Enterprise networking spend in Singapore to increase at 6.6% CAGR over 2020-2025, forecasts GlobalData

Enterprise spending on networking infrastructure is expected to increase at a compounded annual growth rate (CAGR) of 6.6% between 2020 and 2025, driven by the IT modernization efforts to support the ongoing digital transformation initiatives, says GlobalData, a leading data and analytics company.

Pragyan Tarasia, Senior Research Analyst at GlobalData, comments: “Given the importance of a strong networking infrastructure in supporting their digital/online services and enabling remote connectivity between geographically spread-out team members amid the COVID-19 prompted remote working/work-from-home environment, enterprise spending on networking products and services will continue to increase.”

According to GlobalData Market Opportunity Forecasts to 2025: ICT in Singapore, the networking market in Singapore is expected to reach US$4.8bn in 2025 which is also supported by the considerable rise in the volume and magnitude of information security threats and cyber-attacks on enterprise IT assets in recent times has been driving enterprises to adopt advanced networking solutions.

Among the enterprise networking hardware, networking software and networking service segments, the latter comprising managed network services; ethernet LAN, ethernet MAN/WAN, and ethernet private line services; site-to-site and IP/MPLS VPN services, content delivery network services, fiber optic and other communication services will account for the largest share of the total enterprise network spending in Singapore through the forecast period.

Ms Tarasia adds: “Of all the networking service categories, enterprise spending on managed network services will grow at the fastest CAGR of 9.2% over the forecast period. With the introduction and growing adoption of hybrid IT and cloud solutions, the enterprise network has become more critical and complex than ever, thereby compelling enterprises to opt for third party managed networking services.

Networking software segment, although currently a smaller contributor to the overall market value, will see its enterprise spending increase at a robust CAGR of 16.7% over the forecast period. Enterprise spending on SD-WAN will especially increase at a CAGR of 22.1% over the forecast period. The growing adoption of public cloud services will especially drive demand for SD-WAN technology to secure these cloud deployments

Ms Tarasia concludes: “While the large enterprise (1,001+ employees) segment will account for largest share of the total enterprise networking spending in Singapore through the forecast period, the combined spending from micro (1-50 employees) and small and medium enterprises (51-1,000 employees) will increase at a marginally faster CAGR of 6.7% over the forecast period. Government support through Infocomm Media Development Authority’s SME Go Digital Program, which aims to help SMEs use digital technologies and strengthen their digital capabilities, will drive investments on robust IT infrastructure, including networking in this segment.”

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