27 Jun 2016

FOR IMMEDIATE RELEASE, Prague — In first quarter of 2016, vendor revenue on the Europe, Middle East, and Africa (EMEA) enterprise networking market decreased by 6.8% year on year, according to detailed competitive data reports released by International Data Corporation (IDC). However, performance among the three sub-markets — Ethernet switching, wireless LAN (WLAN), and routing — differs significantly.

“In 2015, the enterprise networking market in EMEA was practically flat after several years of revenue growth,” says Peter Kosinar, senior research analyst at IDC. “Although the underlying technological and economic factors are strong enough to bring the market back to growth in 2016, we are likely to see large variation in countries’ performance.”

Ethernet switching, which constitutes a clear majority of the market, declined by around 10.3% year on year in first quarter of 2016 (this market also declined in 2015, albeit marginally). Routing and WLAN, on the other hand, posted year-on-year growth of 2.4% and 2.3%, respectively, after showing single-digit annual growth in 2015.

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 quarter of 2016.

Enterprise Ethernet switching: Challenging quarter with mixed signals for the rest of the year

• In a weaker quarter, the leading vendors CISCO and HPE maintained stable overall market shares relative to previous quarters, claiming a combined 69.2% of the total market.
• Due to economic difficulties in Russia and Ukraine, Central and Eastern Europe (CEE) lost revenue share in the overall EMEA market, dipping again below 10% in the first quarter of 2016, although we expect performance to improve in the second half of 2016.
• The U.K. is an important contributor to EMEA’s Ethernet switching market volume; in recent quarters, its importance was on par with Germany. We expect some sales inhibitors in the U.K. in the second half of 2016.
• 40GbE and 100GbE segments both recorded strong year-on-year value growth, as expected. Slower technologies, on the other hand, declined, despite accounting for the majority of shipped ports.

Enterprise routing: Good quarter for SOHO routers; Huawei #2 among enterprise players

• The enterprise routing market is clearly dominated by CISCO; in recent quarters, the vendor’s market share fluctuated around 75% of total EMEA market.
• In the first quarter of 2016, the highest revenue growth (almost 7.6%) was observed in the SOHO routers category, which are predominantly used by smaller organizations.
• Huawei captured the second-largest market share for the fourth consecutive quarter, while OneAccess is currently number three.

Enterprise WLAN: Sales of 802.11ac access points keep rolling

• Shipments of 802.11ac certified access points dominated the market, with almost 67% AP revenue share, compared to approximately 46% in Q1 2015.
• From a regional point of view, enterprise market revenues in Western Europe (WE) and the Middle East and Africa (MEA) grew by 2.6% and 4.4%, respectively, year on year. The ongoing crisis in Russia had a strong negative effect on WLAN revenues in the CEE market, which decreased by approximately 9%.
• Cisco claimed over 45% of the overall market revenue, followed by HPE with almost 13%. Ruckus finished its last quarter prior to the recently completed acquisition by Brocade with almost 8% market value share.

“Last year was uneventful for enterprise WLAN vendors, both in terms of acquisitions and technological developments,” says Elena Szolgayova, a senior research analyst at IDC. “It was also a weak year in terms of revenues, and it is unlikely that we are going to see a dramatic revival this year.”