Column: Boom times ahead for networking market

The PC market may be soft but networking is growing at a phenomenal rate. Admittedly in some cases it's coming from a near-zero base.

Take switching, for example. According to IDC New Zealand, New Zealand switching revenue increased 362% from 1994 to 1995. Of course, unit numbers aren't great - 110 in 1994 and 540 in 1995. And nor are revenues huge - $2.1 million in 1994 and $7.8 million in 1995.

Several years ago, though,, no one had even heard of switching and now network managers all around the country are finding it's an easy and cheap way to divvy up valuable bandwidth to various workgroups and power users.

For 1996, the number of switches sold is forecast to grow another 43.6% to 1190 units, or $11.2 million in revenue.

And the fact that IDC is now tracking networking, points to the growth of the market. Until now IDC has only followed PC sales, but next month it will release the first annual report on LAN technology produced in this country. IDC Auckland-based researcher Dinesh Kumar says the report carries predictions to the year 2000.

The PC market grew 2% in terms of units sold in 94 and 95: 200,550 PCs sold in 1994 and 204,565 PCs in 1995. This year sales will pick up by an estimated 11%, to 230,000, or $781 million in revenue.

PC sales represent potential networking sales. Everything is networked, networks are by necessity growing faster and LANs are being connected to external networks. Although switches have taken over many of the jobs routers have performed in the past, routers are in big demand to connect to the Internet. So when you add to switches, network interface cards, hubs, and routers the networking business looks increasingly lucrative.

Compaq has realised the value in the network and it plans to supply not only PCs and NICS, but hubs, routers and network management as well. It recently acquired hub manufacturer Thomas-Conrad and another company, Networth, for its 100Mbit/s technology.

And that's just the hardware. There's networking software (network operating systems, network management, network backup and storage) and even more of a money spinner is the expertise it takes to design, integrate, implement, and manage a network. Demand for people with the skills and knowledge on how to do this stuff is as voracious as its possible to get. So viva la network!

Other figures for networking hardware are:

Routers:

1994 Units - 1500. Revenue $20.5 million.

1995 Units - 2400. Revenue $27.4 million.

1996 Units 3720. Revenue $36.1 million.

In 1995 units grew 48% and revenue grew 34%.

This year units will grow 55% and revenue will grow 31.8%.

Hubs:

1994 Units - 5540. Revenue $17.1 million.

1995 Units - 7632. Revenue $21.8 million.

1996 Units - 9387. Revenue $25.2 million

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