The European enterprise networking infrastructure market is set for robust growth in 2023, with a year-on-year increase of 18.9 percent, reaching a total value of $14.3 billion, according to the latest Worldwide Ethernet Switching, WLAN, and Router Trackers released by the International Data Corporation (IDC).
The report highlights the increasing demand for enterprise networking technologies, including Ethernet switches, WLAN (Wireless Local Area Network), and routers, as pivotal tools driving digital transformation and facilitating the implementation of artificial intelligence (AI) within organizations.
In 2022, vendors of enterprise networking technologies experienced an exceptional surge in revenue, largely attributed to clearing unprecedented backlogs. This momentum carried into the first half of 2023, resulting in substantial market growth. Although a dip is projected for 2024, with an expected decline of 7.6 percent due to the absorption of backlogs, the compound annual growth rate (CAGR) for the 2022-2027 period is anticipated to remain positive.
Peter Kosinar, the program manager at IDC Europe, commented on this trend, stating, “Strong revenue growth for Ethernet switching and enterprise WLAN continued in the first half of 2023, which led us to revise the 2023 forecasts significantly upwards from the previous release. We expect growth in these markets to decelerate in the second half of 2023, eventually turning to negative figures in 2024, mainly due to temporary market saturation after backlogs have been cleared, as well as increased IT budget constraints and the worsening macroeconomic situation in key European countries.”
The report further notes that non-datacenter Ethernet switches have witnessed exceptional growth within the enterprise networking infrastructure market in 2023, attributed to the backlog clearing. Datacenter Ethernet switches also exhibited strong performance.
Demand for enterprise WLAN technology is predicted to remain robust throughout 2023. However, the enterprise router market is expected to experience a moderate decline over the five-year forecast period, primarily due to the competitive influence of Software-Defined Wide Area Network (SD-WAN) infrastructure.
The findings of the IDC’s latest trackers emphasize the central role played by networking technologies in advancing digital transformation and fortifying organizations’ capabilities to harness the potential of artificial intelligence. While the market may face temporary challenges, the long-term outlook remains positive, underscoring the resilience of the European enterprise networking infrastructure sector.