SP Routing & Ethernet Switching Market - By Service (Deployment, Operational Management, Product Support), By Technology, By End-use Industry (Automotive, BFSI, Education, Energy, Healthcare) & Forecast, 2024 - 2032

SP Routing & Ethernet Switching Market Size

SP Routing & Ethernet Switching Market was valued at over USD 10.5 billion in 2023 and is estimated to register a CAGR of over 8.3% between 2024 and 2032. The demand for SP routing & Ethernet switching is being propelled by exponential growth in data traffic, primarily fueled by the proliferation of connected devices, the increasing adoption of cloud services, and the emergence of bandwidth-intensive applications such as video streaming, online gaming, and virtual reality (VR). Service providers are constantly seeking to expand their network capacity and improve performance to meet the growing demand for high-speed data transmission.
 

Furthermore, the transition to 5G technology is spurring substantial investments in network infrastructure upgrades, which encompass routers and switches capable of accommodating the elevated speeds and low-latency demands of next-generation networks. Service providers are investing in advanced routing & switching solutions to enable seamless migration to 5G and support new use cases such as the Internet of Things (IoT), smart cities, and autonomous vehicles.
 

Moreover, the shift toward Software-defined Networking (SDN) and Network Function Virtualization (NFV) is augmenting the demand for agile, programmable, and automated networking solutions. Service providers are looking for routers and switches with enhanced programmability and intelligence to enable dynamic service provisioning, network slicing, and efficient resource utilization. In May 2023, Edgecore Networks, a provider of traditional and open network solutions for enterprises, data centers, and telecommunication service providers, launched its newest high-performance enterprise product family, the EPS120 Series. These optimized 1Gbps open switches are ideal for large retailers, campuses, and enterprise branches, offering robust 1G switching performance with high data transmission bandwidth and a large packet buffer to absorb traffic bursts.
 

The rising incidents of technological obsolescence are impeding the SP routing and Ethernet switching market. As innovation progresses rapidly, older equipment may struggle to keep up with the evolving industry standards, performance requirements, and emerging technologies such as 5G and SDN. This can lead to challenges for service providers who may find themselves with legacy infrastructure that lacks the capabilities needed to support modern applications and services. Moreover, the need for frequent upgrades or replacements to maintain competitiveness can increase costs and operational complexities for businesses. Therefore, addressing technological obsolescence is crucial for companies to stay agile and competitive in the dynamic networking landscape.

SP Routing & Ethernet Switching Market Trends

SDN is gaining traction as service providers seek more agile, flexible, and programmable networking solutions. SDN separates the control plane from the data plane, allowing for centralized management and orchestration of network resources. This trend enables greater automation, scalability, and customization of network services, leading to improved operational efficiency and faster service delivery. Furthermore, to cater to the complex requirements of consumers, several companies are striving to launch new products and solutions.
 

For instance, in June 2023, IP-COM introduced its new enterprise routers M80 & M50. The M80 is a Gigabit enterprise router developed for high-requirement users including hotels, enterprises, and community bandwidth operations. The router is furnished with a dual-core special 1.4GHz dual-core network processor with 4GB of high-speed DDR3 RAM. It embraces IP-COM enterprise system firmware utilizing a built-in intelligent AP management system, which can distribute and maintain automatic AP configuration. It enables WEB account password authentication, PPPoE Server access authentication mode, WEB key authentication, and a few other securities that can satisfy the access authentication requirements under different scenarios.
 

Intent-based Networking is emerging as a transformative trend in the industry, promising to simplify network management and operations. IBN utilizes automation, Machine Learning (ML), and Artificial Intelligence (AI) to interpret high-level business intent and translate it into network policies and configurations. By aligning network behavior with business objectives, IBN enhances agility, reliability, and security while reducing manual configuration errors and troubleshooting time. As a result, many service providers are exploring IBN solutions to streamline their operations and enhance customer experience.
 

SP Routing & Ethernet Switching Market Analysis

Based on technology, the market is divided into NAT routing, cut-through switching, fragment-free switching & routing, and store & forward switching. NAT routing is a critical component of the modern networking segment and is expected to register a CAGR of over 8.5% during the forecast period.
 

• Network Address Translation (NAT) routing is a critical component of modern networking infrastructure, particularly in the realm of internet connectivity. NAT operates by translating private IP addresses used within a local network into a single public IP address, which is then used for communication with external networks such as the internet. This translation process enables multiple devices within the private network to share a single public IP address, conserving public IP address space and providing an additional layer of security by hiding internal network topology from external entities.
   
• NAT routing finds extensive uses in both residential and enterprise environments, where it serves as a fundamental mechanism for enabling internet access for multiple users or devices while preserving network security and conserving IP address resources. Additionally, NAT routing facilitates the implementation of various networking features such as port forwarding, load balancing, and Virtual Private Network (VPN) connectivity.
  
   

Based on end-use industry, the market is divided into automotive, BFSI, education, energy, healthcare, and others. The BFSI segment dominated the global market with a share of over 33% in 2023.
 

• In the SP Routing and Ethernet Switching Market, the Banking, Financial Services, and Insurance (BFSI) segment is a significant vertical with unique networking requirements tailored to the specific needs of the industry. These networks cater to retail banking operations such as branch connectivity, ATM networks, online banking platforms, and mobile banking applications. They require secure & reliable connectivity to ensure seamless customer transactions and data protection.
   
• Corporate banking networks support the connectivity needs of large corporations, financial institutions, and business clients. They often require high-speed, low-latency connections for financial transactions, data exchanges, and corporate communication. BFSI organizations utilize data centers and cloud services for the storage, processing, and analysis of vast amounts of financial data. These networks demand high-performance routing and switching solutions to ensure data integrity, availability, and compliance with regulatory requirements.
   

North America dominated the global SP routing & ethernet switching market in 2023, accounting for a share of over 35%. In North America, the SP Routing and Ethernet Switching Market is a dynamic and influential sector at the forefront of networking innovation. With a strong emphasis on technological advancement, the region features a robust infrastructure supporting telecommunications, internet services, and digital transformation initiatives across various industries.
 

Key players, such as Cisco Systems, Juniper Networks, and Arista Networks, drive competition and innovation in the market, offering a wide array of routing and switching solutions tailored to the evolving needs of service providers. The proliferation of 5G networks, increasing demand for cloud-based services, and the rise of SDN are significant trends shaping the market landscape in North America. Additionally, regulatory frameworks set by organizations including the Federal Communications Commission (FCC) and industry standards bodies influence market dynamics, ensuring compliance and interoperability while fostering innovation. Overall, the SP routing and Ethernet switching market in North America continues to thrive, fueling connectivity, innovations, and economic growth in the region.
 

SP Routing & Ethernet Switching Market Share

Broadcom Inc. and Cisco Systems hold a significant share of over 12%. Broadcom is a semiconductor and infrastructure software company that offers a comprehensive portfolio of networking solutions including Ethernet switching and routing products. Cisco Systems is a global technology leader known for its networking hardware, software, and services. The company offers a diverse range of routing and switching products tailored for service providers, enterprises, and small businesses. Cisco's portfolio includes routers, switches, and network management software designed to address the evolving needs of modern networks, such as support for 5G, cloud connectivity, and SDN.
 

Some other major players in the market are Dell Technologies (including Dell EMC and VMware), Ericsson, Huawei Technologies, Juniper Networks, and MikroTik. These players apply strategies such as product innovations, mergers, and acquisitions. Also, companies are involved in several growth & expansion strategies to gain a competitive advantage in the market.
 

SP Routing & Ethernet Switching Market Companies

Major players operating in the industry are:

• ABB Ltd.
• Eaton Corporation PLC
• Ensto Group
• Fuji Electric Co., Ltd.
• G&W Electric Company
• Legrand SA
   

SP Routing & Ethernet Switching Industry News

• In April 2022, Google spent USD 9.5 billion on new Google data centers and offices and unveiled a USD 750 million data center in Nebraska. The massive Google campus in Omaha consists of four buildings totaling over 1.4 million square feet as the demand for Google Cloud services and infrastructure rises. This increased high-speed IP traffic, spiking the demand for enterprise routers.
   
• In May 2022, Huawei Consumer Business Group India launched the latest Huawei Wi-Fi AX3 dual-core router with support for the Wi-Fi 6 standards. The router is claiming, using its own patented Gigahome WiFi chipsets, that it has combined networking technology with the company's proprietary chip collaboration technologies. The Wi-Fi AX3 router features financial-level Huawei HomeSec security safeguards, supplying users with an intuitive, fast, stable, and secure Wi-Fi 6 connection at all times as the connecting hub for Huawei's 1+8+N all-scenario smart life strategy.
   

The SP routing & ethernet switching market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue (USD Billion) from 2018 to 2032, for the following segments:

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Market, By Service

• Deployment service
• Operational management service
• Product support service

Market, By Technology

• NAT routing
• Cut-through switching
• Fragment-free switching & routing
• Store and forward switching

Market, By End-use Industry

• BFSI
• Automotive
• Education
• Energy
• Healthcare
• Other

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• MEA
  • UAE
  • Saudi Arabia
  • South Africa
  • Rest of MEA