Preparing for Wi-Fi 7: Is the Networking Industry Ready?
September 22, 2024
Note: We reveal investment insights through the quotes of top business leaders.
Key Takeaways
- The networking industry is actively innovating to meet the demands of Wi-Fi 7, with companies like Cloudflare and Microsoft focusing on multi-cloud technologies and enhanced security measures.
- Infrastructure challenges must be addressed promptly, as Cisco and HPE emphasize the need for immediate solutions to support Wi-Fi 7 deployment.
- Strong market demand for Wi-Fi 7 is evident, driven by innovative financing options and significant contract growth, particularly noted by Apple and Microsoft.
- Competitive dynamics are intensifying, with companies like Cisco and HPE differentiating through integrated security and performance consistency.
- Key players like Qualcomm are crucial in driving Wi-Fi 7 adoption, launching new products and expanding their enterprise networking solutions.
Current technological advancements in networking
Current advancements in networking are driven by multi-cloud technologies, AI's storage needs, and innovation in infrastructure. Companies like Cloudflare and Microsoft emphasize expanding capabilities and security, while efforts to improve broadband access highlight the industry's response to evolving connectivity demands.
"I guess specifically, maybe because of the impetus of the deal, maybe there was some pent-up demand that maybe this addition of multi-cloud networking technology could maybe expand Cloudflare's reach from a Zero Trust perspective, I'd love to hear your comments there." --- (NET, earning call, 2024/Q1)
"So our stores team is going to continue to work really hard on expanding selection and keeping prices low and speeding up our delivery times and driving our cost to serve down while our Kuiper team is working on how to figure out how to help the 400 million to 500 million households around the world who don't have broadband connectivity get that connectivity and allow them to do a lot of the things we take for granted today with broadband connectivity." --- (AMZN, earning call, 2024/Q2)
""The SNIA SFF Technology Affiliate Technical Work Group (SFF TA TWG) hopes to gain insight into how the increased storage and networking needs driven by the future of AI is shaping the interconnect specification requirements that the industry needs to enable technology advancements", said Paul Coddington, Co-Chair, SNIA SFF TA TWG." --- (CSCO, press release, 2024/09/05)
"And as we go through this shift, we are focused on two fundamental things: First, driving innovation across a product portfolio that spans infrastructure and applications so as to ensure that we are maximizing our opportunity, while in parallel continuing to scale our cloud business and prioritizing fundamentals, starting with security." --- (MSFT, earning call, 2024/Q2)
"Market Leadership and Innovation: Leading the Market: Positions Scope AI as a leader in quantum-resilient security solutions, setting it apart from competitors.Sustainable Growth: Provides a foundation for sustainable growth by continuously adapting to technological advancements in cybersecurity." --- (NET, press release, 2024/07/09)
Infrastructure and challenges for Wi-Fi 7 deployment
The deployment of Wi-Fi 7 faces infrastructure challenges that require immediate attention. Companies like Cisco emphasize the need to address current issues without waiting for standards, while HPE highlights the advanced capabilities of Wi-Fi 7 access points in enhancing network security and operational efficiency.
"The deployment features Wi-Fi 6E for indoor areas, along with the latest generation of outdoor Wi-Fi, enabling fans to stream unlimited content during NCAA Division I football games and other events." --- (HPE, press release, 2024/05/07)
"Deploying Mosaic One for remote service activation and troubleshooting, along with Intellifi® for AI-driven insights and complete control over the home Wi-Fi environment, enables the company to efficiently manage its expansive and diverse network infrastructure." --- (ADTN, press release, 2024/04/30)
"However, these initial deployments aren't waiting for any standards. This is about being able to go and solve the challenges today that these large AI clusters are putting onto the infrastructure." --- (CSCO, event transcript, 2024/06/04)
"In Europe, we see deployments remaining at a high level in markets with low penetration and we are seeing some mature markets starting to upgrade to XGS-PON and 25G PON." --- (NOK, earning call, 2024/01/06)
"Our Wi-Fi 7 APs go far beyond improvements in performance and efficiency to become an intelligent IoT hub, securing the network, distributing the workload, characterizing the environment, and providing a foundation for business and operational analytics." --- (HPE, press release, 2024/04/23)
Market demand and future outlook for Wi-Fi 7
Market demand for Wi-Fi 7 appears strong, driven by innovative financing solutions and significant contract growth. Companies like Apple are focusing on affordability and marketing to stimulate replacement demand, while Microsoft reports an 80% increase in large contracts, indicating robust future prospects for networking technologies.
"We've introduced several financing solutions from installment plans to trading programs that reduce the affordability threshold and therefore, customers tend to buy -- want to buy at the top of the range that is very valuable for us in developed markets, but particularly in emerging markets where the affordability issues are more pronounced." --- (AAPL, earning call, 2024/Q2)
"And our $100,000,000 plus contracts have increased 80% year over year. So those demand the customer dimension, our ecosystem dimension, our long term customer commitments are how we triangulate demand." --- (MSFT, conference, 2024/05/21)
"And, you know, given you're struggling to reduce your net -- your -- reach your net neutral cash position and your margins are sort of near highs, do you see ways to deploy capital more to spur replacement demand in your installed base either with greater device financing, more investment in marketing, more promotions." --- (AAPL, earning call, 2024/Q2)
Competitive landscape in the networking industry
The competitive landscape in the networking industry is marked by strategic differentiation and disciplined execution. Cisco emphasizes its unique integration of security and observability, while HPE highlights the need for consistent performance amidst competition. Nokia expresses confidence in growth, indicating a dynamic and evolving market as companies prepare for Wi-Fi 7.
"Maybe you can talk about the competitive landscape for your business and why should we not assume that pricing pressures are going to significantly rise in this environment as everybody is trying to fight for footprint?" --- (CSCO, earning call, 2024/Q1)
"But if I look at the competitive landscape, by the way, the other thing, when we acquired Avigilon, it's an end to end solution, meaning we are putting in cameras as well as what I would call the operating system of video, the VMS." --- (MSI, conference, 2024/05/20)
"And then, ultimately, on the networking and hybrid cloud is about both gross margin, because of our content is more software and services, while we'll deliver on the bottom-line. So, I think our strategy all coming together, but it's very competitive dynamic there and we have to execute every day with discipline, which is what we did again this quarter." --- (HPE, earning call, 2024/Q1)
"With the continued order intake strength, I remain confident that we will see a stronger second-half performance and that, for the full-year, our Network Infrastructure business will return to growth." --- (NOK, earning call, 2024/Q1)
"And we've also taken a very different approach than our competitors and we think broadly about how do you bring together on a single platform the security capabilities that customers want broadly all the way through observability and it's very difficult across the industry to see anybody taking the position that we have and driving value." --- (CSCO, earning call, 2024/Q1)
Key players in the Wi-Fi 7 ecosystem
Key players in the Wi-Fi 7 ecosystem include Qualcomm, which is actively launching new products and expanding its networking solutions for enterprise adoption. Their collaborations on features like the 6 GHz band further emphasize their significant role in driving growth within the Wi-Fi 7 landscape.
"Device launch coming out later this year. But then in addition to that, we also have new products in industrial and Wi-Fi 7 that will drive growth into this IoT segment as well." --- (QCOM, earning call, 2024/Q2)
"Discover the key collaborations the companies are making on features like the 6 GHz band, Wi-Fi 6E, and Wi-Fi 7: https://t.co/K75GdOxfym https://t.co/kreF57OtU6" --- (QCOM, Twitter, 2024/05/08)
"Additionally, our networking solutions continue to gain traction as the Wi-Fi 7 transition expands to the enterprise." --- (QCOM, earning call, 2024/Q2)
Security implications of Wi-Fi 7 technology
The security implications of Wi-Fi 7 technology are significant, with companies like Fortinet and Palo Alto Networks emphasizing the need for advanced security measures. As organizations face evolving threats, there is a strong focus on integrated security solutions and software-driven network security to mitigate risks associated with new technologies.
"Built on the Fortinet operating system, FortiOS, and the latest, fifth-generation Fortinet security processing unit (SP5), the FortiGate 200G series delivers increased firewall throughput, FortiGuard AI-Powered Security Services, and 5GE ports for the new Wi-Fi 7 wireless standard." --- (FTNT, press release, 2024/05/02)
"In addition to wanting to better understand the security risks, the C-suite and Boards are also now digging deeper into the technologies being deployed to mitigate these risks. Meanwhile, AI continues to generate significant excitement in the market, and many organizations are starting to scale transformative use cases that can enable new sources of revenue and/or drive substantial efficiencies." --- (PANW, earning call, 2024/Q4)
"The customer was impressed with the integrated security, end-to-end visibility and automated response features of our FortiOS operating system. Next, in a 7-figure win, a large utility company, expanded our partnership by signing their first enterprise agreement with us to safeguard their OT environment." --- (FTNT, earning call, 2024/Q2)
"three product platforms as we look towards fiscal 2025 and beyond. Over the last five years, we have driven a significant transition as an industry around more software-driven network security." --- (PANW, earning call, 2024/Q4)
"I'm talking about just fundamentally about product. Fundamentally, I think what the company has bet on for the last 20 odd years And I think that given the threat landscape and given where infrastructure is going and other things coming in like new technologies and compliance and regulatory fundamental change between networking and security is going to accelerate." --- (FTNT, conference, 2024/06/05)