31 Mar 2021

Enterprise Networking Market Shows Signs of Recovery, Noted a Marginal 4.2% YoY Decline In 4Q20: IDC India

NEW DELHI, March 31, 2021: India’s overall networking market which includes Ethernet Switch, Routers, and WLAN segments witnessed a 4.2% year-over-year (YoY) decline in Q4 2020 (Oct-Dec) according to latest release by International Data Corporation (IDC).

The decline during Q4 2020 was majorly characterized by the decline in switching revenues. The switching business in India declined by 11.1% YoY during the quarter. The market for routing was stagnant with a marginal decline of 1% YoY. However, from a sequential standpoint the router market expanded by 30% during Q4 2020 mainly attributed by the telecom service providers.

Despite a growth of 8.8% in the WLAN segment, the enterprise class WLAN segment continues to remain the most affected networking segment with a significant decline of 26.3% YoY owing to the slowdown in campus investment caused by COVID-19. However, the sluggish enterprise class market was compensated by the growth of consumer gateway routers with a staggering 57.8% YoY growth during Q4 2020. The growth in the consumer gateway routers was due to the remote working and online schooling requirements.

The ADC market also posed a significant growth during Q4 2020 with a YoY growth of 22.9%. The ADC segment is starting to see good traction in terms of virtual appliances to cater to the workloads shifting to the cloud. Key verticals for the ADC business include banking, professional services, and government.

India Ethernet Switch Market Q4 2020

According to IDC’s Worldwide Quarterly Ethernet Switch Tracker, the Q4 2020 Ethernet Switch market in India stood at USD 126.9 million (by vendor revenue) registering a YoY decline of 11.1%. Decline in the switching segment was majorly characterized by the Non-DC segment. The decline was due to the COVID impact and variations in refresh cycles. Professional services, manufacturing, and banking were some of the key business verticals that maintained their spending. Manufacturing showed strong signs of recovery with investments from multiple sub-segments like automobiles, pharma, hi-tech, etc. However, government business continued to be slow with some key business being pushed to CY 2021.

Despite the market showing signs of recovery, business returning to per-COVID levels is still uncertain with India suspected to move into the second wave of the pandemic.

    

Cisco continued to dominate the Ethernet Switch market with a 51.8% share during Q4 2020, followed by Hewlett Packard Enterprise (HPE), and Huawei.

India Router Market Q4 2020

According to IDC’s Worldwide Quarterly Router Tracker, the India Router market stood at USD 75.0 million (by vendor revenue) with a marginal YoY decline of 1.0% in Q4 2020. However, from a sequential point of view the market grew by 30% majorly driven by the telecom service providers. Telecom vendor investments were pertaining to cater to the additional bandwidth requirements driven by the work from home scenario. Professional services and banking were the key business verticals during Q4 2020. Investment from government remained slow during Q4 2020. Business for routers is expected to recover with telecom vendors investing for 5G rollouts in India.

Cisco leads the router market with 55.1% market share in Q4 2020 followed by Nokia and Juniper.

India WLAN Market Q4 2020

According to IDC’s Worldwide Quarterly Wireless LAN (WLAN) Tracker, the Indian WLAN market had a YoY growth of 8.8% during Q4 2020. The market stood at USD 61.7 million (by Vendor Revenue) majorly contributed by consumer gateway routers. While enterprise class WLAN took a significant decline of 26.3% YoY, the consumer gateway router demand picked rapidly by 57.8% YoY to support the growing demand of employees and students working out of their homes.

Enterprise class WLAN remains to be most affected segment since the COVID-19 driven lockdown owing to the drop in campus investments. However, the market is opening with multiple enterprises looking out to adopt cloud-driven WLAN that will enable management efficiency.

Manufacturing and professional services are the top verticals contributing to the enterprise WLAN business with investments coming from automobiles, and pharmaceutical enterprises. Business from other key verticals like government and education remained slow.

With a market share of 33.2%, TP-Link was the market leader in the WLAN segment during Q4 2020, followed by D-Link due to the rapid increase in demand for consumer gateway routers. Cisco and Hewlett Packard Enterprise were the key vendors driving the market for enterprise class WLAN during Q4 2020.

Sudharsan Raghunathan, Senior Market Analyst, Enterprise Networking, IDC India says, “With more and more applications moving into cloud, the demand for software defined technologies like SD-WAN is gaining significant adoption in India. The networking ecosystem is undergoing a paradigm shift in terms of vendors partnering with multiple cloud providers that enable seamless access to IaaS and SaaS applications in a secured manner. The usage of on-ramps for cloud has played a very important role in connecting branch sites to cloud applications effectively. The prolonging remote working scenario will also promote more cloud delivered models of SD-WAN wherein employees working from home would be able to access cloud applications without hardware dependency”.

IDC India Forecast

The Ethernet Switch, Router, and WLAN market are expected to grow in single digits in terms of compound annual growth rate (CAGR) for 2018–2023. Increased adoption of emerging technologies such as cloud, IoT, mobility, etc. would drive incremental revenues. IDC also expects large investments for 5G rollouts in the next couple of years.

About IDC Trackers

IDC Tracker products provide accurate and timely market size, company share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC's Trackers are updated on a semi-annual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly excel deliverables and on-line query tools. The IDC Tracker Charts app allows users to view data charts from the most recent IDC Tracker products on their iPhone and iPad.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly-owned subsidiary of International Data Group (IDG), the world's leading tech media, data and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC  and LinkedIn. Subscribe to the IDC Blog for industry news and insights: http://bit.ly/IDCBlog_Subscribe.

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