Singapore enterprise networking spend edges toward $6.75B

Singapore enterprise networking spend edges toward $6.75B

Driven by digital transformation, IT modernisation and growing cyber threats.

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The Singapore enterprise market is expected to spend close to S$6.75 billion (US$5 billion) on networking infrastructure by 2025, with the segment set to see rapid growth in the coming years.

New analysis suggests enterprise spending on networking infrastructure in Singapore is expected to increase at a compounded annual growth rate (CAGR) of 6.6 per cent over the years between 2020 and 2025.

It is anticipated this growth will be driven by a number of factors, including the evolving cyber threat landscape and the broader ongoing IT modernisation and digital transformation efforts of local businesses, according to analyst firm GlobalData.

GlobalData’s analysis points to a networking market in Singapore worth up to S$6.49 billion in 2025 alone, with the anticipated growth supported, in part, by a rise in the volume and magnitude of information security threats and cyber attacks on enterprise IT assets in recent times.

According to GlobalData, such threats have been driving enterprises to adopt advanced networking solutions.  

Of the entire enterprise networking sector, the networking software segment is likely to be a major performer over the next few years. Although currently a smaller contributor to the overall market value, networking software is anticipated to enjoy a CAGR of 16.7 per cent in enterprise spending over the forecast period, 2020-2025. 

Enterprise spending on SD-WAN specifically is expected to increase at a CAGR of 22.1 per cent over the forecast period as the growing adoption of public cloud services drives demand for SD-WAN technology to secure cloud deployments, according to the analyst firm.

COVID-19 has also played a role in the growth of the market segment.

“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,” said Pragyan Tarasia, senior research analyst at GlobalData.

Among the enterprise networking hardware, networking software and networking service segments, the latter is expected to account for the largest share of the total enterprise network spending in Singapore to 2025.

The networking service segments in GlobalData’s tally comprise 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.

According to Tarasia, of all the networking service categories, enterprise spending on managed network services will grow at the fastest CAGR of 9.2 per cent 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,” she said.  

Although the large enterprise segment will account for the biggest share of the total enterprise networking spending in Singapore throughout the forecast period, the combined spending from micro and small- and medium-sized enterprises (SMEs) is expected to increase at a CAGR of 6.7 per cent 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,” Tarasia said.

Cisco, VMware, Arista, Hewlett Packard Enterprise (HPE), Extreme Networks and Palo Alto Networks are all among the top 10 most powerful enterprise networking vendors globally, as subjectively ranked by sister publication Network World earlier this year.

Vendors that made it into the top 10 most powerful in enterprise networking list demonstrated that they have a clear vision for the future of networking and that they have a solid game plan for achieving their goals.

Tags NetworkingSingapore


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