The global enterprise networking market size was USD 40.06 billion in 2015.Increasing need for enterprises to become digital to remain competitive is expected to increase the impetus for agile networking and increase the value and importance of virtual and software-defined networking. Companies are focusing on upgrading their networks to increase wireless capacity. Moreover, they are spending money to modernize their system, which is expected to fuel enterprise network demand over the forecast period.
The industry is anticipated to witness growth owing to ongoing technological innovations in wireless LAN technology and high-speed Ethernet switches. This technology is leading to the development of smaller and efficient chipsets and modules with added functions. Escalating needs for implementation of high-speed Ethernet switches are expected to provide new growth avenues over the next eight years.
Organizations are overhauling their networks with a focus on improving efficiency and responsiveness of business, enabling mobile productivity and leveraging big data.
Increasing shift towards wireless adoption, expanding the mobile workforce, rising bandwidth requirements and growing base of mobile internet devices are the key factors which are expected to drive demand. Growing adoption of virtualization technology and high demand for internet-enabled devices is expected to also contribute efficiently to industry growth.
The market is migrating from a single-vendor environment to the one in which discrete decisions for different network building blocks are rapidly becoming the norm. For network architects, is a new approach which is expected to lead to network solutions, meeting business requirements and saving money, without adding operational complexity.
Equipment segment analyzed in the report includes Ethernet switch, enterprise routers, WLAN and network security. Ethernet switch accounted for over 40% of the global revenue share in 2015 and is expected to continue being the dominant segment in terms of revenue by 2024.Shifting preference towards better performance and high-speed data are expected to drive the Ethernet switches consumption.
WLAN is expected to be the fastest growing segment over the forecast period. Increasing demand for wireless equipment from small and medium enterprises is projected to augment the demand for WLAN equipment. Many users bring their personal devices into the enterprise and access corporate applications to help improve their productivity. It has provided the impetus for enterprise IT to extend or deploy new WLANs.
Network security is expected to emerge as a promising segment over the forecast period owing to high demand for data security and privacy. Moreover, enterprises are broadly spending on cloud infrastructure and budget allocation towards WLAN, switches, and network monitoring. This rise in spending on branch office infrastructure is anticipated to augment the demand for networking equipment.
U.S. enterprise networking market by equipment, 2012 - 2024 (USD Million)
Being a lucrative industry for electronic devices such as routers and switches, as well as a promising regional sector for industrial manufacturing, the Asia Pacific enterprise networking market contributed to over 35% of the global revenue in 2015. Outsourcing of manufacturing activities to low-cost developing countries in Asia is expected to witness strong demand for high-quality precision equipment in this region. Robust development of IT sector and tremendous appetite for technologically advanced devices in the Chinese market are expected to boost regional growth over the next seven years.
Free trade agreements with the U.S., Canada, Japan, and the European Union have propelled the manufacturers to start manufacturing and assembly of electronics components in countries such as Brazil and Mexico. This has resulted in the high adoption of enterprise networking devices in the Latin American region. Rising trends towards the adoption of 802.11ac wireless standard are further expected to trigger growth in Asia Pacific and Latin American region.
Competitive Market Share Insights
The global enterprise networking company market share is mainly occupied by key competitors such as Cisco Systems, Alcatel-Lucent, Hewlett-Packard and Brocade Communications Systems. These players are involved in collectively striving to make enterprise networking a part of varied electronic devices and simplify its integration in various systems.
Shifting consumer preferences from wired to wireless LAN systems are enabling key players to offer innovative WLAN equipment. Companies are also focusing on developing strategic partnerships and acquisitions to gain a competitive advantage. For instance, in 2015, HP announced the acquisition of Aruba Networks. The acquisition further strengthens the positioning of HP to accelerate and enable the enterprise transition to a converged campus network.
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