In a recently released report, Dell’Oro Group, a trusted source for market information about the telecommunications, networks, and data center industries, predicted that by 2026, cumulative global service provider router and switch market revenues would be close to $76 billion, growing at a CAGR of 2 percent. It is anticipated that adoption of 400 Gbps routing technology would continue to fuel industry expansion overall, enabling telecom and cloud service providers to build their networks and boost profits.
“The July 2022 forecast remains in line with the January 2022 forecast, despite both emerging economic uncertainty and persistent market challenges,” said Ivaylo Peev, Senior Analyst at Dell’Oro Group. “Emerging economic uncertainty, racing inflation, China’s zero-COVID-19 policy, and the war in Ukraine are depressing markets in 2022, putting pressure on vendors and customers alike. We adjusted our projections to account for these market challenges, but we have not changed the baseline guidance of the forecast, because we believe that the underlying fundamentals of the service provider router market will remain healthy over the forecast period.”
WAN and DCI
Additional highlights from the Service Provider Router and Switch July 2022 5-Year Forecast Report by Dell’Oro Group would include:
- Over the course of the forecast period, the cloud service provider category is anticipated to grow more quickly than telecom service providers. The deployment of 400 Gbps technology in WAN and Data Center Interconnect (DCI) applications should continue to fuel this market’s expansion.
- Service provider core routers will find new applications for ZR Optical Modules, long-distance optical modules that handle lengths of up to 120 km and are based on 400ZR requirements. Over the projected period, the 400ZR modules utilized with 400GE port exports are expected to gradually grow, according to Dell’Oro Group.
- China recently started a spending frenzy on infrastructure in an effort to combat the economic downturn brought on by the nation’s ongoing COVID-19-related lockdowns. The amount China intends to spend on the new infrastructure plan is not yet known. However, according to statistics provided by the Chinese government, overall infrastructure spending increased by over 8% in the first quarter of 2022.
The Chinese politicians who are overseeing the infrastructure upgrade also seem to be placing a strong emphasis on technology, particularly new supercomputing, cloud, and artificial intelligence capabilities. Chinese service providers are likely to accelerate and increase their expenditure on network investments if the government’s stimulus program remains at this level and with this focus for the ensuing four quarters.
About the Report
The service provider router and switch market is completely and in-depth covered for the past, present, and future in the Dell’Oro Group Service Provider Router & Switch 5-Year Forecast Report. For manufacture revenue by regions, client kinds and use cases, average selling prices, and unit and port shipments, the report contains qualitative analysis and comprehensive information.