Cloud Managed Networking Market Size, Share & COVID-19 Impact Analysis, By Type (Hardware, Software and Cloud Services), By Deployment (Public Cloud and Private Cloud), By Enterprise Size (Small and Medium Enterprises (SMEs) and Large Enterprises), By Industry (Telecom & IT, Retail, Media & Entertainment, Educational Institutions, and Others) and Regional Forecast, 2020-2027

The global cloud managed networking market size was USD 3.32 billion in 2019 and is projected to reach USD 14.61 billion by 2027, exhibiting a CAGR of 21.1% during the forecast period.

Cloud-managed networking is widely adopted by organizations to manage their network infrastructure including wired network, Wi-Fi, and SD-WAN, over a cloud-based service model. The networking service is generally hosted by third parties usually as paid or subscription-based models.

The market size of cloud managed networking is primarily driven by recent developments in data centers and the rising number of startups and small and mid-sized enterprises (SMEs). Increasing adoption of networking hardware such as routers and switches has assisted startups and SMEs to implement precise and secure networking infrastructure. This factor is likely to create a massive demand for managed networking hardware and cloud services, which would further drive the growth of the market. According to the Federal Ministry for Economy and Energy, (FMEE Org), in Germany, from 2016 to 2019, around USD 12 billion were invested in various startups and SMEs projects including High-tech Start-up, Fund, EXIST and INVEST, and others.

Increasing Use of Online Platforms amid COVID-19 to Surge Demand

The ongoing novel coronavirus pandemic is severely affecting the global economy. Currently, the pandemic has compelled organizations to permit their employees WFM (work from home) policy. According to a survey by Owl Labs, in March 2020, around 16% of organizations across the globe have implemented work from home policies for their employees. Also, the growth of the IT sector has slowed down and overall IT budgets and investments have gone down significantly. Considering the preliminary indicators from the first quarter of 2020, a minor decline is observed in the overall demand for managed networking services.

On the contrary, the demand for remote working service and managed network services such as advanced managed networking and collaboration devices is increasing. According to the IDC survey (International Data Corporation), as of March 2020, around 40% of 250 large and medium enterprises plan to invest in advanced cloud managed networking services and solutions during the pandemic. Similarly, governments worldwide are focused on investing and adopting advanced networking solutions. For instance, during the pandemic, the government of Estonia and Germany launched an event and invited developers and hackers to find managed networking solutions for COVID-19 related challenges.

LATEST TRENDS

Increasing Trend of Hybrid Cloud Model to Augment Market Growth

One of the evolving cloud managed networking market trends is the rising adoption of advanced hybrid cloud models in managed networking services. Hybrid cloud managed networking offers features such as advanced business models, secure network infrastructure, and connectivity, along with the elimination of third parties’ participation.

Major players such as Cisco System, Inc. and Huawei Technologies are developing a customized hybrid solution for SMEs. Hybrid cloud offers a high level of convenience by simplifying the overall networking process and provides benefits of both private and public cloud. According to a report by Microsoft Corporation, the global market for hybrid cloud was valued at around USD 33.28 billion in 2016 and is expected to reach around USD 91.74 billion by 2021 at a CAGR of 22%.

DRIVING FACTORS

Increasing Number of Data Centers to Propel Market Growth

Key players in the cloud managed networking market are focused on adopting advanced data centers based on cloud to store enormous amounts of data and provide a better customer experience. Additionally, core technologies such as big data and the Internet of Things (IoT) are expected to drive demand for data centers. The increasing investment for the deployment of data centers in regions such as the Asia Pacific and Europe is likely to support the growth of the market in the forthcoming years. For instance, in July 2020, in Singapore, Big Data Exchange (BDx) invested to develop and launch “Data Center (SIN1)”. The data center will assist to create various market opportunities for key players and associated distributor in the market.

RESTRAINING FACTORS

Less Awareness and Rising Security Concerns to Impede the Adoption of Networking Services

Although managed networking services provide several features, a majority of the end-users are still dependent on on-premises services. Also, lack of awareness for cloud managed networking solutions among the enterprises across the developing countries, especially in rural areas or where IT service and network connectivity is not available, is expected to hinder the growth of the market.

SEGMENTATION

By Type Analysis

Managed Networking Hardware to Account for the Maximum Market Share

Based on the type, the market is divided into hardware, software, and cloud services.

The hardware segment is expected to dominate the market. This dominance is attributable to the rising adoption of networking hardware and accessories offered by the market players. For instance, Cisco Systems offers The Cisco Meraki Portfolio that includes Wireless LAN (MR56, MR46E, MR45, and other), Security Appliances (MX68CW Security & SD-WAN Appliance, and other), and others.

The software segment comprises advanced managed network software offered by companies such as Spark Digital, Auvik Networks, Inc., and others.

The cloud services segment is anticipated to grow with maximum CAGR during the forecast period, owing to the rising adoption of public platforms among startups and SMEs.

By Deployment Analysis

Public Cloud Segment to Register Highest Growth Rate Due to Rising Number of Startups and SMEs

Based on the deployment, the market is classified into the public and private cloud.

Private cloud is anticipated to hold a major cloud managed networking market share. The growth is attributable to rising adoption across large organizations such as Vtnz CIO, Uber Technologies, Inc. Levi Strauss & Co., Dropbox, and others.

The public cloud segment is projected to showcase considerable growth during the forecast period as these services are specifically designed for startups and SMEs. The market will derive growth from the increasing number of startups and SMEs across the globe.

By Enterprise Size Analysis

Preferential Shift of SMEs to Public Cloud Services from On-Premises Will Aid Market Growth

Based on the enterprise size, the market is classified into small and medium enterprises (SMEs) and large enterprises.

The SME segment is expected to register the highest CAGR during the forecast period. The growth is mainly attributable to the increasing shift of startups and small enterprises towards the public cloud from traditional on premise. According to Eurostat, in 2018, around 26% of enterprises in Europe have adopted computing services in their business units.

The large enterprise segment is estimated to rise at a steady rate, owing to rising adoption of SDWAN solutions to eliminate implantation of immense hardware in office premises.

By Industry Analysis

Rising Adoption of Cloud Services across Telecom & IT Industry to Boost the Demand for Managed Services

Based on the industry, the market is divided into telecom & IT, retail, media & entertainment, educational institutions, and others (government, etc.).

Telecom & IT is likely to capture a major share during the forecast period owing to the rising adoption of cloud services. Market players are emphasizing towards the development of advanced software and services to cater to the demand across industries.

Other segments such as retail, educational institutions, and media & entertainment are expected to grow at a considerable pace during the forecast period.

REGIONAL INSIGHTS

North America to Dominate the Market Owing to Rising Investment by Governments

On the basis of region, the market has been studied across five foremost regions namely North America, Europe, Asia Pacific, the Middle East and Africa, and Latin America.

North America is expected to hold a major share in the market. Countries such as the US and Canada have developed economies, which contribute to a larger market share in the region. The growth is mainly attributable to the rising investment by key players and the government for the adoption of cloud services. Moreover, the increasing internet penetration rates and rising cloud adoption are some of the factors expected to drive the growth of the market.

Several companies in Asia Pacific are expected to invest in the development of various digital projects and events. For instance, in July 2020, in India, Google LLC proposed to invest around USD 10 billion. The investment would assist to implement various business strategies including the development of various IT service projects and others.

Europe is expected to exhibit a significant CAGR during the forecast period. The growth is attributable to the increasing investment for the development of secure networking infrastructure across industries such as IT & telecom, retail, and others. Countries such as Germany, Spain, and Benelux (Belgium, Netherlands, and Luxembourg) are highly investing to adopt advanced networking services.

The regions such as the Middle East and Africa and Latin America are predicted to grow with a modest growth rate. The growth is owing to the rising adoption of services and software across countries such as UAE, Israel, South Africa, Brazil, and others. According to an analysis by Cisco System, Inc., the cloud index (2013-2018) for countries in the Middle East and Africa is expected to show a maximum traffic growth rate of around 54%.

KEY INDUSTRY PLAYERS

Market Players to Focus on Mergers and Acquisitions to Increase their Market Share

Market players such as Cisco System, Inc., Aruba (Hewlett Packard Enterprise), Extreme Networks, Inc., among others are focusing on adopting various business strategies such as mergers and acquisitions. These business strategies would assist players to strengthen their global presence and cater to advanced services across industries. For instance,

• In July 2020: Hewlett Packard Enterprise completed the acquisition of Silver Peak, provider of SD-WAN (Software-Defined Wide Area Network). The acquisition was completed to merge Aruba Network with Silver Peak to expand HP’s business portfolio of managed networking services.

LIST OF KEY COMPANIES PROFILED:

• Aruba (Hewlett Packard Enterprise Company) (California, United States)


• NETGEAR, Inc. (California, United States)


• Cisco System, Inc. (California, United States)


• Prodec Networks (Twyford, Berkshire)


• APSU, Inc. (Chattanooga, Tennessee)


• Fortinet, Inc. (California, United States)


• Mindsight (Illinois, United States)


• Total Communications, Inc. (Connecticut, United States)


• Huawei Technologies Co., Ltd. (Shenzhen, China)


• DynTek, Inc. (California, United States)


• Extreme Networks, Inc. (California, United States)

KEY INDUSTRY DEVELOPMENTS:

• August 2020: Cisco system, Inc., acquired ThousandEyes, a provider of internet and intelligence platform. The acquisition was completed to integrate ThousandEyes’s capabilities to strengthen Cisco’s core enterprise managed networking and cloud, and other services.


• June 2020: Aruba Networks launched Aruba ESP (Edge Services Platform), a cloud-native platform based on AI (artificial intelligence). This platform was developed to predict and deliver an advanced experience to the users.

REPORT COVERAGE

The market research report provides a detailed market analysis and focuses on key aspects such as leading companies, product and services types, and leading applications of the product. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the advanced market over recent years.

Report Scope & Segmentation