Ethernet switches play an important role in the process of digitalization of companies. Due to its ability to connect computers, routers and more devices to the same network, making them an essential tool. In this way, allowing data, resources and access to tools to be transferred in real time, contributing to reducing congestion and improving work operations.
An important part of any business network, which is why its demand continues to rise globally. Since with growing digitalization, more and more organizations seek to connect their devices efficiently, transmitting data packets through the most optimal route. Thus, maintaining productivity and security, which translates into greater operational efficiency within the current digital environment.
Demand for Ethernet switches increases in the third quarter of 2023
This is revealed by the IDC report, which describes how the revenue of the global market for Ethernet switches experienced 15.8% growth. Likewise, reaching $11.7 billion in the last quarter of 2023. Increasing its importance and demand in the corporate sphere, compared to the router market, which would suffer a decrease of 9.4%. Which would indicate a change in the paradigm of business needs.
This is in addition to the 38.4% growth recorded during the first half of this year. An upward trend that is expected to last until mid-2024. Since more and more companies recognize the importance of automating and interconnecting their devices. Especially as digital transformation advances, forcing industries to stay competitive with solid and efficient network infrastructures.
More companies are moving towards the digitalization of processes
The report notably highlights the growth recorded in segments without data networks, where revenue increased up to 22.2%. A figure that contrasts with the data center market, where the increase would be more moderate, reaching only 7.2% in the last quarter. Because more and more organizations invest in adopting and expanding their business networks, in view of the digital demands that exist in the market.
This is also attributed to factors such as the adoption of networks to improve communication between their IT departments. As well as the expansion of local connectivity in various regions through fiber optic infrastructures. In addition to the increase in demand for services such as Artificial Intelligence, Big-Data and cloud technology from providers such as AWS, Microsoft or Google.
Increase in supply chain impacts Ethernet switch market
But according to IDC data, one of The main drivers of Ethernet switch sales it would mostly be the global supply chain. This after the problems experienced during the pandemic, where imports and exports were reduced to alarming levels. A situation that would lead to an increase in the number of order delays.
Likewise, generating greater demand for Ethernet switches in an attempt to mitigate logistical challenges. For this reason, one of the sectors with the greatest demand is precisely port shipments. Basically, imports and exports driven by the standardization of e-commerce. Something that would directly impact the global supply chain.
Expansion of Ethernet switches in the era of digital transformation
It is for these reasons that the Global Ethernet switch market would see a 27% increase throughout the year. This is compared to its performance in 2022. An aspect that reflects how more and more organizations recognize the importance of IT solutions. Whether to improve your administrative processes, as well as efficiently manage your products and distribution, becoming a priority for organizations.
Added to this is also the growing importance of cybersecurity and the maintenance of network infrastructure worldwide. Since electronic threats grow alongside technological adoption. Especially with tools like AI or IoT, where more and more devices are interconnected. Therefore, data protection and network privacy becomes a priority.
Clearly, the Ethernet switch market is directly influenced by our trend toward IT transformation and adoption of operational technologies. One that would allow us to view data in real time, monitor system performance, control and manage processes and of course, safeguard critical information. This synergy allows the demand for Ethernet switches to continue growinghence it is expected that more will be projected for the future.