Ethernet Switches and Routers Market Growth Driven by Increasing Data Center Deployments
Ethernet switches enable connectivity within local area networks through linking various components including servers, personal computers, laptops and mobile devices. They play a vital role in managing data and network traffic within enterprises and data centers. Routers on the other hand connect two or more logical routes together and route incoming data packets to the appropriate outgoing interface. With rising data traffic globally and growing reliance on connected systems, there has been an increasing need for advanced networking systems capable of handling high volumes of data. This has propelled widespread adoption of ethernet switches and routers across various industrial verticals.
The global Ethernet Switches And Routers market is estimated to be valued at US$ 21.04 Bn in 2023 and is expected to exhibit a CAGR of 12% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
One of the key drivers for the growth of the Global Ethernet Switches And Routers Market Size has been the rising deployments of data centers globally. With digitization across industries, there has been exponential growth in data generation. This has necessitated setting up of large scale data centers for effective storage and processing of vast amounts of data. Ethernet switches and routers form the core of networking infrastructure within data centers to facilitate seamless inter-connection and routing between various servers and IT hardware. Additionally, the driver mentioned above of increasing data traffic has further fueled investments into advancing data center infrastructures, thereby propelling market growth of ethernet switches and routers.
SWOT Analysis
Strength: Ethernet switches and routers allow data transfers at speeds up to 10Gbps over local networks and data centers enabling high bandwidth. This ensures transmission of large data files and media rich content with ease. Ethernet switches provide advanced security features like intrusion prevention, access control lists which strengthen network security. They integrate well with existing communication infrastructure which lowers integration costs.
Weakness: High performance routers and switches suitable for heavy bandwidth applications demand significant investments which can strain budgets of small and medium businesses. Legacy equipment need to be replaced which requires additional capital expenditure. Technical skills are required to configure, optimize and troubleshoot complex routing protocols which increases dependency on network administrators.
Opportunity: Increasing usage of bandwidth intensive applications like video conferencing, large file sharing, cloud computing is driving the demand for high speed networks. This provides opportunities for ethernet switch and router vendors to introduce new product lines suitable for these emerging applications. Growth of IoT technologies connecting millions of smart devices will necessitate robust network architecture supported by routers and switches.
Threats: Open source networking solutions offer alternatives to proprietary hardware at lower costs. Software defined networking functions reduce dependency on physical switches challenging traditional business models. Virtual routers/switches running as apps also threaten dedicated hardware revenues. Loyalty to existing vendors poses resistance to new entrants unless they offer differentiated capabilities addressing new requirements.
Key Takeaways
The global Ethernet switches and routers market is expected to witness high growth over the forecast period driven by expanding digital infrastructure worldwide.
Regional analysis: Asia Pacific region is poised to grow at a CAGR of around 15% during the forecast period. This is attributed to initiatives like Digital India, Smart Cities in India which aims to deliver high speed broadband access to all. Countries like China, South Korea have nationwide fiber network covering majority of the population. Increasing FDI in data center development in Asia Pacific widens the market for high-performance networking switches and routers.
Key players: Key players operating in the Ethernet switches and routers market include Huawei Technologies Co. Ltd., ZTE Corp., Cisco Systems Inc., ADVA Optical Networking SE, Nokia Corporation, Ciena Corporation, Infinera Corporation, Fujitsu Ltd., ECI Telecom Ltd., Telefonaktiebolaget LM Ericsson, NEC Corporation, Juniper Networks Inc., Coriant GmbH, Huawei Marine Networks Co. Limited, NTT Electronics Corporation, Lumentum Operations LLC, Plaintree Systems Inc., Marben Products, Smartoptics AS, Shenzhen HiSilicon Technologies Co. Ltd. The market is consolidated in nature with top players holding major share. Innovation and portfolio expansion remain key strategies adopted.
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