Service Provider Router Market – Global Industry Analysis, Size, Share, Growth, Trends, and Forecast, 2019 – 2027

July 5, 2021

A router is a network device that transfers data packets between computer networks. Routers that work on layer 2 and layer 3 of the International Organization for Standardization (ISO)/Open Systems Interconnection (OSI) model are known as service provider routers.

Rise in industrial revolution 4.0 has accelerated adoption of machine-to-machine connected devices and industrial robots in various industries. Increase in adoption of industrial robotics to decrease production costs by reducing production waste and time, improve quality, reliability, and security requires strong networking to send data packets for m2m communication. For instance, according to the International Federation of Robotics, in 2017, the supply of industrial robots was 381,000 units globally. This supply is expected to reach 630,000 units by 2024. Similarly, increase in adoption of advanced technologies such as IoT/machine-to-machine (m2m) is a key factor driving the market. For instance, by 2024, number of m2m connected devices is expected to reach 14.6 million. Hence, rise of industrial revolution 4.0 has fueled the need for strong networking which, in turn, has boosted the demand for the service provider router market.

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In addition, increase in adoption of cloud platform has accelerated the service provider router market globally. Organizations adopt cloud platform for task automation and cost optimization. Deployment of cloud platform helps organizations for better control on pricing and better utilization of advanced technology development. Increase in computing instances on cloud data centers is a key factor driving the service provider router market. By 2024, 94% of the workload and computing instances are estimated to be processed at cloud data centers, with only 6% processed at traditional data centers.

Based on region, the service provider router market is segmented into North America, Europe, Asia Pacific, South America, and Middle East & Africa
North America held a dominant position in the global service provider router market in 2018 and is expected to retain its dominance throughout the forecast period. The U.S. and Canada are major countries that drive the service provider router market in this region. The dominant position of the market in the region can be attributed to presence of market leaders such as Huawei Technologies Co., Ltd., Cisco Systems, Inc., and Nokia Corporation and increasing complexity in network infrastructure.
The service provider router market in Asia Pacific is expected to expand at a high CAGR during the forecast period. India, China, Japan, and Australia are some of the key countries which drive the service provider router market in the region. Increase in number of enterprises shifting from conventional platforms to cloud platforms fuels the market in the Asia Pacific.

Based on router type, the service provider router market is segmented into service provider core router and service provider edge router. The service provider edge router segment held a dominant position in the market in 2018 and is expected to retain its dominance throughout the forecast period with a high growth rate. Increase in requirement of a strong network which connects billions of devices have accelerated the demand for service provider edge router which have an ability to provide service to residential and business on a common Infrastructure.