Network Equipment Market Expected to Reach $69.7 Billion by 2032—Allied Market Research

According to a new report published by Allied Market Research, titled, “Network Equipment Market," The network equipment market was valued at $29.9 billion in 2022, and is estimated to reach $69.7 billion by 2032, growing at a CAGR of 9.2% from 2023 to 2032.

Companies in the equipment industry design, manufacture, and sell networking equipment and technologies to businesses of all industries that need the infrastructure platforms to connect their devices to each other and to the internet. Infrastructure platforms include switches, routers, data centers, and wireless products. In addition, businesses in the industry earn revenue by selling their products to enterprises, smaller commercial businesses, governments, educational institutions, and service providers. The customers have to choose between purchasing the products and services via perpetual licenses or subscription arrangements. Companies differentiate themselves in this industry by innovating to provide superior products in terms of speed, scale, and security. Customers demand highly secure and reliable connectivity to their networks as they continue to shift to more digital infrastructures and multi-cloud environments.

On the basis of application, the global network equipment market size was dominated by the IT and telecom sector in 2022 and is expected to maintain its dominance in the upcoming years, owing to the surge in need for improvement and optimization of infrastructure among telecom operators and continuous innovation in the IT & telecom sector. IT & Telecom industry is able to focus on providing excellent service to their clients, which would provide lucrative growth opportunities for network equipment market forecast. Moreover, by adopting advanced network equipment technology, the IT and telecom industry quickly deploy dynamic application frameworks that mitigate overall complexity and enhance resource allocation. However, the government and defense sector is expected to witness the highest growth during the forecast period. Network equipment technology enables government employees to supply new capabilities swiftly and easily on demand without relying on overburdened teams. As a result, governments are increasingly turning to network equipment to speed up innovation and deliver important citizen services.

By region, North America dominated the market share in 2022 for the network equipment industry. North America is home to numerous technology giants, contributing to the development and production of cutting-edge network equipment, including routers, switches, wireless technology, and security solutions. The region's ever-expanding adoption of emerging technologies like 5G, IoT, and cloud computing is driving the need for advanced network infrastructure. In addition, factors like the growth of remote work and the surge in online services have fueled the demand for reliable, high-performance network equipment. However, Asia-Pacific is expected to exhibit the highest growth during the forecast period. This region has a robust IT infrastructure and solid software and service offerings, as well as leadership positions in emerging fields including robotics, which is projected to provide lucrative growth opportunities for the network function virtualization market in this region. Moreover, the factors such as rapid proliferation of 4G, 5G in developing countries of Asia-Pacific, increase in subscriber base, favorable government policies and regulations, and demand for higher amount of data storage and security are expected to boost the growth of the region at a considerable pace.

Businesses in all industries are undergoing rapid transformations to their networking and digital infrastructures. These transformations began well before the Covid-19 pandemic but have only accelerated due to work from home trends driven by the virus. As the economy recovers and businesses re-open, enterprises started continuing to invest more in cloud technologies, security software, and Software-as-a-Service (SaaS) because of digital transformations to their operations. Devices and applications are becoming more interconnected through multi-cloud environments, and customers are demanding efficient and secure technology solutions from networking equipment providers. In addition, Covid-19 outbreak also anticipated that businesses will upgrade on-premise information technology equipment as more employees return to work in the latter half of 2021, which are expected to drive growth for hardware infrastructure like routers and switches.

Moreover, the key players in the market adapted various strategies such as product launch and product development to enhance their services and strengthen their position in the network equipment market. For instance, in June 2021, Cisco Systems inc., launched a portfolio of routers to extend the power of the enterprise by expanding network equipment to the edge with the flexibility, security and scalability needed for IoT success. The portfolio enables organizations to run connected operations at scale with a choice of management tools suited for both IT and operations. As a result, the enhancements in network equipment boosted the market demand during the forecast period.

Key Findings of the Study

• By type, the switches segment accounted for the largest network equipment market share in 2022.
• Based on enterprise size, the large enterprise segment accounted for the largest network equipment market share in 2022.
• Depending on application, the IT and telecom sector accounted for the largest network equipment market share in 2022.
• Region wise, North America generated the highest revenue in 2022.

The key players that operate in the network equipment market analysis are Cisco Systems, Inc., Juniper Networks, Inc., Huawei Technologies Co., Ltd., AT&T, Inc., Verizon Communication, Hewlett Packard Enterprise Development LP., Telefonaktiebolaget LM Ericsson, Arista Networks Inc., ZTE Corporation, and Nokia Corporation. These players have adopted various strategies to increase their market penetration and strengthen their position in the network equipment industry.