26 Jul 2017
SYDNEY July 2017 – The Australian enterprise wired Ethernet switch market is feeling the impact of cloud computing with a 21% year-on-year and 12% quarter-on-quarter decline for the first quarter of the 2017 according to the latest IDC Worldwide Quarterly Ethernet Switch, Router and WLAN Tracker. The first quarter of 2017 was the worst year-on-year and quarter-on-quarter decline since 2015. Previous declines could be linked to events such as federal elections but this decline is systemic and driven by the Australian enterprise maturing and moving workloads to both public and private clouds.
"We're not seeing deployments of switches on premises like we did in the past," said IDC market analyst Ahmar Karimullah. “This has two effects, one is less switches in the enterprise, and the other is better utilisation of ports already deployed. Combined with SDN overlays infrastructure is being more efficiently used.”
Growth is predicted to be flat through to 2021 with a compound annual growth rate (CAGR) of less than 2 percent which will take the Aussie market to over $700M by 2021. Wireless continues its march to become the defacto last metre connection technology in the commonwealth and has shown five percent year-on-year growth, with no indications of growth being tamed. IDC predicts 9.9% compound annual growth rate between 2017 and 2021 with the market being worth AUD$283 M by then. 802.11ac Wave 2 is helping vendors move product as the enterprise seeks better capacity in what is an increasingly mobile workforce, there is also interest in location based services and the analytics that they bring.
"While increasing capacity is king, embedding of location based services directly in the access point is very attractive for organisations wanting to understand both users and non fixed devices connected to the network," said Karimullah.
Software is taking control of the wireless LAN and the management of devices that connect to it. WLAN management software is increasing control and bringing more flexibility and agility to the access network and with the rise software defined networking, IDC expects to see SDN controller software more integrated into WLAN offerings from vendors. "Software defined architectures help drive capacity utilisation, as we continue to see SDN deployed we expect this will impact on total ports deployed as infrastructure is more efficiently utilized," added Karimullah.
IDCs Worldwide Quarterly Ethernet Switch, Router and WLAN Trackers covers 8 major regions and 60 countries, Australia being one of them. The market is further split by product (Layer 2, ADC, high-end, mid-range, low-end, SOHO, Dependent APs, Controllers), deployment (service provider, enterprise, consumer), and the measurements are in vendor revenue, value, and unit/port shipments.
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