Networking Hardware and Software (IT) - Global Outlook

The global outlook series on the Networking Hardware and Software Industry provides a collection of statistical anecdotes, market briefs, and concise summaries of research findings. Illustrated with 43 fact-rich market data tables, the report offers a rudimentary overview of the industry, and highlights latest trends and demand drivers. Regional markets briefly abstracted and covered include United States, Europe (Spain, United Kingdom, France, Germany). Asia Pacific (China, Hong Kong, India, Korea, Taiwan) Middle East (UAE) and Latin America (Brazil, Venezuela).

The report offers a compilation of recent mergers, acquisitions, and strategic corporate developments. Also included is an indexed, easy-to-refer, fact-finder directory listing the addresses, and contact details of 432 companies worldwide.

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NETWORKING HARDWARE AND SOFTWARE (IT)

A GLOBAL OUTLOOK, JANUARY 2012

CONTENTS

1. OVERVIEW 1
Network Hardware & Software Industry - A Prelude 1
Network and Data Communications Hardware 1
Networking Equipment & Products - Market Analysis 2
Table 1: World Recent Past, Current and Future Analysis for
Information Technology & Communications (ICT) Networking
Equipment and Products by Geographic Segments - US, Europe,
Asia-Pacific (Including Japan) and Rest of World Markets
Independently Analyzed by Annual Sales Value (in US$
Billion) for Years 2010 through 2015 3

Table 2: World 5-Year Perspective for ICT Networking
Equipment and Products by Geographic Segment - Percentage
Breakdown of Annual Sales Value for United States, Europe,
Asia-Pacific, and Rest of World Markets for the Years 2011
& 2015 4

Table 3: World Recent Past, Current and Future Analysis for
Information Technology & Communications (ICT) Networking
Equipment and Products by Product Segments - Switchers &
Routers, WAN/LAN Connecting Devices and Other Markets
Independently Analyzed by Annual Sales Value (in US$
Billion) for Years 2010 through 2015 5

Table 4: World 5-Year Perspective for ICT Networking
Equipment and Products by Product Segments - Percentage
Breakdown of Annual Sales Value for Switchers & Routers,
WAN/LAN Connecting Devices and Other Markets for the Years
2011 & 2015 6
Network Spending on the Rise, Augurs Well for Networking
Equipment and Products Market 6
Table 5: Global Hardware Infrastructure Market (2011):
Percentage Share Breakdown of Spending by Investment Area 7

Table 6: Network Equipment Spending Scenario: Key
Statistical Results of Surveys to Identify Corporate
Willingness to Invest in Network Equipment 7

Table 7: Network Equipment Spending Scenario: Breakdown of
Percentage Number of Respondent Organizations Planning to
Increase their Network Hardware Spending by Investment Area 8
Ethernet Switch Market Recovers after a Temporary Slowdown 8
Table 8: World Carrier Ethernet Switch/Router Market (2010):
Percentage Market Share of Breakdown of Leading Players 9
Optical Switches & Cross Connects 9
Table 9: Global Market for Photonic Switches (2010):
Percentage Share Breakdown of Dollar Sales by Geographic
Region 9
Routers - A High-Tech Way to Reach the Skies 9
Market Dynamics 10
Table 10: World Service Provider Router Market (2010):
Percentage Market Share of Dollar Sales by Leading
Company/Vendor for Cisco, Juniper, Alcatel-Lucent, Huawei,
Tellabs, and Others 11
Networking: “The Boon of Computer Industry” 11
Enterprises - Going Tech-Savvy with Advanced Routers 11
Enterprise Router Market - Competitive Landscape 12
Table 11: World Enterprise Router Market (2010): Percentage
Market Share of Dollar Sales by Leading Company/Vendor for
Cisco, Juniper, H3C, Huawei, and Others 12
VPN Router Market 12
Growing Demand for Wireless LAN Equipment 12
Optical Networking 13
Table 12: Worldwide Optical Networking Equipment Market
(2010 & 2013P): Breakdown of Revenue (In US$ Million) by
Segment 13

Table 13: Worldwide Optical Networking Equipment Market
(2010): Percentage Market share Breakdown by Leading
Manufacturers 13
Network Security Hardware & Software 14
Network Security Threats Continue to Grow Across the Globe 14
Growing Demand for Network Security Appliances and Software 14
Enterprise Network Security Market 14
Table 14: Global Enterprise Network Security Market
(Q1-2011): Percentage Share Breakdown of Value Sales by
Leading Players 15
Enterprise Firewall Market 15
Growing Sophistication of Online Attacks 16
Internet Security Software - Market Analysis 16
Top 10 Anti-Virus Software for 2011 17
Mobile Security Solutions: A Review 17
Security Threats Ripen in Sync with Massive Increases in
Bandwidth in Data Services 17
DOS Attacks Threaten Mobile Network Security 18
Migration of Mobile Networks from Walled Garden to Open
Networks: A Key Driver for Mobile Security Solutions 18
Network Hardware 19
Personal Computers 19
Overview 19
Market Analysis 19
Table 15: PC Penetration in Global Market: Breakdown of
Number of PCs in Use Per 1000 People Years 2008, 2010 &
2014 19

Table 16: World Market for Personal Computers by Geographic
Region - US, Canada, Europe, Asia-Pacific (Including
Japan), Latin America, and Rest of World Markets
Independently Analyzed by Annual Shipments in ‘000 Units
for the Years 2010 through 2015 20

Table 17: World 5-Year Perspective for Personal Computers
by Geographic Region - Percentage Breakdown of Annual
Shipments for US, Canada, Europe, Asia-Pacific (Including
Japan), Latin America, and Rest of World Markets for the
Years 2011 & 2015 21

Table 18: World Market for Personal Computers by Product
Segments - Desktop PCs, Notebook PCs and PC Server Markets
Independently Analyzed by Annual Shipments in ‘000 Units
for the Years 2010 through 2015 22

Table 19: World 5-Year Perspective for Personal Computers
by Product Segment - Percentage Breakdown of Annual
Shipments for Desktop PCs, Notebook PCs and PC Server
Markets for the Years 2011 & 2015 23
Market Snippets 23
Competitive Scenario 24
Table 20: Leading PC Vendors Worldwide (2010) - Percentage
Breakdown by Unit Shipments for Hewlett-Packard, Dell,
Lenovo, Acer, Toshiba, and Others 24

Table 21: EMEA PC Market (2010): Percentage Share Breakdown
of PC Shipments by Leading Vendors 24
Servers 24
Table 22: World Server Market (2012E): Percentage Share
Breakdown of Server Spend by Scale of Data Center 25

Table 23: Worldwide Server Market (2011): Percentage Share
Breakdown of Revenue by Server Class 25

Table 24: Global Server Systems Market (2010): Percentage
Share Breakdown of Factory Revenue by Leading Vendors 25

Table 25: EMEA Server Systems Market (2010): Percentage
Share Breakdown of Factory Revenue by Leading Vendors 26
Communications Servers Market: A Review 26
Demand for Low Cost & Low Power Servers Accelerates 26
Table 26: World Market for x86 Servers (2010): Percentage
Market Share Breakdown of Leading Manufacturers 27

Table 27: World Market for Blade Servers (2011): Percentage
Share Breakdown of Sales by End-Use Segment 27

2. MERGERS AND ACQUISITIONS 28
Dell Inks Agreement to Take Over Force10 Networks 28
Pronto Systems to Take Over Pica8 Systems 28
AuthenTec Announces Merger with UPEK 28
Commtouch Acquires Authentium Antivirus Business 29
MegaPath, Speakeasy and Covad Announce Merger 29
Intel to Takeover McAfee 30
Tejas Networks Closes Ethos Acquisition 31
PLX Technology Agrees to Takeover Teranetics 31
HP Acquires Fortify Software 32
IBM Plans Netezza Acquisition 32
Neutral Tandem to Takeover Tinet 33
Emtec Acquires SARK Infotech 34
HP Acquires 3Com Corporation 34
Ciena Acquires Nortel MEN Carrier Assets 35
IBM Takes Over Intelliden 35
Aonix Merges with Artisan to Form Atego 36
Cisco Systems to Acquire LineSider Technologies 36
IBM Signs Definitive Agreement with BLADE Network Technologies 37
Cavium Acquires MontaVista Software 37
Arkeia Software Takes Over Kadena Systems 38
Cisco Acquires Starent Networks 38
JDSU Acquires Network Tools Division of Finisar 39
Wallingford Software Closes InfoStream Acquisition 39
Oracle Acquires SUN 39
Check Point Acquires Nokia Security Appliance 40
Force 10 Merges Operations with Turin 41
Sun Microsystems Takes Over MySQL 41

3. STRATEGIC CORPORATE DEVELOPMENTS 42
Microsemi Enters into Patent Transfer and Licensing Agreement
with Cisco 42
Jordan University Inks Agreement with IBM 42
Fox Technologies Launch Global Channel Partner Program 42
NetApp to Support SFP+10-Gigabit Ethernet (10GbE) Server
Adapters of Intel Ethernet X520 Family 42
Nokia and Intel to Merge Software Platforms 43
Ceragon Networks Signs Global Supply Agreement with Hutchison 3 43
HCL Infosystems Bags BSNL Order 43

4. PRODUCT/SERVICE LAUNCHES 44
NetScout Introduces nGenius Integrated Agent 44
eApps Hosting Introduces IPsec-compliant VPN Service 44
G Data Software Introduces Product Generation Suite in India 44
Astaro Unveils Advanced Security Gateway Version 8.2 45
LogMeIn Introduces vpn.net to Simplify VPN Creation 45
InterSystems Launch CACHE Release 2010 45
XaaS Introduces ClearControl 46
IBM Introduces Enhanced CloudBurst Solutions 46
TRENDnet Launches 4-Port 5Gbps USB 3.0 Hub 46
Force10 Launches New 1/10 GbE ToR Access Switch S55 47
Trendnet Launches GreenNet Switches 47
NI Launches Ethernet-Based CompactDAQ 48
ATTO Introduces Latest 10GbE Network Adapters 48
TrendNet Launches 450Mbps Wireless N Gigabit Router 49
SGI Launches Cyclone Service for Cloud Computing 49
HP Unveils a Range of Networking, Software, Storage and Server
Products 50
3Tera Launches a Cloud Computing Platform 50
Mellanox Presents Ethernet Adapter Cards through IBM 50
Grid Net Unveils a Software Suite 51
Novell Rolls Out a New Service Pack 51
Gigamon Launches Trunking Technology Supporting Software 51
Citrix Unveils a NetScaler VPX Appliance 52
Xignite Presents a Pair of Equity Options Web Services 52
Juniper to Unveil New Networking Hardware Software 52
Emulex Launches Novel Storage Networking Solution 53
GarrettCom Launches New Ethernet Switch 53
StarNet Communications Releases Solaris x86 and IBM AIX
Installation Packages 53
Cisco Launches New ASA 5580 Series 53
VIA Technologies Launches VIA NAB 7500 54
Ciena Introduces New Ethernet Service Modules 54
EMC Rolls Out Clarion AX4 54

A REGIONAL MARKET PERSPECTIVE 55

1. THE UNITED STATES 55
Rise in IT Expenditure Augurs Well for Market 55
ICT Networking Equipment and Products Market - Outlook 55
Table 28: ICT Networking Equipment and Products (2011) -
Percentage Share Breakdown of Annual Sales Value for
Switchers & Routers, WAN/LAN Connecting Devices and Others 55
Enterprise Data Networking Market 55
Table 29: Enterprise Data Networking Market (2011):
Percentage Share Breakdown of Revenue by Segment 56
WLAN Industry Recovers After Recession Induced Slowdown 56
Core Switches and Routers 56
LAN Switches 57
Ethernet Port 57
10-Gigabit & 40-Gigabit Ethernet 57
Growth in 40/100 gigabit ethernet (gbe) gathers steam 57
Network/Server Operating System 58
Computer Network Multimedia Hardware, Software and Services 58
Table 30: US Sales of Computer Network Multimedia Hardware,
Software and Services: Percentage Market Share for 2011 for
Multimedia Hardware and Software, Distribution Services, and
Deployed Services 59
PC Market 59
Table 31: US Market for Personal Computers (2011) -
Percentage Share Breakdown of Annual Shipments by Category -
Desktop PCs and Portable PCs 59
Network Security Market 59
Virtual Private Network Technology 59
Table 32: US Small Business Expenditure on Virtual Private
Network Technology by Business Segment: Percentage Market
Share for 2011 for Hardware, Software, Network,
Telecommunications, and Others 60
Other Key Network Security Statistics 60
Table 33: US Network Security Market (2011): Percentage
Share Breakdown of Revenue by Segment 60

Table 34: US Network Security Market (2010): Percentage
Share Breakdown of Revenue by Leading Players 60
Spam 61
Table 35: Reasons why Spam is Considered Problematic in the US: 61
Intrusion Detection System 62
Limitations of IDS 62
Growth Strategy 62

2. EUROPE 63
Outlook 63
Table 36: European Recent Past, Current and Future Analysis
for Information Technology & Communications (ICT) Networking
Equipment and Products by Geographic Segments - France,
Germany, Italy, UK, Spain and Rest of Europe Markets
Independently Analyzed by Annual Sales Value (in US$
Billion) for Years 2010 through 2015 63

Table 37: European 5-Year Perspective for ICT Networking
Equipment and Products by Geographic Segment - Percentage
Breakdown of Annual Sales Value for France, Germany, Italy,
UK, Spain and Rest of Europe Markets for the Years 2011 &
2015 64
Wireless Local Area Network 64
Market Trends 64
IEEE 802.11b-A Major Aspect 64
Hardware Market in Europe - An Overview 65
Facts and Trends 65
European PC Market 66
Table 38: European Market for Personal Computers by
Geographic Region - France, Germany, Italy, UK, Spain,
Russia, and Rest of Europe Markets Independently Analyzed by
Annual Shipments in ‘000 Units for the Years 2010 through
2015 66

Table 39: European 5-Year Perspective for Personal Computers
by Geographic Region - Percentage Breakdown of Annual
Shipments for France, Germany, Italy, UK, Spain, Russia, and
Rest of Europe Markets for the Years 2011 & 2015 67

2a. FRANCE 68
Overview 68
PC Shipments 68
Table 40: French Market for Personal Computers (2011):
Percentage Share Breakdown of Volume Shipments by Product
Category 68

2b. SPAIN 69
Networking Market - An Overview 69
PC Market 69

2c. UNITED KINGDOM 69
Outlook 69
Snapshot of the Personal Computers Market 69

2d. GERMANY 70
Outlook 70
Personal Computers Market - A Review 70
Table 12: Personal Computers Market in Germany (2010):
Percentage Breakdown of Value Sales by Retail Channel -
Specialist Multiples, Independent Specialists, Hypermarkets,
Discount Stores, and Others 70

3. ASIA-PACIFIC 71
IT Industry 71
Networking Hardware Market 71
Optical Network Market 71
Corporate Initiatives 71
PCs Market 71
Personal Computers Market 72
Table 41: Asia-Pacific Market for Personal Computers by
Geographic Region - Japan, China, India and Rest of
Asia-Pacific Markets Independently Analyzed by Annual
Shipments in ‘000 Units for the Years 2010 through 2015 72

Table 42: Asia-Pacific 5-Year Perspective for Personal
Computers by Geographic Region - Percentage Breakdown of
Unit Shipments for Japan, China, India and Rest of
Asia-Pacific Markets for the Years 2011 & 2015 73

Table 43: Mobile PC Market in Asia-Pacific (Excluding
Japan) (2011): Percentage Share Breakdown of Volume
Shipments by Product Type 73
Network Security Market 73
Robust Growth Slated for Web Application Firewall Market 73
Outlook 74

3a. JAPAN 75
Network Security Products and Services Booming in Japan 75
Security Software 75
Transition from Mainframe to Open-System 75
Outlook 75

3b. CHINA 76
Security-Related Software Market 76
Storage Market 76
PC Market 76
Reforms in Distribution Channels 76

3c. HONG KONG 77
Internet Security Products and Services Market 77
Networked Storage Systems 77
Hardware for Networked Storage Systems 77

3d. INDIA 78
Networking Market - An Overview 78

3e. KOREA 79
South Korean Wireless Networking Solutions 79
Home Network Equipment Market 79

3f. TAIWAN 80
Information Infrastructure in Taiwan 80
Personal Computers Market - An Overview 80
High Shipment Volumes Do Not Necessarily Imply Higher Profits 80

4. MIDDLE EAST 81

4a. UAE 81
UAE Security Products Market 81

5. LATIN AMERICA 81

5a. BRAZIL 81
Personal Computers Market - An Overview 81
Linux Market Experiencing Considerable Growth 81

5b. VENEZUELA 82
Industry Overview 82
e-Business Solutions Enjoying Greater Acceptance 82

GLOBAL DIRECTORY

The last couple of decades have witnessed a broad sweep of technological developments in computer networking. Computer networking speeds are accelerating significantly beyond the standard 10-Gigabit Ethernet (GbE). From data transmission speeds of 100 megabits per second to 10 gigabits per second to now over 100 gigabits per second, networking speeds have been evolving in sync with growing business needs. The massive data explosion triggered by bandwidth heavy multimedia content, such as, video, voice, multimedia, has and will continue to throw the focus on data transfer rate capability of computer networks.

The continuously growing numbers of users sharing a network, use of advanced applications (i.e. internet-based applications, video communication), faster desktop PCs, and faster network servers, all of which contribute to traffic congestion, are creating a dire need for networks to support gigabit transmission speeds. This insatiable need for faster and faster transmission speeds is forecast to continue gathering momentum as businesses adopt bleeding edge networking technologies, such as, data warehousing, cloud computing, server virtualization, all of which have immense resource demands i.e. higher storage needs, and bandwidth-hogging applications.

Against this backdrop, the network and data communications equipment market is opening up fast due to rising need for connectivity, new applications based on Internet Protocol (IP) and concerns of business firms for security of business data. The market segments of wireless LAN (Local Area Network) equipment continue to expand, as it provides higher mobility and in turn, a greater flexibility within an organization. In order to make use of faster Ethernet technologies such as Gigabit Ethernet and Fast Ethernet, LAN hardware has begun to shift from hubs to switches, which provide faster inter-connections.

In the Router segment of the market, there is increased demand for the gigabit IP products arising out of the increased use of RAS (Remote Access Servers), VPN (Virtual Private Networks), switching and importance of security issues. However, competitive prices in lower-end product segment are expected to act as a hindrance. The increased need for Remote Access Connectivity, e-commerce, Intranets and Internet, is expected to generate additional demand for greater bandwidth and higher speed in the LAN market. In the communications segment, increasing demand for high-speed connection, greater bandwidth and uninterrupted connectivity increases the growth potential of this segment. Even though analogue modems still hold a major share in the developing countries, sales of ADSL routers and modems have improved substantially in recent years.

The depressed economic climate forced companies to reduce their budgetary outlays, and critically re-evaluate their network operations, and infrastructure during 2008 & 2009. This pruning down of investment outlays to hedge the financial weakness in the market as well as in the balance sheets eroded shipments of networking hardware and software products. Thanks to resurgence in economy and sustained growth in the corporate sector, network spending increased over the last few years and will continue to grow in the short to medium term period, which augurs well for networking equipment and products market.

About 52% of enterprises are planning to increase their network equipment spending in the short to medium term, which augurs well for future of this market. Realizing the benefits of having strong network connectivity, SMBs, which hitherto stayed away from making huge IT infrastructure investments too are gradually increasing their network spending. Healthcare, Financial services, and the government sector will be major target markets for network equipment vendors, as these segments will continue to remain major spenders. Network security, Wireless LAN, VoIP and WAN optimization will be some of the major investment areas in network market.

After witnessing a temporary deceleration in growth during 2009, the world market for Ethernet Switches is back on growth track, thanks to resurgence in deployments of data centers, including using 10-Gigabit Ethernet in modular, Top-of-Rack and blade switches. With data/traffic saddled networks are pouring in 10GbE is increasingly becoming insufficient, and advancements in Ethernet will continue to play an ever-bigger role in handling rising data traffic on the Internet. With the ink barely dry on the newest 40GbE and 100GbE technology standard, potential evolution of 400GbE and 1TerabitE, the next rate of Ethernet speed, is already creating a flutter.

Huge pent-up demand and the growing need among enterprises to upgrade existing networks in order to ease congestion have and will continue to drive demand for both wired and wireless Ethernet switching. Having realized that effective communications among employees and uninterrupted access to IT applications will play a major role in enhancing organization productivity and competitiveness, enterprises across the globe have been expanding their existing network coverage, including mobile access, there by driving demand for efficient network hardware. Europe continues to remain the largest regional market for ICT Networking Equipment and products; Asia-Pacific however is the fastest growing regional market. Switches and Routers represent the most prominent product segments in the global ICT Networking Equipment and Products market.

Global Industry Analysts ©

- Acer
- Arima
- Asustek
- Axent
- Cisco
- Cisco Systems
- Compal
- Computer Associates Int
- Dax Networks
- Dell
- Fujitsu Siemens
- Hewlett-Packard
- Huawei Technologies
- Internet Security Systems
- Intrusion.com
- Inventec
- Jooyontech
- Juniper Networks
- Lenovo
- LG Electronics
- Linux
- Medion
- NEC
- Network ICE
- NetworkAssociates
- McAffee
- Packard Bell
- Positivo Informatica
- Quanta
- Samsung
- Symantec
- Toshiba
- Trend Micro
- TriGem Computer
- Wistron