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The ethernet switch and router market size is estimated to grow at a CAGR of 3.74% between 2023 and 2028. The market size is forecast to increase by USD 8.84 billion. The growth of the market depends on several factors, including rising demand for colocation data centers among SMEs, growing adoption of M2M communication and increased adoption of cloud-based services. The Ethernet switch is a type of network hardware that is vital to networking and the internet. Ethernet switches enable communication between cabled devices in an Ethernet LAN, such as computers, servers, Wi-Fi access points, Power over Ethernet (PoE) lighting, and Internet of Things devices. Routers are packets that contain a variety of data types, including files, communications, and straightforward transmissions like web interactions, router guides, and direct network traffic. Identification details about the sender, the type of data, its size, and most importantly its destination IP (Internet protocol) address are all contained in one of the layers, or sections, of the data packets. After reading this layer, the router sorts the data according to priority and selects the optimal path for each transmission.
The report includes a comprehensive outlook on the ethernet switch and router market offering forecasts for the industry segmented by Product, which comprises ethernet switches and routers. Additionally, it categorizes Application into data centers, carrier ethernet, and others, and covers Geography regions, including North America, APAC, Europe, Middle East and Africa, and South America. The report provides market size, historical data spanning from 2018 to 2022, and future projections, all presented in terms of value in USD billion for each of the mentioned segments.
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Rising demand for colocation data centers among SMEs is notably driving market growth. A major driver for the global ethernet switch and router 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 own 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 in accordance with its needs. Colocation data centers are steadily taking over the market because they give businesses total control over their IT infrastructure. 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 global ethernet switch and router 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 growth of the global ethernet switch and router market 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 ethernet switch and router market during the forecast period.
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.
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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 centers, 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 with each other. Routers are used to tie multiple networks together. Consumers use routers to connect networked servers to the internet. Routers analyze the data 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 data center segment tends to boost the growth of the ethernet switch and router market during the forecast period.
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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 data. 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 Ethernet Switch and Router 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 Ethernet Switch and Router 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.
Adtran Holdings Inc. - The company offers ethernet switch and routers such as NetVanta 1570 24 370W, NetVanta 1560 48 740W, and NetVanta 1560 48 370W.
Arista Networks Inc. - The company offers ethernet switch and routers such as Arista 7010 Switch, Cognitive Wi-Fi, and Arista 7050X Series.
Broadcom Inc. - The company offers ethernet switch and routers such as RoboSwitch, StrataDNX, and BCM95352GR.
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 ethernet switch and router market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018-2028
Ethernet Switch And Router 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 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 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. |
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