SP Routing & Ethernet Switching Market Size

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.