The last couple of decades have witnessed a broad sweep of technological developments in computer networking. Computer networking speeds are accelerating significantly beyond the standard 10-Gigabit Ethernet (GbE). From data transmission speeds of 100 megabits per second to 10 gigabits per second to now over 100 gigabits per second, networking speeds have been evolving in sync with growing business needs. The massive data explosion triggered by bandwidth heavy multimedia content, such as, video, voice, multimedia, has and will continue to throw the focus on data transfer rate capability of computer networks.
The continuously growing numbers of users sharing a network, use of advanced applications (i.e. internet-based applications, video communication), faster desktop PCs, and faster network servers, all of which contribute to traffic congestion, are creating a dire need for networks to support gigabit transmission speeds. This insatiable need for faster and faster transmission speeds is forecast to continue gathering momentum as businesses adopt bleeding edge networking technologies, such as, data warehousing, cloud computing, server virtualization, all of which have immense resource demands i.e. higher storage needs, and bandwidth-hogging applications.
Against this backdrop, the network and data communications equipment market is opening up fast due to rising need for connectivity, new applications based on Internet Protocol (IP) and concerns of business firms for security of business data. The market segments of wireless LAN (Local Area Network) equipment continue to expand, as it provides higher mobility and in turn, a greater flexibility within an organization. In order to make use of faster Ethernet technologies such as Gigabit Ethernet and Fast Ethernet, LAN hardware has begun to shift from hubs to switches, which provide faster inter-connections.
In the Router segment of the market, there is increased demand for the gigabit IP products arising out of the increased use of RAS (Remote Access Servers), VPN (Virtual Private Networks), switching and importance of security issues. However, competitive prices in lower-end product segment are expected to act as a hindrance. The increased need for Remote Access Connectivity, e-commerce, Intranets and Internet, is expected to generate additional demand for greater bandwidth and higher speed in the LAN market. In the communications segment, increasing demand for high-speed connection, greater bandwidth and uninterrupted connectivity increases the growth potential of this segment. Even though analogue modems still hold a major share in the developing countries, sales of ADSL routers and modems have improved substantially in recent years.
The depressed economic climate forced companies to reduce their budgetary outlays, and critically re-evaluate their network operations, and infrastructure during 2008 & 2009. This pruning down of investment outlays to hedge the financial weakness in the market as well as in the balance sheets eroded shipments of networking hardware and software products. Thanks to resurgence in economy and sustained growth in the corporate sector, network spending increased over the last few years and will continue to grow in the short to medium term period, which augurs well for networking equipment and products market.
About 52% of enterprises are planning to increase their network equipment spending in the short to medium term, which augurs well for future of this market. Realizing the benefits of having strong network connectivity, SMBs, which hitherto stayed away from making huge IT infrastructure investments too are gradually increasing their network spending. Healthcare, Financial services, and the government sector will be major target markets for network equipment vendors, as these segments will continue to remain major spenders. Network security, Wireless LAN, VoIP and WAN optimization will be some of the major investment areas in network market.
After witnessing a temporary deceleration in growth during 2009, the world market for Ethernet Switches is back on growth track, thanks to resurgence in deployments of data centers, including using 10-Gigabit Ethernet in modular, Top-of-Rack and blade switches. With data/traffic saddled networks are pouring in 10GbE is increasingly becoming insufficient, and advancements in Ethernet will continue to play an ever-bigger role in handling rising data traffic on the Internet. With the ink barely dry on the newest 40GbE and 100GbE technology standard, potential evolution of 400GbE and 1TerabitE, the next rate of Ethernet speed, is already creating a flutter.
Huge pent-up demand and the growing need among enterprises to upgrade existing networks in order to ease congestion have and will continue to drive demand for both wired and wireless Ethernet switching. Having realized that effective communications among employees and uninterrupted access to IT applications will play a major role in enhancing organization productivity and competitiveness, enterprises across the globe have been expanding their existing network coverage, including mobile access, there by driving demand for efficient network hardware. Europe continues to remain the largest regional market for ICT Networking Equipment and products; Asia-Pacific however is the fastest growing regional market. Switches and Routers represent the most prominent product segments in the global ICT Networking Equipment and Products market.
The research report titled “Networking Hardware and Software: A Global Outlook” announced by Global Industry Analysts, Inc., provides a collection of statistical anecdotes, market briefs, and concise summaries of research findings. The report offers a rudimentary overview of the industry, highlights latest trends and demand drivers, in addition to providing statistical insights. Regional markets briefly abstracted and covered include United States, Europe (Spain, United Kingdom, France, and Germany). Asia Pacific (China, Hong Kong, India, Korea, and Taiwan) Middle East (UAE) and Latin America (Brazil, Venezuela) The report offers a compilation of recent mergers, acquisitions, and strategic corporate developments. Also included is an indexed, easy-to-refer, fact-finder directory listing the addresses, and contact details of companies worldwide.