Market Trends of Indonesia Data Center Networking Industry
IT and Telecom is expected to hold significant market share
- With this growth in the number of smartphones in the country, the average screen time increased from 45 minutes in 2016 to 5 hours in 2022. The growth is driven by an increase in telecom subscribers and an increasing number of smartphone users to generate more information and increase demand for data center network solutions in the country.
- The increasing demand for 4G services and the continuous expansion of infrastructure to provide 5G services facilitate the use of data centers. As the amount of data generated continues to increase, the need for backup and storage solutions increases. This accommodates the increasing number of network solutions in data centers.
- COVID-19 had a major impact on the growth of data traffic per smartphone. For instance, OTT consumption increased by 35% from February 2020 to April 2020, where average screen time increased to over 3 hours of online streaming content during the pandemic. This increase in data consumption has enforced the need for improvement in the existing data centers and the construction of new data centers to meet the growing demand for data networking solutions and processing.
- Increasing Internet penetration, increased use of social networks, improved automation technology, smart city initiatives, and implementation of AI across industries are driving investment in data centers. Moreover, the rise in AI, IoT, and big data workloads is driving demand for ingenious data center network infrastructure solutions among data facilities. This allows providers to constantly innovate their network portfolio to adapt to the environment and deliver greater efficiency, scalability, and reliability.
- The growing demand for the Internet in the country drives companies to establish new networks. With the Internet being the primary requirement for the smooth operation of any data center and the rise in average broadband speed, predominantly FTTx, and with improvement in digital infrastructure in the eastern region of the country, data center construction projects are expected to be more focused in the country during the forecast period. As the number of data centers increases, so does the demand for data center networking solutions in the country.
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Ethernet Switches Holds Largest Market Share
- Ethernet is a midrange technology that also provides a practical solution to meet growing data center connectivity requirements. Therefore, data center expansion has increased the demand for high-bandwidth switches.
- Ethernet switches are used in diverse applications in industrial infrastructure, including smart grids, surveillance and security, smart rail and transportation, and other utilities. These switches play a crucial role in the substation automation in smart grids. This is because integrating a switch into an Ethernet-based network reduces the complexity and tension of cabling between power transmission and distribution devices within a substation.
- Increased investment in the IT industry, increased digitalization, and expansion of many companies, including telecommunications, data centers, and cloud computing, are driving the use of Ethernet switches in the country.
- The use of Ethernet switches is expected to increase due to the increased use of Power over Ethernet (PoE) in various applications, increased internet connectivity, development of cloud networks, and integration of home and business networks.
- The introduction of higher bandwidth, high performance, scalability, and virtualization in data centers contributes to the growth of the data center networking market.
