Market Trends of New Zealand Data Center Networking Industry
IT & Telecommunication Segment Holds the Major Share.
- The growth of 4G and 5G download speeds, 5G smartphones, coupled with affordable data packs, is projected to drive data consumption among the populace, thereby positively impacting the Indonesian data center market. The increase in smartphone sales from 2016 to 2022, resulting in a rise in average screen time from 45 minutes to 5 hours, has been influenced by the convenience offered by various digital apps. These apps rely on either cloud or data centers to provide services, consequently elevating data center usage and networking solutions, thereby bolstering the market.
- There has been a recent surge in migration to the cloud as companies adapt to more flexible digital workplaces, meeting the rising online demand and remote work requirements. As the foundation of digital transformation, cloud services are predominantly based in data centers. This transition to enterprise cloud solutions propels the growth of the domestic data center market, subsequently increasing the market value of data center networking equipment.
- COVID-19 significantly increased data traffic per smartphone, with OTT consumption rising by 35% from February to April 2020, leading to over 3 hours of average online streaming during the pandemic. This surge in data consumption necessitates improvements in existing data centers and the construction of new ones to meet the escalating demand for data storage and processing. Consequently, data center usage and networking devices' utilization in data centers increase, positively impacting the market.
- Factors such as increasing internet penetration, heightened social network usage, improved automation technology, smart city initiatives, and AI implementation across industries drive investments in data centers.
- Moreover, the growing demand for internet services in Indonesia prompts companies to establish new networks. For instance, in September 2022, Indonesian operator Indosat Ooredoo Hutchison (IOH) announced the launch of a fiber-to-the-home (FTTH) service, branded Indosat HiFi, to cater to the escalating demand for high-speed home internet access. With the internet being a primary requirement for smooth data center operations, coupled with the rise in average broadband speed, especially FTTx, and improvements in digital infrastructure in the eastern region, data center construction projects are expected to focus more on the country during the forecast period. As the number of data centers increases, so does the demand for data center networking in the country.
Understand The Key Trends Shaping This Market
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Ethernet Switches Holds Largest Market Share
- Data center Ethernet switches play a vital role in facilitating efficient and high-speed data transfer within a data center environment. They establish crucial connections between servers, storage devices, and other network equipment, supporting gigabit and multigigabit Ethernet, including 10GbE, 25GbE, 40GbE, 100GbE, and beyond.
- In the global context, sustainability concerns are on the rise, and New Zealand is no exception. The energy-efficient features of Ethernet switches significantly contribute to the overall energy effectiveness of data centers, aligning with sustainability objectives.
- New Zealand is witnessing robust business growth and an increased demand for data, mirroring global trends. Ethernet switches enable scalability, allowing data centers to expand and adapt to evolving requirements without compromising performance.
- The country's digitalization drive and increasing Internet penetration, which saw a 0.8% year-over-year growth from 2022 to 2023 with a user base of 4.99 million, signify the growing need for faster connectivity. The proliferation of 4G and 5G networks, reaching speeds of 66 Mbps and 431 Mbps, respectively, by 2029, reflects the technological advancements. Notably, Vodafone recorded the highest average 5G download speed at 253.8 Mbps for users with compatible devices between January and March 2022. Moreover, the burgeoning e-commerce sector amplifies the demand for storage facilities, consequently driving the need for more data centers and, in turn, Ethernet switches.
- Market leaders prioritize updating network devices to meet escalating demands. For instance, in July 2023, Broadcom introduced the software-programmable Trident 4-X7 Ethernet switch ASIC to cater to the surging need for 400G connectivity in enterprise data centers, aligning with the increasing bandwidth requirements.
