Market Trends of United Kingdom Data Center Networking Industry
IT & Telecommunication Segment Holds the Major Share.
- Emerging technologies and convergence of technologies such as artificial intelligence, Internet of Things, and machine learning will enable further growth in cloud computing and drive the development of the UK cloud computing market over the next five years.
- With cloud storage, the customer or company uses the provider's servers and hardware to store their data or run their systems. Some colocation providers not only offer data center hosting for customer systems, but also offer managed services that isolate virtualized workloads in a multi-tenant server environment.
- Encouragingly, the United Kingdom is doing exceptionally well in growing broadband internet connections. The government is to make a 5G signal available to most of the population by 2027, 15 million more premises connected to full fiber by 2025, and total fiber coverage throughout the country by 2033.
- Cloud adoption by UK businesses is over 50%, and adoption of cloud computing has been escalating over the years. In 2016, 30% of all UK businesses purchased cloud computing services via the Internet, but this share has risen to 44% in 2018 and 62% in 2020. In June 2022, the UK government announced that the value of cloud services for 2021-2022 will exceed GBP 280 million (USD 353.30 million). Through the G-Cloud Procurement Framework, in just the fiscal year.
- In March 2022, Amazon Web Services (AWS) doubled its investment in the UK by investing GBP 1.8 billion (USD 2.24 billion) in UK cloud computing infrastructure over the next two years. AWS is a cloud provider, but it faces increasing competition from tech giants Microsoft and Google in a battle for enterprise customers. Such developmental aspects are expected to further complement the growth of the data centers in the region and substantiate the growth of network devices and services in the market.
Understand The Key Trends Shaping This Market
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Ethernet Switches Holds Largest Market Share
- In the United Kingdom, the importance of Ethernet switches in data center facilities is multifaceted because they are essential in ensuring efficient, reliable, and secure operations. The backbone of a data center's network is an Ethernet switch that facilitates communication between servers, storage devices, and other networking equipment. In order to enable data flows in the facility, it provides necessary connectivity.
- London is a global financial center, and the financial services sector relies heavily on data center infrastructure. Ethernet switches are essential in providing low latency and high throughput for financial transactions, trading platforms, and networking financial data processing.
- Demand for a robust data center infrastructure is driven by the growing adoption of cloud services in the United Kingdom. Ethernet switches are essential to support cloud computing and hosting services, which facilitate the efficient allocation of resources and the storage of data.
- The increasing focus on digitalization, Internet penetration (Internet penetration stood at 97.8% by the start of 2023 with 0.3% growth between 2022 and 2023), and the United Kingdom is the fourth-largest market for e-commerce. In 2021 and 2022, consumers across the UK were turning toward e-commerce, and over 85% of UK residents are shopping online across the country, creating more need for storage facilities, resulting in huge demand for data centers and, consequently, the need for more ethernet switches within data centers.
- The key players in the market focus on updating the network devices to meet the market demand. In November 2022, Siemens introduced the new generation of Siemens Industrial Ethernet Switches that strengthens OT/IT collaboration. The new switches are replacing the current Scalance X-300 series and carry a model name of 'Scalance XCN 300' in the compact version as well as Scalance XR305XRM for 19-inch versions.
