Market Trends of Australia Data Center Networking Industry
BFSI to Hold significant market Growth
- Banks are relocating their servers from their back offices to shared spaces like data centers. Information technology (IT) systems in modern banking are mission-critical, and data centers serve as the fundamental building blocks of a robust, resilient IT environment.
- Since 2019, Australia has witnessed a surge in digital banks following favorable legislative changes in 2018. Presently, Australia is home to five independent licensed neo-banks and a multitude of digital banking platforms. Australian banks have reported that digital banking is now the primary channel for customers aged between 16 and 69, with digital interactions increasing by 10% since 2019. The escalating prominence of digital banking poses risks such as downtime, outages, and recurring issues in major networking infrastructure.
- Several Australian banks rely on IP/MPLS networks to connect their branches to data centers and cloud service providers. Major branches function as concentration points, aggregating traffic from smaller branches before forwarding it to the backbone network, which leads to data centers and cloud services.
- According to the Australian Banking Association, the value of mobile wallet transactions has surged by 12,400% from 2018 to 2022. The number of Australians using digital wallets continues to rise. The proportion of smartphone owners utilizing a digital wallet (including Apple Pay, CommBank Tap & Pay, Google Pay, Samsung Pay, NAB Pay, WeChat Pay, and Alipay) increased to 37% in the 18 months from September 2021, up from 18% in March 2020. With the increasing adoption of digital banking, the BFSI (Banking, Financial Services, and Insurance) segment is expected to experience significant growth throughout the forecast period
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Ethernet Switches Hold Major Market Share
- Data center Ethernet switches are integral network devices specifically designed for operation within a data center environment. They serve a crucial role in facilitating efficient and rapid data transfer by establishing interconnections among servers, storage devices, and other network equipment. These switches are optimized for high-speed data transmission, supporting various Ethernet speeds such as gigabit multigigabit (including 10GbE, 25GbE, 40GbE, 100GbE, and beyond).
- Australia, like many other countries, has undergone significant digital transformation across industries. Businesses are increasingly investing in data centers to enhance the efficiency of their processes, services, and overall operations. Ethernet switches are pivotal in ensuring the efficiency, reliability, and security of data center operations.
- Despite a decline in router and wireless LAN markets, ethernet switches are swiftly gaining traction in the Australian networking infrastructure market. Mobile network upgrades are propelling the growth to 5G and the adoption of 802.11ax standard Wireless LAN access points, which positively impact the ethernet market.
- According to industry experts, Cisco maintains dominance in the WLAN market, holding approximately 49.2% market share, followed by Netgear (11.2%), HPE (10.7%), Riverbed (4.9%), and D-Link (3.9%) as of 2022. In Australia, Cisco attributes its growth to increased shipments of high-speed ports, especially in the 25 Gigabits per second (Gbps), 50Gbps, and 100Gbps ranges.
- Key market players are actively focusing on updating network devices to meet evolving market demands. For instance, in July 2023, Broadcom introduced a new software-programmable Trident 4-X7 Ethernet switch ASIC, catering to the escalating need for 400G connectivity within enterprise data centers in response to the ever-increasing bandwidth requirements.
