REPORT

Table of Contents

Section Page

ABOUT THIS REPORT vi

SECTION 1 — MARKET OVERVIEW 1

1.1 Introduction 2

1.1.1 Switching Architecture 3

1.1.2 Stand-alone, Stackable and Modular Switches 3

1.1.3 Speed 5

1.1.4 Power over Ethernet 7

1.1.5 Unmanaged versus Managed Switches 8

1.1.6 Security 9

1.2 2009-2010 Market Highlights 10

1.3 2011 Market Forecast 11

1.4 SME Trends 12

1.4.1 Commodity Switches Often Used by Small Businesses 12

1.4.2 Fast Ethernet Prevails 13

1.4.3 Cabling Considerations 13

1.4.4 Growing Need for Greater Security 14

1.4.5 Less Demand for PoE by SMEs 15

1.5 Large Enterprise Trends 15

1.5.1 Traditional Spending Rationales Remain Unchanged 15

1.5.2 Formal Enterprise Buying Cycle 16

1.5.3 Enterprise Switch Deployment Strategies 16

1.5.4 Use of 10 Gbps Increases 18

1.5.5 Impact of Enterprise IP Telephony 19

1.5.6 Highly Competitive Market Creating Challenges for Vendors 19

1.5.7 For Switches, Green IT Means Electrical Efficience 20

1.6 2012-2013 Market Forecast 22

1.7 Manufacturer Snapshots 23

SECTION 2 — MARKET AT A GLANCE 28

SECTION 3 — MANUFACTURER PROFILES 34

3.1 Alcatel Lucent 35

3.2 Avaya 44

3.3 Brocade Communications Systems 54

3.4 Cisco Systems 62

3.5 Dell Computer Corp 71

3.6 D-Link Systems 76

3.7 HP 82

3.8 Other Manufacturer 91

SECTION 4 — MARKET DETAIL 97

List of Exhibits

Exhibit Page

Market At A Glance

Exhibit 2.1 Product Revenues by Manufacturer (End-User Levels), 2010 29

Exhibit 2.2 Switch Shipments by Manufacturer, 2010 29

Exhibit 2.3 Product Revenues by Manufacturer (End-User Levels), 2011 30

Exhibit 2.4 Switch Shipments by Manufacturer, 2011 30

Exhibit 2.5 Switch Shipments by Speed, 2009-2011 31

Exhibit 2.6 Switch Shipments by Type, 2009-2011 31

Exhibit 2.7 Switch Shipments by PoE, 2009-2011 31

Exhibit 2.8 Switch Shipments by Industry, 2009-2010 31

Exhibit 2.9 Switch Shipments by Province, 2009-2010 32

Exhibit 2.10 Switch Installed Base, by Speed, 2009-2011 32

Exhibit 2.11 Switch Shipments in Ports Total Canadian Market, 2009-2013 33

Manufacturer Profiles

Exhibit 3.1 Alcatel Lucent 42

Exhibit 3.2 Avaya 52

Exhibit 3.3 Brocade Communications Systems 60

Exhibit 3.4 Cisco Systems 69

Exhibit 3.5 Dell Computer see Exhibit 3.8

Exhibit 3.6 D-Link Systems see Exhibit 3.8

Exhibit 3.7 HP 89

Exhibit 3.8 Other Manufacturers 95

Market Revenues and Shipments

Exhibit 4.1 Product Revenues (at End-User Levels) by Manufacturer, 2009-2011 98

Exhibit 4.2 Switch Shipments by Manufacturer, 2009-2011 98

Shipments by Speed Segment

Exhibit 4.3 Switch Shipments by Speed, 2009-2011 99

Exhibit 4.4 Switch Shipments by Speed, by Manufacturer, 2009 99

Exhibit 4.5 Switch Shipments by Speed, by Manufacturer, 2010 99

Exhibit 4.6 Switch Shipments by Speed, by Manufacturer, 2011 99

Shipments by Switch Type Segment

Exhibit 4.7 Switch Shipments by Type, 2009-2011 100

Exhibit 4.8 Switch Shipments by Type, by Manufacturer, 2009 100

Exhibit 4.9 Switch Shipments, by Type by Manufacturer, 2010 100

Exhibit 4.10 Switch Shipments by Type, by Manufacturer, 2011 100

Shipments by PoE Segment

Exhibit 4.11 Switch Shipments by PoE, 2009-2011 101

Exhibit 4.12 Switch Shipments by PoE, by Manufacturer, 2009 101

Exhibit 4.13 Switch Shipments by PoE, by Manufacturer, 2010 101

Exhibit 4.14 Switch Shipments by PoE, by Manufacturer, 2011 101

Shipments by Industry

Exhibit 4.15 Switch Shipments by Industry, 2009-2010 102

Exhibit 4.16 Switch Shipments by Industry, by Manufacturer, 2009 102

Exhibit 4.17 Percent Switch Shipments by Industry, by Manufacturer, 2009 102

Exhibit 4.18 Switch Shipments by Industry, by Manufacturer, 2010 103

Exhibit 4.19 Percent Switch Shipments by Industry, by Manufacturer, 2010 103

Shipments by Province

Exhibit 4.20 Switch Shipments by Province, 2009-2010 104

Exhibit 4.21 Switch Shipments by Province, by Manufacturer, 2009 104

Exhibit 4.22 Percent Switch Shipments by Province, by Manufacturer, 2009 104

Exhibit 4.23 Switch Shipments by Province, by Manufacturer, 2010 105

Exhibit 4.24 Percent Switch Shipments by Province, by Manufacturer, 2010 105

Installed Base

Exhibit 4.25 Installed Base of Switches by Speed, 2009-2011 106

Exhibit 4.26 Installed Base of Switches by Speed, by Manufacturer, 2009 106

Exhibit 4.27 Percent Installed Base of Switches by Speed, by Manufacturer, 2009 106

Exhibit 4.28 Installed Base of Switches by Speed, by Manufacturer, 2010 107

Exhibit 4.29 Percent Installed Base of Switches by Speed, by Manufacturer, 2010 107

Exhibit 4.30 Installed Base of Switches by Speed, by Manufacturer, 2011 107

Exhibit 4.31 Percent Installed Base of Switches by Speed, by Manufacturer, 2011 107

About This Report

NBI/Michael Sone Associates is pleased to present the 2011 Edition of the Canadian Ethernet Switch Market Report.

Examining the period 2009-2013, this report describes the Canadian enterprise market for Ethernet Layer 2/3 switches, the data switching infrastructure used by businesses to connect servers, workstations, IP telephones, digital security cameras and other computer network nodes and endpoints. At 110 pages and with 50 exhibits, the report provides detailed information on annual switch shipments by total ports, port speed, switch type (fixed/stackable versus modular), Power over Ethernet (PoE), vertical industry, province and installed base. Market data is summarized using NBI/Michael Sone Associates’ popular Market at a Glance presentation and detailed in tabular exhibits.

Also included is a discussion of trends in the small/medium enterprise (SME) and enterprise market segments.

Please note that, except where specific models are explicitly mentioned, 8-port and smaller unmanaged consumer-grade switches such as those sold in retail computer stores have been excluded from this report. Although sometimes used in small offices/home offices (SOHOs), these inexpensive simple switches lack the functionality required to be considered business-grade products. Also excluded is Layer 4-7 switching and routing products, wireless LAN (WLAN) and security solutions.

All reported revenues are stated in Canadian dollars unless otherwise noted and reported at end-user retail levels (rather than manufacturer wholesale levels). Our revenue estimates represent proceeds from the sale of Ethernet switches in the Canadian business market only, and exclude revenues from the sale of any add-on non-switching options as well as consulting and professional services including fees for installation, maintenance contracts and service.

The switch market is extremely price competitive, particularly in the SME segment, and our estimates of per-port pricing, while suitable for comparisons, should not be used for purchasing purposes. Per-port pricing varies by specific configuration, media choice, optional features, quantity and discounts. Modular switches in particular have widely varying per-port prices. In addition to factors such as configuration and slot population, there are several variable common costs including chassis selection, line card/blade port density, single or redundant switching fabrics, redundant power supplies and fans, other high-availability options, optional WAN interfaces, and optional routing and security functionality.

As with all NBI/Michael Sone Associates reports, information has been gathered from primary sources – chiefly, from the industry participants themselves. Our data is also supplemented where noted with economic background information from secondary sources including the Bank of Canada, Statistics Canada and Industry Canada..

This report, together with others on PBX, Unified Communications, Automatic Call Distribution (ACD) and other inbound contact centre equipment comprises NBI/Michael Sone Associates’ research on the Canadian CPE market. Our other reports describe local voice, wireless, data and Internet service sectors.