolstering the performance of data-intensive applications, ensuring uninterrupted operation, and facilitating the smooth functioning of IT services. Within this framework, data centre switches assume a central role, via forwarding network data packets and ensuring connectivity among devices within the data centre.

Kings Research also found that the IT and te­lecommunications sector accounted for the largest market share in data centre networking in 2022. It attributes this growth to factors such as a rise in tele­com subscribers and the widespre­ad use of smartphones, which generate more data and increase­ demand for data centre ne­twork solutions. 

With the ever-increasing demand to optimise network performances, companies are keen to enhance their services to provide better and more widespread connectivity.

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