Integrated Players Reign
Heightened compliance and enterprise security needs in view of ongoing digital transformations gave end-to-end players an extra edge
In a dynamically changing business world, a rising demand to stay connected, be it for work or personal needs, keeps growing. Enterprise networks are key enablers of the converging data, voice and multimedia needs of today’s businesses. A growing penetration of smartphones, tablets, and other mobile devices is increasing the need for internet-based data usage, even to the point of choking networks. The growth in data consumption and the need for connectivity is also on the verge of yet another round of spurt, with machine-to-machine (M2M) and internet of things (IoT) networks appearing on the horizon. M2M connections are expected to be driven by sectors such as home security, building automation, healthcare, and consumer electronics; while the IoT segment drivers would include wearables that are going mainstream, apart from applications such as smart metering, smart buildings, et al. All these deepen the need and scope for seamless connectivity and information sharing.
LAN versus WLAN
From an equipment standpoint, the enterprise networking market continues to be split into wireline and wireless, or LAN and WLAN. Despite some cannibalization, the two continue to coexist and stay relevant. While WLAN offers enterprises a minimalist and de-cluttered communication environment along with the added advantage of seamless mobility, the LAN technologies continue to come with a maze of wires and cables, but offer extended security, control, scale, speed and reliability.
When it started, the IEEE 802.11 was touted as the beginning of the end of wired Ethernet. Successive refinements in WLAN
system like silicon, radio design, network control, wireless security, and power management were expected to erode the switched Ethernet market. However, LAN speeds and capacities have continued to outpace those of WLAN, even though the latter networks have received major boosts after the advent of 802.11ac standards. The Ethernet-based LAN equipment markets continue to be mainly categorized in two segments—switches and routers.
The India LAN switches market grew at a healthy pace last year, particularly on the back of an increased demand for the layer-3 as well as layer 4-7 switches. This was driven by an increased spending from the service provider segment, for technology refresh and 4G rollouts. In the non-service provider verticals too, the adoption of L3 switches was robust, given a continued focus on digitization. The data center horizontal, particularly driven by the third-party service provider segment, was another key contributor to growth. The routers market also witnessed a good year-on-year growth, mainly due to a spurt in demand from the service provider segment.
The consolidated enterprise networking market, comprising both LAN and WLAN segments, saw Cisco, HPE and Juniper stay as the leading vendors. Other vendors active in the India market included Brocade, Avaya, Alcatel-Lucent Enterprise, Huawei, Citrix, Array Networks, D-Link, Netgear, TP-Link, Ruckus SmartLink and Dax.
Key technology trends
In all, the industry may witness growth owing to ongoing technological innovations in WLAN and high-speed Ethernet switches. Security is likely to emerge as a key differentiating feature, given the rising complexities and porousness of the networks as the adoption of cloud and mobility grows.
These demand-side needs imply that enterprise networking must become more and more agile, so as to accommodate new communication networks and applications without compromising on aspects such as security and compliance. These developments are accelerating further de- velopments in the area of software defined networking (SDN), which is already having a considerable impact in shaping the router and switch market shares. Also, technologies like network functions virtualization (NFV) are making inroads into India and are expected to be of particular importance for the service provider market segment.
Large players, which are able to make significant investments in R&D and develop or acquire new technologies faster than others, have maintained an edge. Players that offer end-to-end networking solutions are also able to better navigate the demand-side market dynamics.
These vendors are able to offer advanced device connectivity and management options such as software network management, policy enforcement, and integrated management of wireless access points and wired switches. This is particularly attractive to large enterprise customers, who prefer a single vendor that can handle all the enterprise network layers in an end-to-end manner.
In the WLAN segment, the market for cloud Wi-Fi has grown significantly, as it further simplifies networking for end-users and fosters mobility. Also, the cloud-managed WLAN market continues to expand with both established vendors and startups rolling out services. Consider Meraki, now part of Cisco, and Aerohive Networks that offer end-to-end cloudmanaged IT environments with tightly coupled WLAN components. Other vendors also offer simple cloud-managed Wi-Fi access, or even some cloud features added to the Wi-Fi equipment. However, full-blown deployments of Cloud Wi-Fi are yet to become mainstream in the India market.
Government is emerging as a key growth horizontal, particularly due to the ongoing Digital India umbrella program, which encompasses components like Smart Cities and digitization of various intra-government and citizen-facing processes. With the first list of 20 smart cities announced, the momentum has started picking up for the Smart Cities Mission, which has a goal to develop 100 smart cities and rejuvenate 500 others.