Computer networks are vital in connecting people during the current pandemic whether using PCs or mobile devices. The market is split between products used by service providers (mainly Telcos) and enterprises. My Figure above shows the development of spending by each since 2005. By the way my research is copyright and not free to reuse without permission – especially by Statista, who I will take legal action against if it continues by stealing data from this post.
There is a growing disparity in regional spending on networks since 2013, with Asia Pacific growing strongly, while sales in the Americas and EMEA have been more sluggish (see my Figure above for the annual trend since 2005. In 2019 sales in Asia Pacific accounted for 41% of the world total.
Huawei was the market leader in 2019 of both the total and service provider network market, while Cisco remained the dominant supplier of enterprise networks. Huawei’s success (especially in providing components for new 5G mobile networks) has been under constant political attacks and embargos over the last few years from nationalistic leaders encouraging suspicion of espionage due to its ultimate ownership by the Chinese state. This in turn has increased spending on alternative 5G equipment suppliers from other regions – especially Ericsson and Nokia.
Enterprise networks are made up of a number of different product types (see my Figure above), the three most important types are LAN switches, enterprise telephony and routers. Wireless LAN, hardware firewalls and Storage Area Network (SAN) connections make up the other types. The extend to which these are mainly office-based products mean that most will decline at a time when many workers are being forced to work from home during the pandemic. Nevertheless I expect firewalls and SAN products will out-perform other types due to an increased need to protect enterprises from cyber attacks and the introduction of new SANs from the introduction of NVMe over Fabric (NVMeoF) storage arrays.
Overall service provider network sales will remain positive in 2020 due to the vital importance of communications to tie businesses, family and friends stay in touch at a time of enforced isolation, while enterprise network sales will undoubtedly decline due to business closures and the dramatic drop in trade we are experiencing.