Networking Market Expected to Grow in the Coming Quarters, says IDC India
20 Jul 2015
According to International Data Corporation (IDC), CY 2014 was one of the best years for the Networking market (LAN and WLAN included) in India with over 20 percent growth year on year, a similar pattern is expected in CY 2015 as well on the back of government initiatives and organizations willing to invest in future technologies.
According to IDC’s APeJ Quarterly Switch and Router tracker, the Ethernet Switch market clocked end-revenue of USD 124.0 million during Q1 2015, with a slight decrease quarter on quarter (-0.8%) but impressive growth year on year (15.1%). The Router market stood at a total of USD 69.4 million, a -13.6% growth year on year and 3.0% quarter on quarter.
Yet again, Cisco retained its dominance in the Switch & Router market, increasing its revenue quarter on quarter as well as year on year. Revenue from the Telcos and refresh business from well established traditional clientele remained the key for vendor's growth. Apart from traditional verticals, Education vertical provided a sustained demand to the market during Q1 that is further expected to grow with the start of new sessions.
Organizations are increasingly taking interest in the third platform technologies to leverage its benefits in workforce optimization, supply chain, customer experience and efficient resource utilization. On the same lines, higher enterprise spending coupled with 3G/4G upgrades/new rollouts and increasing broadband penetration is set to push growth further in CY 2015.
The IP-based security-surveillance market is also likely to take a faster route giving vendors, small or big, an opportunity to grow. Further, the SMBs are likely to offer similar growth to the market and the verticals, like any other traditional segment to benefit from mobility and network optimization solutions.
Since Q1 2014, the WLAN market is increasing both quarter on quarter and year on year with the highest revenue coming in CY 2014. The WLAN market in India clocked an 8.9% growth quarter on quarter and 37.1% year on year during Q1 2015, according to IDC’s Quarterly APeJ Wireless LAN tracker and registered USD 45.1 million as end-user revenue. Though WLAN market in India continues to be driven by the traditional contributors like Education and Professional Services, the increasing deployments of Hotspots by the Government and Telcos to get new avenues of revenue streams are likely to contribute an additional stream Q2 2015 onwards. Education remained the most promising vertical with growth investments from new universities and colleges as well the old ones towards the upgrade/refresh.
Suman Bisht, Market Analyst - Enterprise Networking and UC&C, IDC India says,“ The success in hardware market is a blend of technology, partner ecosystem, cost competence and of course marketing. To woo the spoilt-for-choice customer, the vendors are aggressively working with the national and regional partners to get the edge over competition. The solutions such as BYOD, traffic offloading, surveillance and IoT are beginning to be visible in the market and start contributing towards an incremental revenue stream.”
Gaurav Sharma, Research Manager, Enterprise Computing, IDC India, comments, “Government initiatives and increasing adoption of third platform by the enterprises is pushing the need for smart network solutions that can sustain the growth of unstructured network traffic. Upcoming verticals like e-commerce, healthcare and hospitality along with traditional ones are expected to drive future investments."
IDC India Forecast
Investments in not just the green-field but refresh projects, specifically from large enterprises and Telcos, are expected to define the market during CY 2015. A pro-business environment, inexorable demand for data and need for smart devices have become the cardinal points for the Telcos and the enterprises that is pushing them to invest more in infrastructure. NFV and SDN are likely to find more visibility, as several vendors and customers from different verticals vie to consolidate their market position, hence resulting in more number of PoCs or even initial roll-outs in the coming quarters.
On the access side, the Education, Manufacturing and SMBs are likely to remain mainstream in the coming quarters as well.The growing space of e-tailers is promising huge opportunities for the enterprise infrastructure market in India. From the Telco side, the investments from the service providers are likely to remain high given the competition, impending expiration dates of the spectrum and threats of new players. Tech-savvy campuses, wi-fi enabled stations, broadband highways, wi-fi hotspots are the prospective segments in the direction of the digital infrastructure development and rollouts that will further push the demand for network infrastructure investment.
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