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Networking market declines 30.6% in Q3

Networking market declines 30.6% in Q3
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Highlights

However, it grew 13% q-o-q due to year-end pressure to exhaust yearly IT budgets

New Delhi: India's networking market, which includes Ethernet Switch, Routers and WLAN segments, witnessed a 30.6 per cent Year-over-Year (YoY) decline in the third quarter (Q3) of 2019, said a new report by International Data Corporation (IDC) on Tuesday.

According to the market research firm, Cisco leads the router market with 63.1 per cent market share, followed by Nokia and Juniper.

Cisco also continued to dominate the Ethernet Switch market with a 57.4 per cent share, followed by Hewlett Packard Enterprise (HPE) and Huawei.

The July-September quarter saw a decline which was majorly contributed by the router segment due to strong investments that happened during 2018.

However, when compared with Q2, the Indian networking market grew by 13 per cent. The growth was mainly due to enterprises starting to exhaust their yearly IT budgets and governments beginning to start IT procurement post elections.

"The advent of IoT in Indian enterprises has enabled multiple organisations to build use cases around smart processes and improve interoperability.

However, increased network speed and lower latencies are crucial for attaining maximum advantage," Sudharsan Raghunathan, Senior Market Analyst, Enterprise Networking, IDC India, said in a statement.

"5G would act as a catalyst in driving the adoption of IOT, thereby enabling Indian enterprises to revisit their approach towards their existing networking architecture/infrastructure."

According to IDC's "Worldwide Quarterly Ethernet Switch Tracker", the Q3 Ethernet Switch market in India stood at $149.1 million (by vendor revenue) registering YoY decline of 7 per cent.

A decline of 10 per cent in the L3 switching segment primarily contributed to the trend. Top spending for switching segment in 3Q19 came from services, telecom finance and government.

The Ethernet Switch, Router, and WLAN market are expected to grow in single digits in terms of compound annual growth rate (CAGR) for 2018-2023.

Increased adoption of emerging technologies such as Cloud, IoT, mobility, etc, would drive incremental revenues. IDC also expects large investments for 5G rollouts in the next couple of years.

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