Tuesday, April 23, 2024

The Data Center Networking Market

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Data center networking integrates and pools multiple data center resources, enabling them to communicate throughout the network. The networking aspect handles the switching, routing, and load balancing of the data centers, enabling them to work together.

Interconnected data centers can include an organization’s data, applications, and user files, making processing and security more effective.

See below to learn all about data center networking technologies and the data center networking sector:

Data center networking market

The data center networking market was estimated at $17.8 billion in 2020. It’s projected to maintain a compound annual growth rate (CAGR) of 13% over the analysis period from 2020 to 2027, reaching an estimated $41.9 billion by the end of it.

The data center networking services market segment’s CAGR was adjusted to 13.9% over the analysis period. The solution segment of the market is forecast to reach $29.5 billion by 2027, trailing a CAGR of 12.7%.

Regionally, the data center networking market is segmented as follows:

  • The U.S. market was estimated at $4.8 billion in 2020, with a 26.9% share
  • The Chinese market is forecast for a CAGR of 16.9% over the analysis period, reaching $9.3 billion by 2027
  • Japan and Canada are forecast to grow at a CAGR of 9.2% and 11.4% over the forecasting period
  • Within Europe, Germany is projected to maintain one of the highest CAGRs at 10.2%

By industry vertical, the banking, financial services, and insurance (BFSI) sector is forecast to have the highest growth and market consumption levels by 2025.

Other notable verticals in the market include:

  • IT
  • Telecommunications
  • Retail
  • Education
  • Government
  • Health care
  • Manufacturing
  • Media and entertainment

Data center networking features

Since data center networking is the combination of multiple data centers, the functionality you get from the network depends on how the data centers get grouped and how they communicate.

As more organizations move to the cloud, redesigned and modernized data centers and on-premises environments are proving to be dynamic enough to keep up cloud options.

Modern data center network designs are agile and include data processing within their layers to boost service velocity.

“Data center networks are moving to a simpler, more agile design. This means, in more technical terms, embracing spine-leaf designs for physical networking, along with a routed infrastructure in the underlays,” says Rajiv Khemani, a member of the Forbes Technology Council.

“Central to this shift, of course, is unprecedented data growth. … For data center networks, this means more bandwidth consumption and the need to easily move data between data centers, so it can be accessed from anywhere.”

The core components of data center networking are:

  • Servers
  • Data storage
  • Switches
  • Routers
  • Firewalls
  • Network infrastructure
  • Computing resources

Here are some data center network architectures used by IT teams:

3-Tier Data Center Network

3-Tier Data Center Network (DCN) architecture design uses three layers of components with a core layer, a distribution layer, and a layer of switches for network access. The layers can also be categorized as the application, data, and user-interface layers. This data center architecture best serves lateral data movement, coming into the data center or leaving it.


The DCell data center architecture is a hybrid model. By using a server in the center of the architecture, it’s connected to other data centers using mini switches. The DCell approach is best at preventing bottlenecks during excessive data flows. Additionally, it doesn’t have a single point and failure and can ensure continuous uptime.

Fat tree data center network

The fat tree data center network architecture can be considered an improvement on the 3-tier DCN design. Using a relatively large number of network switches, the fat tree architecture optimizes the use of bandwidth in the network’s cross-section. As a switches-based architecture, the fat tree enables access to the numerous layers of the network.

Benefits of data center networking

A few notable examples include:

  • Increases network productivity
  • Improves data storage security
  • Simplifies data management
  • Boosts hardware-software connectivity
  • Reduces costs
  • Reduces resource requirements
  • Facilitates remote access
  • Highly reliable and resilient

Data center networking use cases

The concept of data center networking is flexible. Its numerous architectures allow it to be implemented in a wide variety of ways, depending on a company’s needs and expectations.


T-Systems offers end-to-end IT solutions to drive digital transformation for its clients in a variety of industries and the public sector. Based in Germany, T-System offers its services in over 20 countries around the globe and has over 28,000 employees.

Looking to meet the high performance and availability expectations of its clients, T-Systems consolidated its 45 data centers into 11 modern data center networks that are cloud-based.

Working with Juniper Networks, T-Systems was able to automate and strategize its data centers network after it was almost invisible in effect.

“With a modern data center architecture from Juniper, we can implement automation to provision environments for customers faster,” says Thomas Wende, head of data center network engineering, T-Systems. 

“Automation and orchestration were key requirements, since they would allow us to provision services to customers and capitalize on new opportunities, such as multicloud more quickly.”

With automation implemented into its data center network, T-Systems was able to drastically reduce the rate of human error and boost processing efficiency.


Swisscom is one of Switzerland’s largest telecommunications services, with offerings ranging from outsourcing cloud to connectivity and data networking services. Swisscom has clients in industries such as hospitality, banking, and health care and over 21,000 employees.

Looking to successfully migrate its clients’ data to a new data center, Swisscom needed to boost the connectivity and reduce the errors in its data centers. Working with IBM and using its Cloud Orchestrator portal solution, Swisscom built up the connectivity services for its clients.

“We can now deliver all these services — both fully managed services and cloud services — through our data center, using IBM Cloud Orchestrator, and give our customers options,” says Max Hoesle, project leader, network automation and orchestration team, Swisscom.

“In IBM Business Process Manager we have lots of processes and all of them are automated. The operator can click on the services he needs for his customers, and the work process for those services is predefined in BPM.”

Working with IBM, Swisscom was able to accelerate network provisioning from weeks to hours, eliminate human errors, and increase customer access to services.


UP42 is a marketplace and development platform for Earth observations and data analytics. Based in Germany, UP42 offers a massive library of geospatial data and artificial intelligence (AI) algorithms that its clients can access via the company’s API along with unlimited processing power.

As a one-stop-shop for data and insights in geospatial fields, UP42 needs to maintain the accessibility of its data and provide its clients with the CPU and GPU computing power they promised. Using Google Kubernetes Engine (GKE), UP42 was able to utilize Google Cloud’s global network of data centers and scale its resources according to the demand.

“Wherever data sets may be located in far-flung parts of the world, we’re able to crunch it for our clients at planet scale. This simply would not be possible without Google Kubernetes Engine and Google Cloud data centers in every corner of the world,” says Barry Nagel, CTO, UP42.

“We simply distributed all of our processing needs onto Google Cloud, ramped up the infrastructure as much as needed, and delivered super-fast execution.”

Working with Google Cloud, UP42 was able to impress its clients with boosted computing power, make it easier to access data from all over the world through a global data center network, and inspire new AI and business expansions.

Data center networking providers

Some of the leading providers of data center networking solutions and services in the market include:

  • IBM
  • Arista Networks
  • AWS
  • Broadcom
  • Intel
  • Fujitsu
  • Extreme Networks
  • Cisco
  • Delta Electronics
  • Juniper Networks

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