Europe 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 & Medium Enterprises (SMEs) and Large Enterprises), By Industry (Telecom & IT, Retail, Media & Entertainment, Educational Institutions, and Others) and Country Forecast, 2020-2027

The Europe cloud managed networking market size was USD 839.5 million in 2019 and is projected to reach USD 2,929.6 million by 2027, exhibiting a CAGR of 18.0% during the forecast period.

The market size of cloud managed networking in Europe is primarily driven by the increasing investment in cloud computing technology (ITaaS, PaaS, IaaS, and SaaS). Organizations are deploying the SaaS model to save their cost and time, and eliminate the need for hardware and resources required to host networking services. According to BMC Software Inc., the global investment in the software-as-a-service (SaaS) market was around USD 102.06 million in 2019 and it is expected to reach USD 140.63 million in 2022. Also, the rising adoption of software defined network (SDN) solutions across enterprises and the increasing data traffic are expected to boost the adoption of cloud managed networking.

Increasing Demand for Network Solutions amid COVID-19 Pandemic to Augment Growth

Cloud managed networking in Europe has experienced a healthy impact of the COVID-19 pandemic during the first quarter of 2020, owing to the increasing demand for network solutions as the overall IT industry slowed down and IT budgets and investments are on hold. Looking at several preliminary indicators from the first quarter of 2020, a minor decline can be observed in the overall demand for managed networking devices across the European countries. Further, the pandemic would impact the spending of hardware, software, and services due to the reduction of supply and demand.

The European ICT spending is expected to see a drop in the growth of around 0.1% - 0.2% in 2020 in terms of the overall technology domain and a slightly negative trend on software for a part of the year. This is owing to the effects of currency depreciation, oil price changes, delay in making timely payments by the government, lay-offs in the private and public sector, and delay in supply chains, among others. To strengthen their business models and expand their presence during the pandemic, key players are focusing on completing various corporate strategies.

• For instance, in March 2020, Aruba Networks, in response to COVID-19 has donated thousands of advanced connectivity kits worth USD 50 million required for the immediate provisioning of pop-up clinics, testing sites, and temporary hospital facilities. The company donated connectivity kits in countries such as Germany, France, the United Kingdom, Belgium, Spain, Italy, Sweden, Netherlands, Czech Republic, Switzerland, the U.S., Australia, Canada, Singapore, New Zealand, Malaysia, and the Philippines.

LATEST TRENDS

Advancement of Edge Computing Technology, Wi-Fi 6, and Others is a Vital Trend

The increasing adoption of edge computing technologies, SD-WAN, Wi-Fi 6, multi-domain control, and others, are considered as few of the emerging trends in the market. The Wi-Fi 6 technology aids enterprises and service providers to support emerging applications on the wireless LAN (WLAN) infrastructure and offer an advanced custom of service. Companies in the Wi-Fi market are focusing on developing and introducing advanced Wi-Fi 6 across enterprises by investing in various projects for marketing purposes.

• For instance, in 2018, Cisco System, Inc., in partnership with Samsung Group, Boingo, and Global Reach Technologies, launched the Cisco-led OpenRoaming project. This project aided enterprises to participate and support the adoption of Wi-Fi across their IT business units. Its objective was to create an efficient and secure medium between Wi-Fi and LTE networks and involved public Wi-Fi.

DRIVING FACTORS

Increasing Adoption of Software Defined Network Solutions to Boost Growth

In the foregoing decade, an enormous increase in the scope and complexity of data traffic has created a need for solutions to streamline and proficiently manage the network infrastructure. Software defined network (SDN) solutions can resolve these complications by offering flexible traffic management for improving the efficiency of the network infrastructure. The majority of communication service providers (CSPs) are investing in SDN technology to deploy end-to-end network and service management solutions.

According to Cisco System, Inc., around 58% of major organizations worldwide have adopted SD-WAN in their commercial IT units. Around 94% of the respondents are estimated to implement advanced intent-based SD-WAN in their commercial unit in the next 2 years. With the increasing adoption of SDN solutions across enterprises, the market for cloud managed networking is expected to boost during the forecast period.

RESTRAINING FACTORS

Lack of Awareness & Rising Security Concerns to Impede Adoption of Networking Services

Although managed networking solution provides several features such as reliability, better operability, and flexibility, a majority of end-users is still comprehensively dependent on on-premises networking tools and services. Some inhabitants face difficulties to adopt cloud services owing to several security concerns.

Also, the lack of awareness about cloud managed networking solutions among enterprises across the European countries, especially in rural areas or where IT service and network connectivity is not available, is expected to hinder the growth of the market. Other factors such as reduced adoption rate, low internet penetration rate, and less cloud adoption are expected to restrain the Europe cloud managed networking market growth.

SEGMENTATION

By Type Analysis

Hardware Segment to Hold Maximum Share Backed by High Usage of WAN and LAN

Based on the type, the market for cloud managed networking is segregated into hardware, software, and cloud services. Amongst these, the hardware segment is estimated to capture the maximum share in the market. The growth is attributable to the increasing demand for hardware and accessories used for connecting computer networks, such as local area network (LAN) and wide area network (WAN).

The software segment is expected to grow significantly owing to the rising demand for software-defined networking (SDN) solutions among startups and SMEs. As startups and SMEs have low budgets while initiating their business, they mostly prefer to adopt standard software and public cloud services.

The cloud services segment is estimated to grow with an utmost CAGR during the forecast period owing to the increasing adoption of software-as-a-service (SaaS) models among large enterprises.

By Deployment Analysis

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

In terms of deployment, the market for cloud managed networking is categorized into public cloud and private cloud. The public cloud segment is likely to grow with the highest CAGR during the forecast period. The segment will grow with the rising demand for SaaS models among startups and SMEs.

The private cloud segment is estimated to capture the maximum market share during the forecast period. The growth is attributable to the rising adoption of cloud services and software-defined wide area network (SDWAN) solutions among large enterprises.

By Enterprise Size Analysis

Shift towards Cloud-based Services Will Aid Growth of Small and Medium Enterprises Segment

Based on enterprise size, the small and medium (SMEs) enterprises segment is expected to grow with the highest CAGR during the forthcoming period. This is likely to occur because of the increasing shift of enterprises towards cloud-based IT solutions and services. According to Eurostat, countries such as the Netherlands, Belgium, Spain, and Italy have the highest cloud adoption rate.

The large enterprises segment is estimated to hold the major share in the coming years. For instance, according to Eurostat, in December 2018, around 26% of large enterprises in Europe have already implemented cloud computing services.

By Industry Analysis

Telecom & IT Segment to Generate Major Share Fueled by High Demand for Cloud Services

Based on the industry, the cloud managed networking for the European market is divided into retail, telecom & IT, educational institutions, media & entertainment, and others (government). The telecom & IT segment is likely to capture a major share in the near future owing to the increasing demand for cloud services.

Other segments such as retail, educational institutions, and media & entertainment are expected to grow at a considerable pace during the forecast period. The growth is backed by the increasing adoption of networking hardware such as the hub, switch, router, bridge, gateway, modem, repeater, access point, and others.

COUNTRY INSIGHTS

The market for cloud managed networking in Europe has been studied across seven foremost countries, namely, Germany, France, Italy, Spain, Switzerland, Benelux, and the rest of Europe. Germany is expected to capture a major share in the market. The growth in the German cloud managed networking market is driven by the fact that end-users/enterprises are shifting their focus towards developing advanced IT units enabled with cloud platforms. To cater to the customized demand for cloud services, key providers are focusing on developing advanced hardware and services to expand their offerings across various European countries.

• For instance, in April 2019, Versa Networks, a provider of secure cloud IP platform, launched a cloud-managed service. This cloud service is referred to as an advanced security solution for networking that helps to simplify the complexity related to the wide-area network (WAN) transformation.

France is expected to develop with a significant CAGR during the forecast period. The market in France is driven by the rising demand for cloud computing across industries such as IT & telecom, BFSI, government, media & entertainment, and others. According to the International Trade Administration (ITA), the overall market for cloud computing in France stood at around USD 11.23 million in 2018.

In countries such as Italy and Spain, the development of various smart city projects will also boost the adoption of networking hardware and software. Additionally, innovations in connecting technologies such as the internet of things (IoT), Wi-Fi, and others, would support growth in the near future.

Switzerland and Benelux are two of the major countries for adopting cloud services. This growth is attributable to the increasing demand for managed IT and networking services among startups and SMEs. According to the Swiss Official Gazette of Commerce, in 2019, in Switzerland, around 44,482 small and medium enterprises were founded.

KEY INDUSTRY PLAYERS

Market Players Focus on Development and Launch of Advanced Networking Services to Intensify Competition

Companies such as Extreme Networks, Inc., Meraki (Cisco System, Inc.), and Aruba (Hewlett Packard Enterprise) are the major players in the Europe market. Cisco System, Inc. provides a wide range of cloud managed networking products and services under the brand “Meraki.” Some of the key solutions under Meraki include wireless LAN (MR56, MR46E, MR46, MR36, MR86, MR76, MR53E, MR53, MR52, MR42E, MR42, MR33, MR84, MR74, MR70, MR55, MR45 and other) and security appliances (MX68CW Security & SD-WAN Appliance, MX67C SIM Slot, MX64, and other).

The company is currently focusing on advancing its cloud managed network capabilities by applying the latest technologies such as machine learning and advanced analytics. It is also trying to implement corporate strategies such as product launch, mergers, partnerships, and acquisitions.

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


• CommScope, Inc. (North Carolina, United States)

KEY INDUSTRY DEVELOPMENTS:

• June 2020: CommScope launched RUCKUS Cloud, a network management-as-a-service platform enabled with artificial intelligence (AI). The platform would assist enterprises and managed service providers (MSPs) to effortlessly create and handle converged wired and wireless networks.


• December 2019: Juniper Networks, a provider of software-defined wide-area networking (SD-WAN), enhanced its offerings with LAN support and software-defined networking (SDN) products and services.

REPORT COVERAGE

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

Report Scope & Segmentation