Enterprise Routers & Switches Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Enterprise Routers & Switches Category Overview

The enterprise routers & switches category is anticipated to grow at a CAGR of 6.30% from 2023 to 2030. In 2022, the category size was estimated to be valued at USD 50.50 billion. The demand can be attributed to the growing digital transformation initiatives; a trend accelerated by the pandemic has led to the emergence of new network requirements. Router and switches provide the networking infrastructure required to connect and manage the diverse digital assets. The increasing number of remote and hybrid work models also fuels the demand for robust and scalable networking solutions. Handling of large data volumes, ensuring network security, IoT connectivity, meeting industry specific needs are the factors driving the category growth.

The introduction of Gigabit Ethernet switches is one of the most important developments in industrial ethernet switch technology. These switches represent a significant advance over the conventional 10/100 Mbps ethernet switches by handling data transmission at speeds of up to 1 Gigabit per second. Another revolutionary development is the fusion of switches and Internet of Things (IoT) technology. IoT-enabled switches can link a variety of equipment and sensors, enabling the collection and analysis of data in real time. This connectivity enables businesses to closely monitor their operations, spot potential problems earlier, and take data-driven decisions to increase operational effectiveness. Araknis Networks, a networking company, introduced new switches and routers for high-speed processing and communication. These devices are compatible with the OvrC cloud management platform. Industrial manufacturing giant, Siemens in February 2023 has launched a private industrial 5G router, a crucial part of the manufacturing sector's digital revolution.

The category is highly fragmented in nature. The requirement for the products at an enterprise level is company-centric and specific. As such, the product needs to be tailored according to the customer’s specifications. The category is flooded with suppliers providing a variety of products with diverse specifications. Numerous technology vendors and manufacturers offer a wide range of options with different features, performance levels, and pricing structures. Rapid technological advancements such as software-defined networking (SDN), network virtualization, etc. result in a wide array of options enhancing competition. Innovative solutions by new entrants further diversify the category. Suppliers collaborate to offer integrated solutions. In April 2023, Huawei Technologies, a large multinational technology business, signed a partnership with TD Africa for Small and Medium Enterprises (SMEs) access to cutting-edge technology. The agreement covers smart storage and the newest networking technology.

The major cost component of the category is hardware. The level of performance, processing power, and features offered by the products can significantly influence its cost. High-performance devices with advanced capabilities generally come at a higher price. The number and type of ports (ethernet, fiber-optic, etc.) also impacts the price. Modular routers and switches with features of expansion and scalability often have a base unit cost along with additional costs for expansion modules or line cards. It’s essential to consider other factors as well, such as ongoing support and maintenance, software licensing, scalability, and compatibility. Price of low-cost business-grade routers with strong VPN compatibility, improved security, and business application range from USD100 to USD200. Switch hardware typically costs between USD250 to USD450. The starting price for HPE Aruba, the HPE’s networking division, is USD79.99. Price of hardware from Juniper Network starts from USD2,300. The starting price for Netgear routers is USD55.99.

The category sourcing needs to involve a strategic approach for selecting and procuring networking equipment that aligns with the organization’s requirements, scalability, budget and integration with existing infrastructure. Evaluate the long-term costs, including hardware, software licenses, support, maintenance, and potential upgrade. Link speed is a crucial parameter when selecting switches. There are three different speed categories to take into account: 10/100 mbps a slower option, 1000 mbps (or 1 Gbps) a meeting point between speed requirements and cost effectiveness and 10 Gbps. In the Asia-Pacific region, a wide variety of businesses engaged in manufacturing and supplying these products can be found in nations including China, Taiwan, South Korea, and Japan. 

Enterprise Routers & Switches Procurement Intelligence Report Scope