Ethernet Switches, Routers & WLAN Market in India

Anusha S NavaneethanResearch Analyst

26 July 2016

Table of Contents

1. India Networking Market

2. Switches and Routers• Major Players• Market Trends• Technology Trends

3. WLAN• Major Players• Market Trends• Technology Trends

4. Future of Networking Market

India Networking Market

• Enterprise IT spending is growing at a CAGR of 12% from 2010-2015 and was USD 50 billion in 2015

owing to the growing operational needs of businesses and the advent of the internet of things (IoT).

• Other driving factors that has catapulted the growth are:

• Data center build outs

• Rising penetration of cloud computing

• Big data solutions.

• Smartphones and Laptops

• 4G services rollout, Shared last mile FTTx

• Telecom, Government, BFSI, Healthcare, Hospitality, Education, Manufacturing, Retail, Professional Services are embracing the possibilities of networking paradigm.

• The Ethernet switch and router market together garnered USD 180 million in revenue during Q4-

2015. The WLAN market in India grew 19% year-on-year during Q4 2015, and garnered USD 53.41

Million as end-user revenue.

Switches and Routers

Ethernet switch & Routers market landscape

Escalating number of internet subscribers in the country coupled with increasing adoption of advanced network solutions by the Corporate and Enterprise segment have fuelled the growth Ethernet Switches and Routers in the Indian Market. Additionally, rapid developments in telecom infrastructure along with technological advancements in communication and networking industry have accelerated the sales of these devices in the country

• The Ethernet Switch market witnessed a year-on-year growth of 6.8 percent (in vendor revenue) and stood at USD 108.2 Million in Q4-2015

• The Router market witnessed a significant year-on-year growth of 32 percent and stood at USD 72.4 Million in terms of vendor revenue as on Q4-2015

• Significant growth was seen in L4-7 switches and routers category

• Organizations are increasingly taking interest in the third platform technologies to leverage its benefits from

• Workforce optimization

• Supply chain

• Customer experience and efficient resource utilization.

Major Players

The Market leader is Cisco, with sales of Ethernet switches and router being around USD 88 million during Q3 2015, Juniper is in the second place with USD 9 million in sales. other leading players are Hewlett-Packard, Huawei and Alcatel-Lucent.

Players such as Motorola address only the router market while other players focus on the low end router and switches markets

The Ethernet Switch market clocked end-user revenue of USD 134.5 million during Q3 2015, with a quarter-on-quarter growth of 5.8 percent and year-on-year by 2.5 percent

Cisco, 66.50%

Juniper, 7.80%

HP, 6.60%

Huawei, 3%

Alcatel-Lucent, 1.70%

Others, 14.30%

Ethernet Switch & Router Market in India Q3 2015Vendor Revenue ($M)

Source: IDC

Market Trends

• National Optic Fiber Network Project (NOFN)• Plan to connect all the 2,50,000 Gram panchayats in the country, connectivity is available in

all State Capitals, Districts, HQs • The NOFN project is estimated to cost about Rs. 20,000 Cr, which will benefit Telecom Service

Providers(TSPs), ISPs, Cable TV operators and Content providers to upgrade/scale up their Network infrastructure

• 4G Services• Move to an end-to-end IP wireless network. As a result, Telecom Service Providers(TSPs) are

scaling up their Network Infra to meet the future demand

• Internet of things (IoT)• Manufacture/Pharma companies and Education system are evaluating Digital ecosystem &

rolling out IoT to increase productivity and user experience

• Government projects• Ministry of Urban development has proposed to develop 100 Smart cities• Ministry of Power has taken up 14 Smart Grid pilots with average Customer base of around

20000 each.• Ministry of Road transport has mandated that all commercial passenger vehicles of more than

22 seating capacity be enabled with GPS, emergency calls etc.

Technology Trends (Routers and switches)

• Makers of switch hardware and operating systems are scrambling to support 25/50/100 GbE, which is poised to replace its 10/40/100 GbEcousin in hyper-scale data centers cos its • More power efficient • Performance (high-end servers can push 40, 50, or even 80Gb/s)• Cost ( less expensive to use 25GbE, which provides 2.5x more

bandwidth over the same number of wires and switch ports)

• SDN-Software Defined Networking (SDN) has had a considerable impact on the router and switch market. The switch manufacturers are making their hardware more accessible through Application Program Interface (API) which exposes their configurable elements. This transition in design offers flexible and application-driven customization of network infrastructure.

WLAN

The WLAN market landscape

• The WLAN market in India grew 19% year-on-year during Q4 2015, and garnered USD 53.41 Million as end-user revenue

• WLAN market in India is driven by growths in Education, Managed services and communication and media verticals.

• Increased demand on enterprise WLANs will be driven by enterprise mobility and deployments of IoT applications.

• The WLAN market is expected to further grow on the back of increasing devices, need to stay connected and government's initiatives to facilitate Wi-Fi on a large.

• The WLAN market is also expected to grow in single digit in terms of compound annual growth rate (CAGR) for 2015–2020. Uptake from SMB and Wi-Fi hotspot demand from various cities would drive incremental growth in the near future.

Major Players

• D-Link continued to lead the market with 30% share followed by Cisco and TP-link.

• Home and Education segments contributed to more than 80% of the market.

Cisco, 22.90%

D-Link, 30.50%TP-Link, 12.40%

HPE, 9.30%

Netgear, 9%

WLAN Market in India Q4 2015Vendor Revenue ($M)

Source: IDC

Market Trends

• Growing requirement for smartphones, tablets, laptops, and media-intensive applications in business environments are putting greater, and different, demands on the enterprise WLAN.

• Government initiatives• Installing Wifi Hot spots across Train station and Airports • Digital India initiative is likely to kick off with a big bang plan to roll out free

Wi-Fi internet connections in 2,500 cities and towns across the country

• IoT is revolutionising in India in below sectors• Healthcare• Housing• Safety and security• Transport and automobiles• Energy conservation and Agriculture

Technology Trends (WLAN)

• Wireless technologies that are coming to market, including 802.11ac Wave 2.

• MU-MIMO.

Future of Networking Market

• The Networking segment in India is witnessing strong traction, with Government initiatives driving digital usage in the country. Large enterprises and SME’s are continuing to invest in upscaling network infrastructure as the size of business operation multiplies. All this has resulted in huge business opportunity for networking vendors

• The growing need to support diverse networks of wired and wireless devices has kept the enterprise networking market on an upward trend and also as an area of constant focus for IT and network managers. Additionally, increasing preference for built-in multiple capacity integrated devices, capable of supporting 3G/4G services, load balancing, content processing capabilities, etc., have catapulted the demand of sophisticated router and switching equipment.

• The demand for routers and switches in the country has been steadily rising over the years, barring 2012 when the telecom industry was impacted by the global recession. The market for Routers/Switches in 2012 was 0.33 million units, which is expected to reach 0.059 million units in 2015 growing at a CAGR of 21.4 per cent.

• There is no domestic manufacturing competency present of the manufacturing of routers and switches.