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Japan Data Center Networking Market Size (2024 - 2029)

The Japan data center networking market is experiencing growth driven by the rising demand for cloud computing among small and medium enterprises, adherence to government regulations for local data security, and increased investments by domestic players. The market's expansion is further supported by the anticipated increase in IT load capacity and the construction of additional raised floor areas. The proliferation of submarine cable systems and the focus on energy efficiency, particularly through the development of green standards, are also contributing to the market's growth. These factors collectively influence the market size, indicating a positive trajectory for the data center networking sector in Japan during the forecast period.

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Market Size of Japan Data Center Networking Industry

Japan Data Center Networking Market Summary
Study Period 2019 - 2030
Base Year For Estimation 2023
Market Size (2024) USD 0.79 Billion
Market Size (2030) USD 1.15 Billion
CAGR (2024 - 2030) 5.27 %
Market Concentration Medium

Major Players

Japan Data Center Networking Market Major Players

*Disclaimer: Major Players sorted in no particular order

Japan Data Center Networking Market Analysis

The Japan Data Center Networking Market size is estimated at USD 0.79 billion in 2024, and is expected to reach USD 1.15 billion by 2030, growing at a CAGR of 5.27% during the forecast period (2024-2030).

The Japan data center networking market reached a value of USD 709.6 million in the previous year, and it is further projected to register a CAGR of 5.27% during the forecast period. 

  • The increasing demand for cloud computing among SMEs, government regulations for local data security, and growing investment by domestic players are some of the major factors driving the demand for data centers in the country.
  • The upcoming IT load capacity of the Japan data center market is expected to reach 2000 MW by 2029. The country's construction of raised floor area is expected to increase to 10 million sq. ft by 2029.
  • The country's total number of racks to be installed is expected to reach 500 K units by 2029. Tokyo is expected to house the maximum number of racks by 2029. There are close to 30 submarine cable systems connecting Japan, and many are under construction.
  • One such submarine cable that is estimated to start service in 2023 is Southeast Asia-Japan Cable 2 (SJC2), which stretches over 10,500 Kilometers with landing points from Chikura and Shima, Japan.
  • An increasing need for data storage has resulted in an upsurge in the number of data centers nationwide. Additionally, energy represents around 40% of the operational costs of a data center; it is also becoming increasingly important for data centers to focus on energy efficiency. To improve energy efficiency as a cost-saving measure, key players focus on developing a green standard for data centers in Japan, which results in increasing the demand for Infrastructure management. Hence, such factors are expected to drive market growth during the forecast period.

Japan Data Center Networking Industry Segmentation

Data center networking refers to the set of technologies, protocols, and hardware used to connect physical and network-based devices and manage the network infrastructure, storage, and processing of applications and data. Data center networking is very critical for 100% uptime of data centers. In the current web-connected world, business workloads are executed on single computers, hence leading to the need for data center networking. Networks provide servers, clients, applications, and middleware with a standard plan to stage the execution of workloads and also to manage access to the data produced.

The Japan data center networking market is segmented by component type, including product (ethernet switches, router, storage area network (SAN), application delivery controller (ADC), and other networking equipment) and services (installation & integration, training & consulting, and support & maintenance). It caters to various end-users such as IT & telecommunications, BFSI, government, media & entertainment, and other end-users.

The market sizes and forecasts are provided in terms of value (USD) for all the above segments.

By Component
By Product
Ethernet Switches
Router
Storage Area Network (SAN)
Application Delivery Controller (ADC)
Other Networking Equipment
Including: Network security equipment, WAN optimization appliance, Softwares)
By Services
Installation & Integration
Training & Consulting
Support & Maintenance
End-User
IT & Telecommunication
BFSI
Government
Media & Entertainment
Other End-Users
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Japan Data Center Networking Market Size Summary

The Japan data center networking market is experiencing significant growth, driven by the increasing demand for cloud computing, government regulations on data security, and substantial investments by domestic players. The market is characterized by a rising need for data storage, which has led to the proliferation of data centers across the country. Energy efficiency has become a critical focus, as it constitutes a substantial portion of operational costs, prompting key players to develop green standards for data centers. This emphasis on infrastructure management is expected to propel market expansion. The adoption of cloud-based services is further fueling the growth of retail and hyperscale colocation services, necessitating more network devices and services within data centers. The government's push for digital transformation, including the promotion of cloud services and the deployment of 5G technologies, is also contributing to the market's upward trajectory.

The market is moderately consolidated, with major players like Cisco Systems Inc., Arista Networks Inc., H3C Technologies Co., Ltd., VMware Inc., and Huawei Technologies Co. Ltd. actively expanding their presence. These companies are investing in advanced technologies to meet the growing demand for high-performance networking equipment, such as Ethernet switches, which are crucial for efficient data transfer within data centers. The introduction of next-generation switches and innovations like CPO silicon photonics technology highlight the industry's commitment to enhancing network capabilities. Additionally, strategic partnerships and expansions, such as those between Equinix, Inc. and VMware, Inc., are aimed at supporting the increasing need for digital infrastructure and multicloud services. As Japan continues to embrace digitization, the demand for data centers and networking solutions is expected to sustain its growth momentum over the forecast period.

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Japan Data Center Networking Market Size - Table of Contents

  1. 1. Market Dynamics

    1. 1.1 Market Overview

    2. 1.2 Market Drivers

      1. 1.2.1 Increasing Adoption of Cloud-Based Services

      2. 1.2.2 Advent of 5G Networks Drives Market Growth

    3. 1.3 Market Restraints

      1. 1.3.1 Cybersecurity Threats and Ransomware Attacks

    4. 1.4 Value Chain / Supply Chain Analysis

    5. 1.5 Industry Attractiveness - Porter's Five Forces Analysis

      1. 1.5.1 Threat of New Entrants

      2. 1.5.2 Bargaining Power of Buyers/Consumers

      3. 1.5.3 Bargaining Power of Suppliers

      4. 1.5.4 Threat of Substitute Products

      5. 1.5.5 Intensity of Competitive Rivalry

    6. 1.6 Assessment of COVID-19 Impact

  2. 2. MARKET SEGMENTATION

    1. 2.1 By Component

      1. 2.1.1 By Product

        1. 2.1.1.1 Ethernet Switches

        2. 2.1.1.2 Router

        3. 2.1.1.3 Storage Area Network (SAN)

        4. 2.1.1.4 Application Delivery Controller (ADC)

        5. 2.1.1.5 Other Networking Equipment

          1. 2.1.1.5.1 Including: Network security equipment, WAN optimization appliance, Softwares)

      2. 2.1.2 By Services

        1. 2.1.2.1 Installation & Integration

        2. 2.1.2.2 Training & Consulting

        3. 2.1.2.3 Support & Maintenance

    2. 2.2 End-User

      1. 2.2.1 IT & Telecommunication

      2. 2.2.2 BFSI

      3. 2.2.3 Government

      4. 2.2.4 Media & Entertainment

      5. 2.2.5 Other End-Users

Japan Data Center Networking Market Size FAQs

The Japan Data Center Networking Market size is expected to reach USD 0.79 billion in 2024 and grow at a CAGR of 5.27% to reach USD 1.15 billion by 2030.

In 2024, the Japan Data Center Networking Market size is expected to reach USD 0.79 billion.

Japan Data Center Networking Market Report Snapshots

Japan Data Center Networking Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2030)