The European enterprise networking infrastructure market will grow 18.9% year on year in 2023, reaching a total value of $14.3 billion. Demand for enterprise networking technologies, which include Ethernet switches, WLAN, and routers, will remain solid throughout the 2022-2027 forecast period, as these are key facilitators of organizations’ ongoing digital transformation and play important role in AI implementation.
Vendors of enterprise networking technologies posted extremely strong revenue growth in 2022, driven by an unprecedented backlog clearing. This momentum continued in the first half of 2023, leading to strong market value growth. Although the market is expected to decline by 7.6% year-on-year in 2024 due to “digestion” of delivered backlogs, the compound annual growth rate (CAGR) over the 2022-2027 period should still be positive.
“Strong revenue growth for Ethernet switching and enterprise WLAN continued in the first half of 2023, which led us to revise the 2023 forecasts significantly upwards from the previous release,” says Peter Kosinar, program manager at IDC Europe. “We expect growth in these markets to decelerate in the second half of 2023, eventually turning to negative figures in 2024, mainly due to temporary market saturation after backlogs have been cleared, as well as increased IT budget constraints and the worsening macroeconomic situation in key European countries.”
Driven by the culminating backlog clearing, non-datacenter Ethernet switch has become the fastest growing technology within the overall enterprise networking infrastructure market in 2023, followed by datacenter Ethernet switch. Demand for enterprise WLAN technology is expected to remain strong through 2023, while the enterprise router market will see a moderate decline over the five-year forecast period, due to the negative effect of the availability of the competing SD-WAN infrastructure.