Well in excess of $100-billion will be spent on campus switches over the next five years, according to a new report from Dell’Oro Group, which says that after three strong years in campus switch sales it foresees a significant correction in 2024, followed by a subsequent period of improved growth trajectory throughout the forecast horizon.
“Backlog normalisation, capacity digestion, and spending optimisation are all expected to hit the market in 2024,” says Sameh Boujelbene, vice-president at Dell’Oro Group. “Additionally, the recently announced HPE/Juniper acquisition may further depress sales performance this year and possibly even next year, since customers will be awaiting more clarity on post-acquisition roadmaps. We currently project a double-digit decline in campus switch sales in 2024.
“Despite such a steep anticipated sales decline in 2024, our analysis showed that the pandemic has effectively accelerated the growth in the campus switch market between 2019 and 2024 compared to the preceding five years,” Boujelbene adds.
“This positive impact was propelled by several factors including an accelerated pace of digital transformation, a greater portion of high-priced Power-Over-Ethernet (PoE) devices, and the need for faster network speeds. We predict these factors will persist in the campus switch market and will drive better days ahead of us.”
Additional highlights from the Ethernet Switch – Campus 5-Year January 2024 Forecast Report include:
* The integration of Artificial Intelligence capabilities will remain pivotal for vendors striving to enhance their competitive positioning in the market. Nonetheless, the challenge lies in whether these vendors can effectively monetise these features or opt to leverage them for expanding and/or retaining their customer base.
* 2.5/5.0 Gbps is expected to comprise less than 15% of campus switch sales by 2028.
* PoE ports are forecast to comprise more than half of total campus switch port shipments by 2028.
* IT/OT convergence is expected to increase over the forecast horizon, but adoption may take time given the very long 10-to-30-year lifecycle of industrial networking equipment.