India’s networking market, which includes ethernet switch, routers, and WLAN segments, witnessed a growth of 17.1 per cent year-on-year in terms of vendor revenues in Q3 CY21 according to data from the International Data Corporation (IDC).
“The elevated y-o-y growth can be attributed to a weak base due to Covid-19 in the previous year and the country witnessing significant economic activity after the second wave of the pandemic. The pent-up demand from enterprises that stalled digital spending during the first half of 2021 started to revive infrastructure spending,” the report said.
“However, the vendor ecosystem faced challenges in terms of the semiconductor shortage, thereby exponentially increasing the shipping lead times. The prices for most network infrastructure components increased due to this shortage coupled with increasing logistics costs,” it added.
India Ethernet Switch market
According to IDC’s Worldwide Quarterly, Ethernet Switch Tracker, the ethernet switch market in India stood at $156.1 million (by vendor revenue) in Q3 2021, a y-o-y growth of 13.5 per cent. The enterprise investment in non-DC switching grew at a 21.8 per cent y-o-y. This is due to the trend of hybrid work and pent-up demand from the first half of the year which is now coming up, as per the report. The DC switching segment grew at a marginal 3.8 per cent y-o-y.
The top verticals for the market were professional services, banking, telecommunications, and process manufacturing during the quarter.
Cisco gained a significant chunk of the market with a market share of 59 per cent, followed by HPE at 4.5 per cent. Juniper came in third with a market share of 4.4 per cent, followed by Huawei at 3.8 per cent and Arista at 2.7 per cent.
India router market
As per IDC’s Worldwide Quarterly Router Tracker, the India Router market stood at $83.9 million (by vendor revenue) with a strong y-o-y growth of 45.4 per cent in Q3 2021.
“The noticeably high growth was due to the weak base caused during the first wave of the pandemic,” as per the report.
Both the enterprise and service provider investments in routing grew by 21.6 per cent and 69.4 per cent y-o-y, respectively.
“The telecom vendor investments were mostly centered around refreshes, bandwidth optimisation requirements, building edge clouds, investments ahead of 5G rollouts etc. While enterprises were focused on regular refreshes of their routers and upgrading branch infrastructure with solutions such as SD-WAN which would aid them with better QoS (quality of service), easier deployment, management, and help them achieve cost savings without compromising on branch security,” the report said.
Key investment areas apart from telecom included professional services, process manufacturing, banking.
Cisco lead the router market with a 66.8 per cent market share during the quarter followed by Nokia and Juniper at 15.2 per cent and 10.8 per cent, respectively. Huawei’s share stood at 3.8 per cent.
India WLAN market
The WLAN segment in India declined marginally by 1.7 per cent y-o-y (by vendor revenue).
Amid a shift in the demand dynamics between enterprise and consumer router segments as offices plan to open, enterprise segment grew at 27.3 per cent y-o-y, and consumer routers declined at 20.1 per cent y-o-y.
“However, the decline in the consumer segment was slower than anticipated due to the holiday season in India,” as per the report, causing the segment to still grow significantly at 37.4 per cent quarter-on-quarter.
According to IDC’s Worldwide Quarterly Wireless LAN Tracker, the Indian WLAN market had a marginal y-o-y decline of 1.7 per cent during 3Q21, majorly driven by the consumer wireless segment. The market stood at $59.9 million (by vendor revenue).
“Within the enterprise segment, businesses across verticals like manufacturing have been growing significantly over the last few quarters with the economy opening up and organisations looking to improve connectivity for manufacturing efficiency that results in better business results,” it said.
The enterprise class WLAN grew 27.3 per cent y-o-y. Wi-Fi 6 contributed to 63.6 per cent of revenues in the overall enterprise WLAN.
“The technology is gaining faster penetration due to the delay in shipments of the older generation of access points,” as per the report.
“Wi-Fi 6 is slowly starting to make inroads in the consumer segment, while Wi-Fi AC continues to dominate this segment. With offices planning to be opened in January 2022, we expect the market for consumer routers to get even slower,” it added.
With a market share of 28.7 per cent, TP-Link was the market leader in the WLAN segment during the quarter. Within the enterprise class WLAN segment Cisco was the market leader with a 22.9 per cent market share, followed by HPE with 10.0 per cent.
Sudharsan Raghunathan, Senior Market Analyst, Enterprise Networking, IDC India, said, “The impact of semiconductor shortage on network infrastructure was significant this quarter. Vendors were struggling to meet the market demand, thereby expanding the lead times drastically.”
“However, this also acted as an indirect catalyst in some cases where enterprises planned for their future needs in advance and placed orders to avoid unplanned delays. The overall market encompassing all elements of networking bounced back strongly to pre-pandemic levels for the first time in six quarters anticipating 2022 to be a year of growth. The Non-DC/campus market will act as the key factor determining the course of the market. However, a lot depends on the new variant of the virus and its impact on the Indian enterprises,” Raghunathan added.
