India’s network market grew 5% year-on-year in Q1 2021: IDC
The Indian networking market, which includes Ethernet switches, routers, and WLAN segments, experienced 5.1% yoy marginal growth in vendor revenue in the first quarter of 2021, according to International Data Corporation (IDC) .
The marginal growth can be attributed to the easing of Covid-19 restrictions in several parts of the country after the first wave of the pandemic.
âGovernment has been one of the key verticals that have contributed to this growth with several federal and state government institutions investing in network infrastructure. However, most of those investments were pent-up demand that was postponed until 2021 due to the pandemic, âIDC said.
The Switching business in India saw negligible 0.8% year-over-year growth in the quarter. Non-DC switching business grew 10% year-on-year due to a long gap due to reduced lockdown restrictions and campuses starting to invest more in switching infrastructure. Government, professional services and telecommunications were the main verticals contributing to switching.
The Indian router market grew 4.7% year-on-year. The growth in the routing segment was mainly attributed to the enterprise segment, with a substantial increase of 63.4% year-on-year. Besides telecommunications, other key verticals for routing include government, banking and business services, according to the report.
The WLAN segment experienced significant growth of 17.3% year-on-year after a long gap due to Covid.
âBoth corporate and consumer WLANs have grown, thanks to the growth in the number of corporate access points that were considerably small compared to consumer gateway routers. With the release of Covid restrictions, campuses have started investing in enterprise-class access points for future hybrid work needs, âhe said.
Consumer gateway routers grew 29.5% year-over-year. However, the demand for consumer routers fell 22.7% from last quarter.
Indian Ethernet Switch Market
According to IDC’s Worldwide Quarterly Ethernet Switch Tracker, the Ethernet switch market in India was $ 133.3 million (by vendor revenue), registering a marginal annual growth of 0.8% in the first quarter 2021.
The gradual lifting of restrictions in several major cities during most of the first quarter resulted in substantial growth in non-DC business (10% year-on-year growth). However, the DC switching activity decreased by 9.8 percent.
âGovernment verticals have shown strong signs of recovery with several large deals. These are investments that have been postponed to 2021 due to the impact of the pandemic. In addition to government professional services, the telecommunications and manufacturing verticals contributed to switching revenues in the first quarter of 2021, âthe report said.
In terms of major players, Cisco continued to lead the Ethernet switch market with a 56.5 percent share in the quarter, followed by Hewlett Packard Enterprise with a 6.1 percent share. It was followed by FS, Arista and Huawei with respectively 3.1%, 2.9% and 2.8% market share.
Router market in India
According to IDC’s Worldwide Quarterly Router Tracker, the Indian router market was worth $ 72.5 million (by vendor revenue) with marginal annual growth of 4.7% in the quarter.
Similar to the switchover, the lifting of lockdowns in many parts of India led to several business plans that had been put on hold in previous quarters and finally materialized in the first quarter. The corporate routing business has grown significantly with an annual growth of 63.4 percent.
âTelecom provider investments were down 17.2% year-on-year, with carriers primarily investing in updates and bandwidth optimization requirements caused by the work-from-home scenario. Public sector investment picked up in the first quarter of 2021, making it one of the main business sectors monitored by the bank, âthe report adds.
Cisco led the market with a 63.6% market share, followed by Juniper with 14.3% market share. Nokia, Huawei and Ericsson followed with 12.9%, 5.5% and 0.4% respectively.
WLAN market in India
The Indian WLAN market grew 17.3% year-on-year in the first quarter of 2021, according to IDC’s Worldwide Quarterly Wireless LAN Tracker. The market was worth $ 58.3 million (based on vendor revenue).
Enterprise-class WLAN saw a strong recovery of 7.4% year-on-year and 20.8% in QoQ after a slow 2020. It was then that companies embraced hybrid as the future of work with significant investments made by professional services organizations during the first quarter of 2021.
âManufacturing has also been a major contributor to enterprise-class access point revenues with investments in pharmaceuticals, automobiles, and industrial durables. The activities of vertical sectors such as education and hospitality have remained stagnant, âthe report said. IDC expects investment in enterprise-class access points to slow again, with India entering the second phase of lockdown in the second quarter of 2021.
Consumer Gateway Router business grew 29.5% year-over-year to meet growing demand for employees and students working from home. However, from a quarterly point of view, gateway router business declined 22.8%, due to the oversupply available in the market.
âThe pandemic has also acted as a catalyst in driving cloud-managed wireless among Indian businesses. India has also seen a substantial increase in the adoption of Wi-Fi 6 among businesses over the past year, âhe said.
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With a market share of 27.2 percent, TP-Link was the market leader in the WLAN segment during the quarter. In the enterprise-class WLAN segment, Cisco was the market leader with a 16.7 percent market share, followed by HPE with 16 percent. Both suppliers showed a strong recovery in the first quarter of 2021.
Other major players include Hewlett Packard Enterprise, Netgear and D-Link with 16%, 7.6% and 7.1% market shares respectively.
Sudharsan Raghunathan, Senior Market Analyst, Enterprise Networking, IDC India, says: âIndian companies have clearly understood that the future of work is ‘hybrid’. Even companies that envisioned a full work-from-home scenario in 2020 have started devising strategies to get employees back to the office safely. This will contribute to a rapid rebound in the campus networking segment. Wireless will play an important role in contact tracing applications when employees return to the office. “
He added, âThe willingness of businesses to use Wi-Fi 6 has also increased dramatically over the past year, which has also driven the demand for multi-Gig switches. With India currently facing the second wave of the pandemic, investment in networks is expected to slow in the next quarter. However, IDC expects network investments to rebound faster after the second wave of the pandemic compared to last year. “
According to IDC, the Ethernet switch, router and WLAN markets are expected to grow single-digit in terms of compound annual growth rate (CAGR) for 2018-2023. The increased adoption of emerging technologies such as cloud, IoT, mobility, etc. would lead to additional revenue. IDC also expects significant investments for the deployment of 5G over the next two years.