Enjoy complimentary customisation on priority with our Enterprise License!
The ethernet switch and router market size is estimated to grow by USD 8.84 billion, at a CAGR of 3.74% between 2023 and 2028. Market growth is influenced by several factors, including the increasing preference for colocation data centers among SMEs seeking cost-effective solutions for their IT needs. Furthermore, the growing adoption of machine-to-machine (M2M) communication drives the demand for reliable data center services to support these connections. Additionally, the rising adoption of cloud-based services fuels the need for scalable and secure data center infrastructure, further boosting the market. The trend towards outsourcing data center services is particularly strong among small and medium-sized enterprises (SMEs) looking to enhance their operational efficiency and focus on core business activities. Moreover, the shift towards digital transformation and the increasing volume of information generated by businesses contribute to the market's growth trajectory.
For More Highlights About this Report, Download Free Sample in a Minute
The report includes a comprehensive outlook on the market offering forecasts for the industry segmented by Product, which comprises ethernet switches and routers. Additionally, it categorizes applications into data centers, carrier ethernet, and others, and covers Geography regions, including North America, APAC, Europe, Middle East and Africa, and South America.
The market share growth by the ethernet switches segment will be significant during the forecast period. Ethernet switches are fundamental networking devices used in local area networks (LANs) to connect multiple devices and facilitate data transfer. They operate at the data link layer (Layer 2) of the OSI model and use MAC addresses to forward data packets efficiently within a network.
Get a glance at the market contribution of various segments Download the PDF Sample
The ethernet switches segment was the largest and was valued at USD 24.66 billion in 2018. Further, ethernet switches offer features like Quality of Service (QoS), Virtual LANs (VLANs), and Link Aggregation (LACP), enhancing network performance, segmentation, security, and bandwidth management. Overall, Ethernet switches form the backbone of modern networks, providing efficient and reliable connectivity while supporting various speeds, configurations, and features tailored to the diverse needs of businesses, data center products, and service providers. Thus, the increase in the use of ethernet switches drives the ethernet switch and router market during the forecast period.
Ethernet switches are used to connect multiple devices on the same network within data centers. Ethernet switches connect servers and create a network of shared resources, allowing devices to share information. Routers are used to tie multiple networks together. Consumers use routers to connect networked servers to the internet. Routers analyze the information that is sent over a network. Further, utilizing the network's powerful security features, integrated multi-cloud capabilities, and predictive intelligence lets it do the heavy lifting. This helps establish a strong foundation with the customers towards a secure access service edge (SASE) architecture. Thus, the segment tends to boost the growth of the ethernet switch and router market during the forecast period.
For more insights on the market share of various regions Download PDF Sample now!
North America is estimated to contribute 41% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. North America dominates the global market because of the increased adoption of data centers that are operated by CSPs, telecommunication service providers, enterprises, and governments. Throughout the projection period, the US's building of new data centers and remodeling of existing ones will probably increase the region's share. The construction of new data centers also includes building colocation facilities through which many small- and medium-sized enterprises (SMEs) can opt for infrastructure that suits their business requirements. Further, another major reason for the rising demand for Ethernet switches and routers across North America is increasing mobile and business data traffic.
In addition, the growing interest and use of social media applications, such as Facebook, Instagram, and Snapchat, resulted in the generation of huge volumes of information. To achieve better connectivity across the network, firms are installing numerous base and carrier stations, especially on campuses, technology parks, stadiums, and places where there are a high number of users. This is expected to create a demand for faster Internet connections, which will drive market growth in North America during the forecast period.
The market in the Asia Pacific region is experiencing rapid growth driven by increasing network connectivity demands and the adoption of digital technology. With the rise of cloud computing and IoT, there's a surge in IT spending to accommodate the growing number of connected devices. The market is witnessing a shift towards 400G and 800G routers to meet the bandwidth requirements of enterprises and online businesses. However, this growth is accompanied by security concerns due to rising cyber threats, leading to increased demand for cloud-based networking solutions. The market is crucial for enhancing network management capabilities and ensuring efficient information transfer and traffic handling, especially in sectors like e-commerce and remote work.
Rising demand for colocation data centers among SMEs is notably driving market growth. A major driver for the market is the increasing demand for colocation data centers among SMEs. SMEs are businesses that employ fewer than 500 people. Because the capital and operating costs of building their data centers are so high, these businesses cannot afford to do so. As a result, they typically choose colocation, where an organization can rent IT infrastructure by its needs. Colocation data centers are steadily taking over the market because they give businesses total control over their IT infrastructure. This includes network connectivity, digital technology, cloud computing, IoT (Internet of Things), traffic management, data transfer, and investment opportunities in the private sector. This is anticipated to spur colocation data center expansion. Multi-tenant colocation data centers are operated by third parties for the benefit of multiple tenants.
Moreover, several routers are installed to carry data packets across various networks to different racks. Ethernet switches are used to eliminate isolated racks and enable communication between all systems so that SMEs can retrieve information. The increased adoption of colocation data centers by SMEs will drive the adoption of routers and ethernet switches. Thus, the rising demand for colocation data centers among SMEs tends to boost the growth of the market during the forecast period.
The advent of ethernet with time-sensitive networking is an emerging trend shaping the market growth. Time-sensitive networking (TSN) is a set of new capabilities; it is an ethernet extension defined by the Institute of Electrical and Electronics Engineers (IEEE). Ethernet with TSN is increasingly finding adoption in industrial applications such as in-process and machine control, where low communication latency and minimal jitter are critical to meeting closed-loop control requirements. TSN is the first fully open, standard, and interoperable way of fulfilling these requirements. End-user industries such as automotive and industrial manufacturing use real-time communication with multiple network devices and will significantly benefit from the advent of the TSN standard.
Further, a key value addition that TSN brings to industrial applications is the ability to drive the unification of networks that were, out of necessity, separate in the past; this enables users to enjoy cost savings as well as performance improvements. TSN can distinguish traffic, assigning individual packets with different priorities and sending each stream over the network while noting individual timing constraints. Such factors are expected to drive the market growth and trends during the forecast period.
Technical and interoperability issues faced during the installation of ethernet switches and routers are a significant challenge hindering market growth. Network infrastructure construction is a challenging task and installation calls for numerous little steps. When SMEs build their network infrastructure, it is less complicated than for large corporations. For everyday tasks, end users greatly depend on the reliable network infrastructure. Any interruption to the infrastructure of a network can harm the network as a whole. For high-speed connectivity, switches and routers are thus integrated into the network infrastructure.
Furthermore, to address interoperability issues, some companies redesign their components to support other companies' networking equipment. This further delays the deployment of network infrastructure. These technical and interoperability issues limit the growth of the market during the forecast period.
The market report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD Billion " for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
You may also interested in below market reports:
The market is experiencing significant growth due to the increasing adoption of 5G technology networks and the expansion of the E-commerce industry. With the rise of IoT-specific protocols and the shift towards distance learning and cloud services, the demand for Asynchronous transfer mode (ATM) & ethernet switch segment and Service provider core router segment is increasing. However, this growth is accompanied by cybersecurity threats, driving the need for encryption, Internet of Things (IoT), firewalls, and intrusion detection systems. The market is also witnessing advancements in bandwidth routers to support the increasing number of Internet-enabled devices. As the demand for high-speed networking solutions and internet connectivity grows, the market is expected to expand further to cater to the needs of data-intensive applications and video conferencing applications.
|
Market Scope |
|
|
Report Coverage |
Details |
|
Page number |
171 |
|
Base year |
2023 |
|
Historic period |
2018-2022 |
|
Forecast period |
2024-2028 |
|
Growth momentum & CAGR |
Accelerate at a CAGR of 3.74% |
|
Market Growth 2024-2028 |
USD 8.84 billion |
|
Market structure |
Fragmented |
|
YoY growth 2023-2024(%) |
2.66 |
|
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
|
Performing market contribution |
North America at 41% |
|
Key countries |
US, China, Taiwan, France, and Germany |
|
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
|
Key companies profiled |
Adtran Holdings Inc., Arista Networks Inc., Broadcom Inc., Cisco Systems Inc., D Link Corp., Dell Technologies Inc., Extreme Networks Inc., Hewlett Packard Enterprise Co., HP Inc., Huawei Technologies Co. Ltd., Intel Corp., Juniper Networks Inc., Netgear Inc., New H3C Technologies Co. Ltd., Nokia Corp., Telefonaktiebolaget LM Ericsson, Tellabs Access LLC, TP Link Corp. Ltd., TRENDnet Inc., and ZTE Corp. |
|
Market dynamics |
Parent market analysis, Market Forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the market forecast period. |
|
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Product
7 Market Segmentation by Application
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Get the report (PDF) sent to your email within minutes.
Get lifetime access to our
Technavio Insights
Quick Report Overview:
Cookie Policy
The Site uses cookies to record users' preferences in relation to the functionality of accessibility. We, our Affiliates, and our Vendors may store and access cookies on a device, and process personal data including unique identifiers sent by a device, to personalise content, tailor, and report on advertising and to analyse our traffic. By clicking “I’m fine with this”, you are allowing the use of these cookies. Please refer to the help guide of your browser for further information on cookies, including how to disable them. Review our Privacy & Cookie Notice.
