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Efforts around the world to update power network infrastructure to incorporate tools such as smart grid functionality will be one of the main drivers for high Power over Ethernet (PoE) demand in the coming year, according to a new report.
Research conducted by Technavio forecast that between 2016 and 2020, the global market for PoE chipsets is set to expand at a compound annual growth rate of nearly ten per cent.
PoE involves transferring DC electrical current over standard Ethernet cables, including Cat5, Cat5e and Cat6. Technavio noted that the main advantage this provides is that it means only a single cable is required for both power and data transfer, thereby reducing costs for cabling installation.
Sunil Kumar Singh, a lead embedded systems research expert at the research firm, stated: "The increasing broadband penetration and growing network traffic will increase the requirement for high-speed Ethernet systems, thus driving the global PoE chipset market."
The report divided the global market for PoE equipment into three regions, the largest of which is the Americas, which was responsible for almost half of revenue (48 per cent) in 2015. This was followed by Europe, the Middle East and Africa (EMEA), with 35 per cent, while Asia-Pacific accounted for around 17 per cent.
Within the EMEA region, the key trend affecting the PoE market in the coming years will be the rollout of smart grids in order to replace ageing electrical infrastructure. Between 2002 and 2015, more than 470 separate smart grid projects were launched across 47 European countries, amounting to investment of more than $350 billion (£286 billion) in this area.
"Consumers and business organisations have realised the efficiency gains of smart grids," the report noted. "Moreover, government regulations to reduce carbon emissions is also one of the major factors driving the investment in smart grids."
In addition, Technavio observed that businesses are facing growing networking demands for their operational needs from pressures such as "video growth, network-based businesses, virtualisation, and cloud computing".
This, coupled with a competitive business environment, is prompting enterprises to adopt technology such as 10/40GbE switches and routers, Technavio stated.
These are trends that will be repeated elsewhere in the world. The research noted, for example, that in developed countries such as the US where there is already widespread penetration of high-speed broadband capabilities, demand will be particularly high.
In addition, Technavio noted: "There are also many retail shops that offer access to the internet on the go with high-speed broadband, requiring advanced Ethernet switching and routing appliances."
