Managed Switches Market

Managed Switches Market Outlook (2022-2032)

The global managed switches market is set to enjoy a valuation of US$ 17.6 billion in 2022 and expand at a CAGR of 8.4% to reach US$ 39.4 billion by the end of 2032.

Worldwide sales of managed switches accounted for around 68% share of the global Ethernet switches market at the end of 2021.

Report Attributes	Details
Managed Switches Market Size (2021A)	US$ 16.7 Billion
Estimated Market Value (2022E)	US$ 17.6 Billion
Forecasted Market Value (2032F)	US$ 39.4 Billion
Global Market Growth Rate (2022-2032)	8.4% CAGR
North America Market Share (2021)	~32.7%
South Asia & Oceania Market Growth Rate (2022-2032)	~10.1% CAGR
United States Market Growth Rate (2022-2032)	~7.7% CAGR
Market Share of Top 5 Companies	~72.6%
Key Companies Profiled	Alcatel-Lucent Allied Telesis, Inc. Arista Beckhoff Automation NETGEAR, Inc. Brocade Communication Systems, Inc. Cisco Systems Inc. Dell Technologies D-Link Corporation Eaton Corporation Hewlett-Packard H3C Honeywell International HP Enterprise Huawei Technologies Juniper Network ODM Direct Parker Hannifin Corporation Siemens SE TP-Link TRENDnet, Inc.

Sales Analysis of Managed Switches (2017-2021) Vs. Market Outlook (2022-2032)

Since the 1960s, Ethernet has been one standard technology for computer networks. It is widely used by household and office LANs owing to its user-friendliness and has become deeply integrated into networking. Ethernet switches can differ in types such as unmanaged and managed network switches as well as smart switches.

Unlike unmanaged switches, managed Ethernet switches are more capable of handling extra network loads. However, they require a skilled engineer or administrator to make the most of them. Managed switches enable better control of the data frames and networks moving through switches.

However, managed switches have yet to see widespread usage in process automation (PA) and factory automation (FA) for industrial applications. Conventional switches are believed to be unable to endure the harsher industrial usage environment, which includes active gases, dust, humidity, etc., as compared to the office environment. With the growing trend of digitization, usage of managed switches is expected to surge over the decade owing to their increasing penetration in residential end use.

• Short Term (2022 Q2 to 2025): Booming Internet penetration and adoption of smart devices to positively impact managed switches market growth.
• Medium Term (2025-2028): Europe and East Asia anticipated to witness comparatively high demand for managed switches owing to increased penetration of network connections.
• Long Term (2028-2032): Growing use of managed switches for automation & robotics in industrial segment to drive demand.

Over the 2017-2021 historical period, the global managed switches market registered a CAGR of 4.6%, and according to Fact.MR, a market research and competitive intelligence provider, the market is projected to exhibit growth at 8.4% CAGR between 2022 and 2032.

Market share analysis of managed switches based on switch speed and region is provided in a nutshell in the above image. Under the switch speed type segment, the 500 Mbps – 1 Gbps sub-segment dominates with 23.5% market share in 2022.

Why is There Surging Demand for Managed Switches?

“Increasing Number of Data Center Challenges Faced by Business Organizations the the Prime Factor Fueling Market Growth”

Increasing end-user devices and virtualization are adding to the complexities involved with data centers. Business organizations looking to geographically expand their operations need to implement efficient data center networking management techniques. Conventional data center management techniques make it difficult to adapt to the swift evolution of security threats and embrace new technologies in the market.

To address such issues, an increasing number of business organizations are supporting the deployment of managed switches that make data centers secure and agile. Another factor fueling the growth of the managed switches market is the benefits involved, such as business continuity and disaster recovery planning.

Managed switches for small businesses as well as big businesses support business continuity and uncertainty in recovery plans such as storage transport and metro Ethernet. The Software-Defined Networking (SDN) concept, whereby network administrators can manage network services by abstracting lower-level functionalities, foresees tremendous demand growth for managed switches.

“Intensifying Demand from IT, Telecommunications, & Electronics Industry, Coupled with IR4.0. to Act as Game Changer”

Wireless and wired electronics are used in telecom equipment categorized by the end use. Additionally, smartphone utilization is increasing significantly, and owing to the demands from consumers, diverse advancements are being made in the field of computing, electronics, and telecommunications.

Managed switches are an important aspect of electronics and computing, and continue to be upgraded with the advent of newer types of network solutions. As Internet rates continue to fall, there will be a strong trend towards managed switch adoption, particularly in enterprises that are shifting towards data storage and digital automation. Such rising consumption of electronic devices is expected to drive the sales of managed switches.

Moreover, intelligent and smart production techniques have gained a huge push with the introduction of Industry 4.0. The need for real-time data & network analysis and automation, along with real-time surveillance, has become an integral aspect of the intelligent manufacturing environment as enterprises become more intelligent. Intelligent manufacturing techniques constantly require the integration of managed network switches to orchestrate work cost-efficiently in a streamlined environment.

As a result, demand for managed switches is rising across industries as they work towards the ultimate goal of an IoT- enabled smart manufacturing and ecosystem.

What Do Managed Switch Manufacturers Need to Watch Out For?

“Lack of Trained Professionals and High Costs Involved in Maintaining & Updating Managed Switches”

Lack of trained professionals to assist in implementing managed switches is restraining the growth of this market. Also, due to the costs involved in maintaining and updating the entire network resources, business organizations are reluctant in deploying managed switches

Even though no electronic device can be 100% efficient, maximizing the output and performance is important, and remains a challenging task, to which, managed Ethernet switches are no exception. Complexity in the designing process continues to be one of the major challenges.

Even when gigabit-managed switch ports are not actively operational, they consume a certain amount of power, which leads to additional operational costs. High costs associated with the complexity in design and high energy consumption of managed switches may undermine market potential.

Country-wise Insights

Will Increasing Application of ICT in the U.S. Drive Managed Switch Demand?

Increasing IT infrastructure spending and growth of network operating companies are two primary factors that have influenced technological development in the U.S. There has been an increase in demand for smart homes, which is fueling innovation in technologies of home connectivity, wherein, smart managed switches are supporting the trend of smart connected homes through their robust connectivity attribute.

Smart connected homes mainly rely on advanced technologies such as the Internet of Things (IoT) and artificial intelligence (AI), consisting of digital network connections, and are connected through managed switches for home networks. With the increasing desire of consumers to integrate their lifestyle with connectivity, demand for smart and connected home technology has increased, driving the application opportunities for managed switches.

The United States managed switches market is expected to reach US$ 10.8 billion by 2032.

Why is the Germany Managed Switches Market Expected to Be Highly Attractive?

Germany has the second-largest number of data centers, totaling 484, after the United States which has 2,751 data centers. As a result, Germany’s rapid growth in data centers has driven up the whole industry.

However, a multitude of industries is undergoing a digital revolution. The digital revolution is being seen from mechanical technology and analog electronics to electronic digital equipment. All key manufacturing industries in the country are going digital by integrating IR 5.0 owing to benefits such as remote monitoring and data analytics services.

Going forward, the production of managed switches will continue to increase with the growing demand for Internet usage. With the increase in overall Internet utilization for digitizing numerous end-use industries, managed switches are also gaining prominence in these industries.

These factors are promoting the growth of the Germany managed switch market, which is expected to create an absolute dollar opportunity of US$ 945.8 million over the 2022-2032 period.

Category-wise Insights

Why are Layer 3 Managed Switches Scalable Solutions for Universal Use?

Layer 3 switches are coordinated device portfolios with scalable performance, functionality, and number of ports, which enables the designing of custom solutions that are always economical. Unlike layer 2 managed switches, layer 3 switches are used for networks ranging from simple to highly complex, horizontally- and vertically-integrated, across all levels.

Moreover, layer 3 switches are approved for a wide variety of applications in diverse end-use industries and countries across the world. To meet these specific advanced demands, layer 3 switches support both system operators and integrators.

All in all, the layer 3 managed switches sub-segment is predicted to expand 2.5X and gain 557 BPS by the end of 2032.

Will Demand for Managed Switches for Industrial Manufacturing End Use Keep Rising?

The digitalization that is quickly taking over industrial environments is based on communication networks. Demand for robust network functionality and technology is increasing along with the number of network users and the variety of data-based applications.

However, because unmanaged switches are allegedly simpler to use and appear to be more economical, machine and plant builders (OEMs), in particular, continue to rely on them for networking.

Firstly, industrial managed switches can be set up without any initial configuration just as readily as unmanaged switches. Secondly, the need for further investments has decreased recently owing to developed infrastructure. Lastly, we are seeing the converting unmanaged switches to managed switches to achieve higher operational efficiency and security.

Managed switches are providing organizations with a range of short- and long-term advantages that will take the market to new heights. Thus, owing to the aforementioned factors, the demand from the manufacturing sector is expected to grow more than 1.9X and create US$ 2.2 billion absolute dollar opportunity during the assessment period.

Competitive Landscape

Prominent manufacturers of managed switches are Alcatel-Lucent, Allied Telesis Inc., Arista, Beckhoff Automation NETGWEAR, Inc., Brocade Communication Systems Inc., Cisco Systems Inc., Dell Technologies, D-Link Corporation, Eaton Corporation Hewlett-Packard, H3C, Honeywell International, HP Enterprise, Huawei Technologies, Juniper Network, ODM Direct, Parker Hannifin Corporation, Siemens SE, TP-Link, and TRENDnet, Inc.

Over the past decade, major market players involved in the production of managed switches have opted for vertically integrated approaches to gain a competitive advantage. Integration in this business helps reduce the dependence on suppliers and protects manufacturers from being caught short on raw material supply.

Additionally, producers are focusing on vertical integration to overcome the price volatility created by imbalanced supply-demand dynamics. Moreover, upstream activities in the managed switch business are highly capital-intensive, which limits the entry of new market entrants. This, in turn, creates higher relative margins managed switch suppliers.

• In April 2022, NETGEAR announced the introduction of smaller M4250 desktop switches to enable quick installation in a variety of applications with limited space, as well as the new NETGEAR EngageTM Controller application.
• In June 2022, Cisco started providing users of catalyst switches with three steps along the path to the cloud: cloud monitoring capabilities for some catalyst switches, cloud-manageable Wi-Fi 6E access points for some catalyst wireless devices, and fully cloud-managed access networks combining catalyst switches and Meraki cloud management.

Fact.MR has provided detailed information about the price points of key manufacturers of managed switches positioned across regions, sales growth, production capacity, and speculative technological expansion, in the recently published report.

Segmentation of Managed Switches Industry Research

• By Number of Ports :

  • Less than 8 Ports
  • 8-16 Ports
  • 16-24 Ports
  • 24-48 Ports
  • Above 48 Ports

• By Switch Speed :

  • less 500 Mbps
  • 500mbps - 1 Gbps
  • 1-10 Gbps
  • 10-50 Gbps
  • Above 10 Gbps

• By Layer Type :

  • Layer 2
  • Layer 3

• By Switches Type :

  • Stackable Managed Switches
  • Standalone Managed Switches

• By Device Type :

  • PoE
  • Non-PoE

• By Sales Channel :

  • Online Sales
    • Company-based Websites
    • e-commerce Platforms
  • Offline Sales
    • Specialty Stores
    • Electronics Device Stores
    • Others

• By End-use Industry :

  • Aerospace & Defense
  • Automation & Robotics
  • Academics & Research
  • Electric & Electronics
  • Healthcare & Life Sciences
  • IT &Telecommunication
  • Manufacturing
  • Logistics & Warehousing
  • Retail & Consumer Goods
  • Others

• By Region :

  • North America
  • Latin America
  • Europe
  • East Asia
  • South Asia & Oceania
  • MEA