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Data Centre Networking Market to Boom due to 5G Adoption

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Amber Jackson February 13, 2024 5 mins

Given the continued demand for data processing and communication services, 5G technology can help to improve operational efficiency within data centre facilities

According to Kings Research, the data centre networking market is projected to reach a US$38.33bn revenue by 2030, given the rise of 5G technology adoption

The data centre networking market is expected to experience a corporate annual growth rate (CAGR) of 7.53% by 2030 – bringing the overall revenue to US$38.33bn.

Globally, the data centre networking market was valued at US$21.43bn in 2022. A recent report published by Kings Research finds that North America is leading the market as the widespread application of 5G technology continues to rise.

Data centre networking refers to the integration of networking resources within a data centre facility that facilitates the storage and processing of applications and data. Juniper Networks says a network consists of switches, routers and other hardware components that work together to provide the connectivity and security needed to run applications and process data.

Increased use in cloud services drives network expansion

Kings Research attributes the rapid growth of the data centre networking industry to the surge in data centre virtualisation and increased advanced data centre operating models. Additionally, it refers to the expansion being primarily driven by the need for real-time user interaction and the optimisation of on-demand services in diverse organisations.

Modern data centre networks incorporate virtualisation to support applications and workloads across both physical and multi-cloud environments. As well as relying on physical components, networks also depend on software such as management and automation systems. As a result, data centre systems can deliver data and services for end users.

Increased customer use of artificial intelligence (AI) and cloud services across a wide range of key industries has also prompted networking expansion. With these new technologies continuing to be in high demand worldwide, data centres are continually working to expand their capabilities to keep pace.

Given the continued demand for data processing and communication services, 5G technology can help to improve operational efficiency within data centre facilities. Combining 5G and data centres can help businesses tap into low latency, high speeds and the large bandwidth that 5G can offer.

Additionally, 5G can also contribute to cloud and sustainability solutions. According to industry leader Verizon, combining a 5G data centre with a traditional cloud-computing environment offers companies innovative processing for advanced analytics in the cloud.

Transforming the telecommunications sector

Data centre networking consists of intricately interconnecting various network components, including routers, switches, firewalls, load balancers and storage systems, to establish a robust and expandable network framework within the data centre.

It plays a pivotal role in ensuring that data and communication across critical data centre assets flows seamlessly.

Its significance extends to bolstering the performance of data-intensive applications, ensuring uninterrupted operation, and facilitating the smooth functioning of IT services. Within this framework, data centre switches assume a central role, via forwarding network data packets and ensuring connectivity among devices within the data centre.

Kings Research also found that the IT and telecommunications sector accounted for the largest market share in data centre networking in 2022. It attributes this growth to factors such as a rise in telecom subscribers and the widespread use of smartphones, which generate more data and increase demand for data centre network solutions.

With the ever-increasing demand to optimise network performances, companies are keen to enhance their services to provide better and more widespread connectivity.

Scientists compute with light inside hair-thin optical fiber

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Victoria Masterson, Heriot-Watt University

Light traveling through an optical fiber sitting on top of a conventional electronic circuit board. Credit: Heriot-Watt University

Scientists at Heriot-Watt University in Edinburgh, Scotland, have found a powerful new way to program optical circuits that are critical to the delivery of future technologies such as unhackable communications networks and ultrafast quantum computers.

“Light can carry a lot of information, and optical circuits that compute with light—instead of electricity—are seen as the next big leap in computing technology,” explains Professor Mehul Malik, an experimental physicist and Professor of Physics at Heriot-Watt’s School of Engineering and Physical Sciences.

“But as optical circuits get bigger and more complex, they’re harder to control and make—and this can affect their performance. Our research shows an alternative—and more versatile—way of engineering optical circuits, using a process that occurs naturally in nature.”

Professor Malik and his team conducted their research using commercial optical fibers that are widely used around the world to transport the internet to our homes and businesses. These fibers are thinner than the width of a human hair and use light to carry data.

By harnessing the natural scattering behavior of light inside an optical fiber, they found they could program optical circuits inside the fiber in highly precise ways.

The research is published today in the journal Nature Physics.

From left to right—Beyond Binary Quantum Information Lab (BBQLab) members Dr. Saroch Leedumrongwatthanakun, Professor Mehul Malik and Ph.D. student Suraj Goel. Credit: Heriot-Watt University

“When light enters an optical fiber, it gets scattered and mixed in complex ways,” Professor Malik explains. “By learning this complex process and precisely shaping the light that enters the optical fiber, we’ve found a way to carefully engineer a circuit for light inside this disorder.”

Optical circuits are critical to the development of future quantum technologies—which are engineered on a microscopic level by working with individual atoms or photons—particles of light. These technologies include powerful quantum computers with immense processing power and quantum communications networks that can’t be hacked.

“Optical circuits are needed at the end of quantum communications networks, for example, so the information can be measured after it’s traveled long distances,” Professor Malik explains.

“They are also a key part of a quantum computer, where they are used for performing complex calculations with particles of light.”

Quantum computers are expected to unlock big advances in areas including drug development, climate prediction and space exploration. Machine learning—artificial intelligence—is another area where optical circuits are used to process vast volumes of data very quickly.

Professor Malik said the power of light was in its multiple dimensions.

“We can encode a lot of information on a single particle of light,” he explained. “On its spatial structure, on its temporal structure, on its color. And if you can compute with all of those properties at once, that unlocks a massive amount of processing power.”

The researchers also showed how their programmable optical circuits can be used to manipulate quantum entanglement, a phenomenon when two or more quantum particles—such as photons of light—remain connected even when they’re separated by vast distances. Entanglement plays an important role in many quantum technologies, such as correcting errors inside a quantum computer and enabling the most secure types of quantum encryption.

Professor Malik and his research team in the Beyond Binary Quantum Information Lab at Heriot-Watt University conducted the research with partner academics from institutions including Lund University in Sweden, Sapienza University of Rome in Italy and the University of Twente in The Netherlands.