IDC EXECUTIVE BRIEF
Intelligent IP-Based Networks Grow
in Strategic Importance to
Business
February 2008
www.idc.com
Adapted from Why Is Networking Growing Faster than the Rest of IT? by Abner Germanow, IDC Link
Introduction
F.508.935.4015
P.508.872.8200
According to IDC research, enterprise networking spending has
historically exhibited a higher growth rate than spending for the
overall IT market. Five core trends are combining to drive network
capital expenditures faster than IT spending. This Executive Brief
examines these trends and their impact on enterprise networks.
Network Growth Outpaces Overall IT Growth
Global Headquarters: 5 Speen Street Framingham, MA 01701 USA
IDC's enterprise networking market data has historically tracked and
predicted market growth at rates 1 to 3 percentage points above
overall IT spending forecasts. In 2006, the worldwide LAN switch
market, the core revenue stream of the enterprise networking market
at $17.4 billion, grew 16.2%. Spending on enterprise LAN switch,
router, WLAN, IP telephony equipment, and security appliances grew
17% to reach $35.4 billion in 2006 spending.
A significant portion of this growth stems from the ramp in hybrid
TDM/IP PBXs as vendors phase out TDM-only systems. Counting all
telephony in these numbers would temper the results. However,
removing IP telephony from the equation still produces growth of
10.4% year over year.
Other IT markets such as the worldwide server market (6%), the
storage market (6.2%), or packaged software market (8%) are
growing slower than the networking market. Was 2006 a one-time
anomaly? Is this growth simply an echo refresh of Y2K upgrades
seven years ago?
While some of the growth can be attributed to Y2K refresh, IDC
believes there are several structural reasons why the networking
market will continue to grow faster than the rest of the IT market for
at least the next five years.
