Skip to main content

The Unruly Transition to Software Defined Networking

The traditional enterprise networking market will continue to evolve as more companies deploy new technologies to increase overall efficiency and productivity, drive revenue growth, and secure their essential network infrastructure.

The overall enterprise networking market will grow at a 5.9 percent CAGR through 2018, reaching $99 billion in revenue -- due to double-digit CAGRs in the wireless networks and security segments, according to the latest global market study by Technology Business Research (TBR).

Fueled by a 7.2 percent CAGR, professional services will become the largest revenue segment by 2018, as vendors such as Cisco evolve their legacy hardware-based business models to facilitate engagement with Line-of-Business buyers through a services-led approach.

Traditional hardware segments -- such as IP network infrastructure and unified communications and collaboration -- will grow at low single-digit rates due to the ongoing adoption of cloud computing and software defined networking (SDN).

"Cisco will remain the overall market share leader by a wide margin, holding 44 percent of the market in 2018 as the company leverages its industry-leading base of channel partners to drive sales of its broad portfolio of products and services," said Scott Dennehy, senior analyst at TBR.

However, according to the TBR assessment, the Cisco market share will very likely erode due to the negative impact of their customer's eager adoption of SDN. The unruly transition to open source software solutions and white-box open hardware platforms is unstoppable.

With the rapid deployment of cloud services and SDN -- and a shift in IT procurement towards productivity solutions and business outcomes -- savvy enterprise network vendors will choose to evolve their business models away from proprietary legacy hardware components.

Vendors that are unable to rapidly shift their business models away from hardware will experience steady market share losses. These vendors will likely be acquired by other networking players or private equity firms that can fold the existing intellectual property into their portfolios.

The APAC market will experience the strongest growth of all regions through 2018 -- at a 10.5 percent CAGR -- primarily driven by demand in emerging markets.

By contrast, improved spending in developed markets such as the U.S. and western Europe will contribute to mid single-digit CAGRs in the Americas and EMEA.

TBR believes that enterprise networking vendors will invest in emerging markets across Latin America, eastern Europe, the Middle East and Africa, and APAC, even though many of these regions will not produce immediate financial returns.

As larger countries such as China, India and Brazil become saturated, vendors will turn their attention to second-tier markets including Southeast Asia and Argentina, Colombia and Peru in Latin America.

Popular posts from this blog

Digital Talent Demand Exceeds Supply in Asia-Pac

Even the savviest CEO's desire for a digital transformation advantage has to face the global market reality -- there simply isn't enough skilled and experienced talent available to meet demand. According to the latest market study by IDC, around 60-80 percent of Asia-Pacific (AP) organizations find it "difficult" or "extremely difficult" to fill many IT roles -- including cybersecurity, software development, and data insight professionals. Major consequences of the skills shortage are increased workload on remaining digital business and IT employees, increased security risks, and loss of "hard-to-replace" critical transformation knowledge. Digital Business Talent Market Development Although big tech companies' layoffs are making headlines, they are not representative of the overall global marketplace. Ongoing difficulty to fill key practitioner vacancies is still among the top issues faced by leaders across industries. "Skills are difficul

Mobile Device Market Still Awaiting Recovery

The mobile devices market has experienced three years of unpredictable demand. The global pandemic, geopolitical pressures, supply chain issues, and macroeconomic headwinds have hindered the sector's consistent growth potential. This extremely challenging environment has dramatically affected both demand and supply chains. It has led to subsequent inflationary pressures, leading to a worsening global cost of living crisis suppressing growth and confidence in the sector. In tandem, mobile device industry stakeholders have become more cautious triggering market uncertainties. Mobile Device Market Development Operating under such a backdrop, the development of mobile device ecosystems and vendor landscapes have been impacted severely. Many of these market pressures persisted throughout 2022 and now into 2023, borne chiefly by the smartphone market. According to the latest worldwide market study by ABI Research, worldwide smartphone shipments in 2022 declined 9.6 percent Year-over-Year

Global Digital Business and IT Consulting Outlook

Across the globe, CEOs and their leadership teams continue to seek information and guidance about planned Digital Transformation initiatives and the most effective enterprise organization change management practices. Worldwide IT and Business Services revenue will grow from $1.13 trillion in 2022 to $1.2 trillion in 2023 -- that's a 5.7 percent year-over-year growth, according to the latest market study by International Data Corporation (IDC). The mid-term to long-term outlook for the market has also increased -- the five-year CAGR is forecast at 5.2 percent, compared to the previous 4.9 percent. Digital Sevices & Consulting Market Development IDC has raised the growth projection despite a weak economic outlook, because of vendor performances across 2022, growth indicators from adjacent markets, increased government funding, and inflation impacts. The actual 2022 market growth was 6.7 percent (in constant currency), which was 87 basis points higher than forecast last year, alth