A report by Dell'Oro Group predicts that nearly 290 million multi-gigabit Ethernet switch ports will be shipped over the next five years while 1G Ethernet will peak next year.
The report also said that new entrants into the campus switching market could potentially lead to downward pressure on market prices.
“The campus switching market is entering an era of multi-year growth driven by new requirements of the digital transformation and an overdue refresh cycle,” said Sameh Boujelbene, senior director at Dell’Oro Group, in a statement. “As enterprise customers are upgrading their networks, they are considering new feature sets as well as higher speeds, such as 2.5/5.0 Gbps. We expect 2.5/5.0 Gbps to ramp significantly over our forecast horizon, driven mostly by Wi-Fi 6 Access point connectivity and high-end applications.
"In the meantime, while we predict 1 Gbps to start a long-term decline in 2021, this speed is forecast to still drive two-thirds of the campus switch port shipments in 2023."
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While companies such as Cisco and Juniper Networks are making the move to subscription-based revenues, Dell'Oro's "Ethernet switch—campus five-year forecast report" said subscription-based models will have a minimal impact on market prices during the forecast period.
Dell'Oro's report also said that new software features and capabilities would increase over its forecast horizon.
In a separate report, Dell'Oro said the overall telecom and equipment service market would grow at a 1% compound annual growth rate (CAGR.) The market will approach $129 billion by 2023, which was up from $121 billion last year. The transport market, which includes microwave and optical, is projected to grow at a CAGR of 3%. Mobile and fixed revenue will both grow at a 1% CAGR over the five-year forecast period.