IDC: enterprise driving uptake in cellular solutions

31 Jan 2019

While LTE macro networks have been in place for several years in the consumer market, LTE is seeing stronger uptake as a way to provide reliable failover or as a primary WAN connectivity solution in the enterprise, according to a new report from IDC.

Heightened demand is fed by new enterprise applications requiring cost-effective ways to connect to the cloud or, in another instance, internally across a geographically dispersed private network.

"The app-driven economy continues to change how enterprises architect networks, given the mission-critical nature of network connectivity. As such, we expect enterprise network, IT, and IoT practitioners to lean more heavily on LTE routers as an incremental connectivity option for existing wired connections, or even as the primary connection depending on the use-case," IDC VP of network infrastructure Rohit Mehra said.

According to the report, Worldwide LTE Router/Gateway Forecast, 2018-2022, IDC sees LTE router/gateway suppliers benefiting from these trends, the supplier landscape remains largely fragmented. IDC has observed a number of leading suppliers begin to distance themselves in revenue and growth metrics; however, differentiation will remain challenging as the market matures.

Early-stage markets often require thought leadership and ecosystem development to ignite stronger growth patterns. As such, IDC observes three main use cases that LTE router/gateway suppliers are moving to address:

Branch connectivity: Products designed for stationary, onsite functionality are often integrated with LTE, WiFi, and wired functionality. In addition, solutions often incorporate enhanced security features (e.g., firewall, threat management). An overarching software-defined component, often delivered from the cloud, can be incorporated to deliver enhanced management and coordination.

Mobile connectivity: Mobile LTE routers are often affixed to vehicles, rail systems, or other "on the move objects" that require connectivity. An emerging use case is for public safety networks, including first-responder networks, where cellular connectivity can meet the stringent demand for mission-critical communications.

Internet of Things/M2M: These solutions, which can be gateways, often offer a base feature such as protocol conversion but may incorporate the advanced features included in branch and mobile solutions as well.

Worldwide, IDC expects the LTE router/gateway market to grow from $804.2 million in 2018 to $1.9 billion in 2022 at a compound annual growth rate (CAGR) of 27.4%. Asia Pacific, including Japan and China, will be the fastest growing region over the forecast period supported by continued expansion and/or densification of macro LTE networks in the region. That said, North America will still command the largest share globally.

"The enterprise LTE appliance market is seeing rapid uptake globally, prompting incumbent suppliers and new players to seek differentiation to demonstrate value. Some are focusing on the software layer, or wireless SD-WAN, while others are leaning on their technology heritage in addressing IoT requirements,” IDC senior research analyst for IoT and mobile network infrastructure Patrick Filkins said.

“Whatever the strategy, branch, mobile, and IoT are emerging as the three main use cases for LTE routers and gateway."

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