In the first half of 2016, vendor revenue on the Europe, Middle East, and Africa (EMEA) enterprise networking market decreased by 3.8% year on year, according to detailed competitive data reports released by International Data Corporation (IDC). At the same time, performance among the three sub-markets — Ethernet switching, wireless LAN (WLAN), and routing — is evolving differently.
“Although in the first half of 2016, the enterprise networking market in EMEA contracted year on year, the positive signals from the second quarter support our expectations that annual market results could be close to flat,” says Peter Kosinar, senior research analyst at IDC.
Ethernet switching, which constitutes a clear majority of the market, declined by around 6.7% year on year in first half of 2016. Routing was practically flat with 0.14% revenue growth, while WLAN posted year-on-year growth of 6.3% mainly thanks to results in the second quarter.
These findings are included in IDC’s EMEA Ethernet switch, router, and WLAN trackers, which provide quarterly, country-level information on the performance of leading market players, enabling study of competitive dynamics across underlying technologies. The sections below highlight some key findings for EMEA enterprise networking sub-markets in first half of 2016.
Enterprise Ethernet switching: After a weak beginning, the second quarter of 2016 brings cautious optimism for annual market results
- Cisco experienced a challenging half-year in terms of absolute revenue decline, while its market share consistently remains orders of magnitude ahead of competitors. HPE slightly improved its market share and ranking from 2015. The two leading vendors claimed a combined 68.1% of the total market in H1 2016.
- Among the vendors that gained market share year on year, Arista and Huawei are the leaders.
- Bucking a long-term trend, markets in Central and Eastern Europe (CEE) and the Middle East and Africa (MEA) lost revenue share in the overall EMEA market. This was due to economic difficulties in Russia and Ukraine, along with stagnating oil prices. In the first half of 2016, Western Europe (WE) represented approximately 70% of EMEA market revenue.
- Somewhat surprisingly, the performance of the UK market in H1 2016 was better than that of the largest Western European markets. Despite this development, we expect sales inhibitors to have a stronger impact in the UK in the second half of the year.
- Combined 40GbE and 100GbE technologies recorded strong year-on-year revenue growth of 34.2%; this growth is expected to continue in the coming quarters.
Enterprise routing: Huawei doubled revenue on a flat market
- The enterprise routing market is dominated by Cisco; in recent quarters, the vendor’s market share fluctuated around 75% of total EMEA market.
- Huawei held the second-largest market share in the first half of 2016, while almost doubling its revenue year on year. OneAccess is currently positioned as a secure number three.
- In the first half of 2016, the highest revenue growth (almost 7.1% year on year) was observed in the SOHO segment; revenue for high-end and low-end segments were flat, while midrange revenue was slightly down from H1 2015.
Enterprise WLAN: On the way to recovery?
- Market share positioning of the major market players in H1 2016 changed from H1 2015, due to HPE acquiring Aruba and Brocade buying Ruckus during the past quarters. Cisco’s market value share dropped almost 3 percentage points to 46%. HPE currently claims 12% of the total WLAN market value.
- Growth dynamics varied significantly by region as well. Western Europe posted solid 7.9% growth in H1 2016 compared to H1 2015, while MEA grew by only around 3%. The relatively weak CEE market remained flat, mainly due to the significant share represented by the struggling Russian WLAN market.
- The sales of wireless controllers dropped by 7.4% in the first half of 2016 compared to the same period in the previous year. The continuing decrease of controller sales revenue is in line with the overall growing demand for cloud-managed or cloud-controlled wireless infrastructures.
“In 2016, the WLAN market recovered slightly after quite a weak first quarter,” says Elena Szolgayova, a senior research analyst at IDC. “We remain cautious regarding the Brexit aftermath, as the UK portion of the Western Europe WLAN market has been far and away the largest in recent years.”
The EMEA enterprise networking market has been volatile in recent quarters, with a guarded positive outlook for the rest of 2016. The multi-faceted sub-markets, including Ethernet switching, WLAN, and routing, are each going through intensive technology-driven transitions, which cEreates opportunity for ambitious market players to challenge current market leaders. The market stakeholders can use IDC’s detailed EMEA Ethernet switch, router, and WLAN trackers as an excellent knowledge base for navigating through the region’s dynamic and competitive enterprise networking landscape.
About IDC Trackers
IDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC’s Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly excel deliverables and on-line query tools. The IDC Tracker Charts app allows users to view data charts from the most recent IDC Tracker products on their iPhone and iPad. The IDC Tracker Chart app is also available for Android Phones and Android Tablets.
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