Data center networking market is likely to hold a total of USD 29.27 Bn in 2025 and will reach at USD 63.11 Bn in 2032, exhibiting a compound annual growth rate (CAGR) of 11.6% from 2025 to 2032.
The data‑center networking market is expanding rapidly over the next decade. Key drivers include the growth of cloud computing and edge infrastructure, rising data traffic from AI/ML and IoT applications. The demand for high‑bandwidth, low‑latency interconnects (e.g., 400G/800G Ethernet) also fuel growth.
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Current Event |
Description and its Impact |
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AI and Machine Learning Infrastructure Boom |
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Cloud Hyperscaler Capacity Expansion |
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The data center networking market is changing as AI helps manage complex networks. Data traffic is rising, and companies need faster, better performance. AI tools now help data centers run smoothly, use resources well, and improve services.
For instance, in October 2025, Arista Networks launched the R4 Series routers for AI, data centers, and backbone networks. They help cut costs, boost performance, speed up AI tasks, save power, and provide built-in security.
Based on component type, software segment is likely to hold around 39.0% shares in the global market. This is owing to rising demand for automation. Businesses are adopting software solutions to improve efficiency. Cloud-based tools and analytics are also driving growth. Continuous updates and support make software more appealing.
For instance, in October 2025, NVIDIA and Nokia partnered to speed up the development of AI-native mobile networks and networking infrastructure.
Based on industry verticals, telecommunication segment is likely to hold highest shares in the global market. This is owing to growing demand for faster networks. Mobile and internet usage is increasing rapidly. Telecom companies are investing in 5G and infrastructure. Rising need for connectivity in businesses and homes is driving growth.
For instance, in October 2025, Bharti Airtel partnered with Google to establish India’s first Artificial Intelligence (AI) hub and data center in Visakhapatnam, Andhra Pradesh.
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North America is leading markets in terms of revenue in 2025, and will hold dominating position over the forecast period. The market growth in these regions is attributed to the growing storage, communication, delivering IT services and networking to number of network users, businesses, and devices.
For instance, in October 2025, RAKsmart launched its new data center node in Seattle, USA.
Asia Pacific region is likely to gain traction during the forecast period. The countries in the Asia Pacific regions are constantly investing in the software and hardware sector. New Projects are initiated to meet the requirement of countries such as India, Bangladesh, Taiwan, and others.
For instance, in July 2025, Data Center Asia (DCA) debuted at AsiaWorld-Expo, Hong Kong, in the APAC data center landscape.
The U.S. is considered a leading country in the global data center networking market in 2025. This is due to strong cloud adoption, major tech companies, and high demand for AI and big data. It also benefits from advanced infrastructure and large-scale investments in 5G and edge computing.
For instance, in May 2025, Nokia was selected by CoreSite, to deploy IP routing-based edge and core network solution across 30 data centers in 11 U.S. markets.
China is considered a leading country in the global data center networking market in 2025. This is owing to rapid digital growth, strong government support, and rising demand for cloud and AI services. It also invests heavily in new infrastructure and green data centers.
For instance, in September 2025, China Unicom launched a USD 390m AI data centre in Qinghai, powered by domestic chips from Alibaba and other Chinese developers.
| Report Coverage | Details | ||
|---|---|---|---|
| Base Year: | 2024 | Market Size in 2025: | USD 29.27 Bn |
| Historical Data for: | 2020 To 2024 | Forecast Period: | 2025 To 2032 |
| Forecast Period 2025 to 2032 CAGR: | 11.6% | 2032 Value Projection: | USD 63.11 Bn |
| Geographies covered: |
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| Segments covered: |
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| Companies covered: |
Google, Inc., Huawei Technologies Co. Ltd., Cisco Systems, Inc., Brocade Networking Solutions, Hewlett Packard Enterprise, Extreme Networks, Inc., Arista Networks, Avaya, Inc., Juniper Networks, Dell Inc., and Microsoft Corporation. |
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The data center networking market is growing due to higher demand for fast internet and more mega data centers. The use of 100 GB switch ports and better broadband infrastructure also boosts growth.
Mega data centers and colocation facilities are growing to handle more data and cloud demand. This increases the need for advanced networking to move data efficiently
The increasing embrace of cloud computing and the escalating need for cloud-based services create a noteworthy opening for data center networking. As businesses transition their infrastructure and applications to the cloud, there arises a requirement for resilient networking solutions to guarantee secure and seamless connectivity between data centers and cloud environments.
The rapid expansion of Internet of Things (IoT) devices and the demand for computing capabilities with minimal latency are propelling the advancement of edge computing. This trend creates a favorable situation for data center networking providers to deliver solutions that facilitate the efficient transfer and processing of data at the edge, in close proximity to where the data is generated.
Due to the increasing apprehensions regarding data security and privacy, data center networking providers have an opportunity to provide solutions that bolster network security and implement robust data protection measures. This encompasses the utilization of technologies like network segmentation, encryption, and advanced systems for detecting and preventing threats.
The growing emphasis on environmental sustainability and energy efficiency offers data center networking vendors a chance to create solutions that align with green initiatives. This entails optimizing power consumption, enhancing cooling efficiency, and implementing energy-efficient networking infrastructure, thereby supporting environmentally conscious practices
Data center networking is the method of establishing and communicating all physical- and network-based equipment and devices within a data center facility. Data center networking is extremely crucial in data center as it communicates all the data center resources together.
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About Author
Monica Shevgan has 9+ years of experience in market research and business consulting driving client-centric product delivery of the Information and Communication Technology (ICT) team, enhancing client experiences, and shaping business strategy for optimal outcomes. Passionate about client success.
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