India’s Enterprise Networking Market has grown by 17.1% in the 2021 fiscal, according to latest numbers by market research firm IDC. The networking market includes the likes of Ethernet switches, routers, and WLAN products.
However, the growth is attributed to a weak 2020 where the sales were below par owing to the pandemic. The pent-up demand from the companies caused the first half of 2021 to have significant spending, with a refreshed focused on IT infrastructures.
IDC expects the ethernet switch, router, and WLAN markets to grow in single digits till 2026, with adoption of Cloud, IoT and mobility driving incremental revenues. IDC also predicts large investments to compliment 5G rollouts in the next couple of years.
The vendor ecosystem in India currently faces issues of semiconductor shortage, which has led to an exponential increase in the lead times for shipping. This shortage led to increased logistics costs, which lead to increased prices for network infrastructure prices, IDC said.
The network switching business saw a 13.5% uptick during the third quarter of 2021, while the non-domain controller business witnessed 21.8% growth owing to corporates investing ahead of opening up businesses in January 2022.
The key verticals that contributed to this are banking, telecommunications, professional services and process manufacturing.
“The impact of semiconductor shortage on network infrastructure was significant this quarter. Vendors were struggling to meet the market demand, thereby expanding the lead times drastically. However, this also acted as an indirect catalyst where enterprises planned for their future needs in advance and placed orders to avoid unplanned delays,” said Sudharsan Raghunathan, Senior Market Analyst, Enterprise Networking, IDC India.
On the other hand, the Indian router market expanded by 45.4%, with service providers investing heavily in routing hardware, mostly aimed at optimising capacities and ramping up infrastructures for 5G rollouts for late 2022.
The WLAN segment was the worst sub-performer, declining by 1.7%, however, this is due to the demand for consumer routers dropping by 20.1%, while the same for the enterprise segment grew at 27.3%.
The shortage of chips has also led Wi-Fi 6 to become the de facto technology in the enterprise segment, along with increased interest for cloud-managed wireless products, which are sought after for easier deployment and management.
“The overall market encompassing all elements of networking bounced back strongly to pre-pandemic levels for the first time in six quarters anticipating 2022 to be a year of growth. The Non-DC/campus market will act as the key factor determining the course of the market,” added Raghunathan.
The ethernet switch market registered a 13.5% growth and clocked $156.1 million in terms of vendor revenue. This segment was dominated by Cisco, with a market share of 59%, followed by HPE and Juniper with 4.5% and 4.4% respectively.