Managed Switch Usage Comparison A Benchmark Study of Major Switching Brands in the Midmarket

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1 Benchmark Study Managed Switch Usage Comparison A Benchmark Study of Major Switching Brands in the Midmarket Debra Chin Senior Vice President Palmer Research December 2010

2 Executive Summary The Ethernet switching market is dominated by Cisco. However, midmarket companies are turning away from traditional big IT vendors and adopting reliable, affordable and simple solutions from alternative vendors. This paper summarizes the Palmer Research survey of midmarket customers and sheds light on this compelling new trend towards smarter IT. Cisco is losing share. According to the Gartner Magic Quadrant for Enterprise LAN published in June, 2010, Cisco lost approximately 2.5% of market share in revenue and port shipments in 2009 and at the end of Q Cisco's port share dropped to 49.5% of total enterprise Ethernet ports shipped. NETGEAR is the #2 midmarket brand, Although the 2010 Palmer Research Study also confirmed that Cisco is the dominant Ethernet switch vendor with a presence in 50% of midmarket networks, NETGEAR is the second most popular managed switch vendor in this market segment. NETGEAR is easier to use. In addition, the 2010 Palmer Study found that NETGEAR users had fewer problems with network configurations compared to Cisco users. NETGEAR products are simple and easy to use; require fewer IT resources, and lower installation, training, and maintenance time. Moreover, a significantly greater percentage of NETGEAR users found it easy to manage QoS deployment and other network settings. Introduction Despite recent economic conditions, network demands continue to accelerate due to the growing number and types of devices, usage of bandwidth intensive applications, and initiatives such as VoIP, virtualization, security, and mobility. IT managers in the midmarket are more challenged than ever to find ways to keep up with the increasing need for security and control over their organizations networks with the same or fewer resources. According to Ray Boggs, vice president of Small/Medium Business Research at IDC, Mid-sized firms are in an awkward position when it comes to the use of advanced technology. They have large company needs without large company staff and budgets, yet they can no longer get by on the basic resources used by small businesses. Ethernet switches are at the core of network and IT requirements and organizations must invest in upgrading their infrastructure to ensure high performance. Infonetics Research reported that the midmarket will account for $3.2 billion in global managed Ethernet sales in 2010, reflecting an increase of 30% over 2009 levels. Key Findings Although Cisco is clearly the market leader, NETGEAR is the second most popular brand. Across all countries, web-based GUIs are the most likely tool of choice to manage networks. Roughly 25% of survey respondents indicated that they upgrade their networks every year. Nearly 40% are planning to do server room switch upgrades in the next year. 35% are planning to do network distribution switch upgrades in the next year. Nearly all (91%) have done network reconfigurations since their last major upgrade. Approximately half of network reconfigurations were done recently, the other half were done 2+ years ago. Nearly 2/3 indicated that their last network reconfiguration ran smoothly or had no problems. Security was mentioned by over half surveyed as the most difficult network configuration. Training levels vary substantially by country, with France having the highest percentage of formal training. QoS deployment and other settings were selected as the most difficult to manage. Most would be willing to consider a new vendor to obtain important new features and capabilities. Compatibility is the key concern IT/network managers have about purchasing from a new vendor.. 2

3 Brands by Country The brand presence in the midmarket is different from the overall managed switch market where Cisco and HP are the clear leaders. Although Cisco is still the brand leader in managed switches across the four countries that participated in the survey, NETGEAR was the second most popular switch found in midmarket networks. Note that since HP acquired 3com in April 2010, the combined share of the two brands is comparable to NETGEAR across the four countries. Figure 1. Percentage of Brands in Network Tools Used Across all countries, web-based GUIs are the most likely tool of choice to manage networks followed by switch vendor management software. Figure 2. Tools Most Likely to Use for Network Management 3

4 Deployment Habits Roughly 25% of midmarket IT managers surveyed do a major upgrade of their networks every year. The US is lagging other countries, with nearly 30% indicating that they have not upgraded their networks for 3 or more years. Server room and network distribution are the most likely candidates for upgrades over the next year. Table 1. Time since Last Major Upgrade US UK Germany France Total No Major Upgrade Planned 7% 6% 13% 11% 9% 3+ Years Ago 28% 10% 17% 15% 20% 2 Years Ago 27% 31% 19% 28% 26% 1 Year Ago 15% 24% 27% 19% 21% This Year 23% 20% 24% 27% 23% Figure 3. Upgrades Likely to Employ Next Year 4

5 Network Configuration Nearly all (91%) survey respondents have done network configurations since their last major upgrade. Nearly 2/3 of all survey respondents indicated that their last network configuration ran smoothly, although 30% said the process was too time consuming and 36% of respondents reported having a very difficult time or a lot of problems. Security was mentioned by over half of IT/networking managers surveyed as the most difficult network configuration. Table 2. Experience with Last Major Network Configuration Time Since Last Configuration US UK Germany France Total No Modification Since Last Upgrade 11% 10% 9% 7% 9% 3+ Years Ago 13% 15% 12% 15% 14% 2 Years Ago 27% 25% 25% 25% 25% 1 Year Ago 24% 21% 20% 23% 22% This Year 26% 29% 34% 31% 30% Ease of Last Configuration US UK Germany France Total Everything ran smoothly 42% 35% 29% 31% 34% No problems, but too time consuming 25% 33% 30% 34% 30% Net: Smoothly or No Problem 67% 68% 59% 65% 64% Some very difficult 28% 27% 39% 34% 32% Had lots of problems 5% 4% 2% 1% 3% Most Difficult Configuration US UK Germany France Total Security 58% 45% 64% 52% 55% IP/Routing 32% 42% 40% 38% 38% VLANs 29% 27% 31% 34% 31% QoS 24% 28% 27% 25% 26% Other 3% 2% 2% 2% 2% 5

6 Staff Training Levels Training levels reported by survey respondents varied substantially by country, with France having the highest percentage of staff with formal training and Germany having the highest percentage with advanced training. Figure 4. Training Level of Networking Staff Managing Network Components According to survey respondents, IP configuration/routing and network monitoring are the easiest parts of the network for them to manage. Figure 5. Percentage Indicating Various Network Components are Easy to Manage 6

7 Interest in New Features Most IT/networking managers surveyed are on the fence when it comes to willingness to purchase from a new vendor in the immediate future, although US managers were more willing to switch vendors than their European counterparts to get new features/benefits they believe will help them manage their networks. Compatibility is the key concern IT/network managers have with purchasing from a new vendor. Figure 6. Percentage Willing to Purchase from New Vendor for Important Features/Benefits Figure 7. Percentage with New Vendor Concerns 7

8 Conclusions Given limited budgets and headcount resources, IT managers in mid-sized companies are more challenged than ever before to deploy and manage networks that are highly reliable, affordable and simple. Third party managed switch offerings for the midmarket are typically diluted versions of the feature rich solutions offered to the enterprise market. From the survey results, IT managers in mid-sized companies are now looking for networking products that deliver high performance with less complexity at more affordable price points. Highlights from the 2010 Palmer Research survey on managed switches confirm: Web-based GUIs are the most likely management tool of choice. Survey results indicate that midmarket IT managers prefer a simple, user-friendly Web-based management interface over other methods of management. Although nearly 2/3 of all survey respondents indicated that their last network configuration ran smoothly or had no problems, switches from traditional enterprise vendors are viewed as most difficult to manage. QoS deployment and other settings were selected as the most difficult parts of the network to manage. Mid-size business IT managers are looking for feature rich, enterprise-class products with price points that are far below those of solutions from traditional enterprise vendors. Compatibility is the primary concern IT/network managers have about purchasing from a new vendor. Products should be industry standards based without proprietary protocols.. Mid-sized businesses refuse to sacrifice reliability, cannot afford enterprise-level prices and require simplicity. About NETGEAR Managed Switches NETGEAR, a leading provider of managed switches for organizations of all sizes, offers business networking solutions with enterprise-class performance that are reliable, affordable and easy to use. Reliable NETGEAR managed switches are designed with reliability in mind and built to last. Each unit is made only with high-grade components and undergoes rigorous testing before it is shipped. All NETGEAR ProSafe switches are backed by an industry leading lifetime warranty. Affordable NETGEAR managed switches support a wide range of applications such as multicast, virtualization, top-or-rack aggregation, and advanced security at more economical price points. For networks demanding 10 Gigabit connectivity, any business, regardless of size or application, can find the right solution with a wide range of switches with built-in 10 Gigabit ports, at no additional cost. Simple NETGEAR managed switches can be managed through an intuitive and fully functional Web interface, industry standard CLI, or SNMP. NETGEAR users consistently rated their network configuration experience better than Cisco users. NETGEAR network infrastructure solutions range from intelligent edge units, to versatile 10 Gigabit top-of-rack and aggregation switches, to highperforming core modular chassis switches. For more information or to contact a NETGEAR reseller, please visit Methodology IT/Networking purchase decision makers in the midmarket (300 to 800 employees) across four countries (US, UK, Germany, and France) were invited to participate in an online survey about managed switches. More specifically, they were asked about: Deployment habits and issues with upgrades and configuration modifications Tools currently used to manage networks Importance of new network management features Purchase interest and pricing for new network management features Concerns with switching to a new vendor The study was commissioned by NETGEAR and conducted by Palmer Research in August and September 2010, and a total of 600 surveys (150/country) were completed resulting in a margin of error of +/- 4.1%. About Palmer Research Palmer Research designs and executes custom market research studies focused on helping IT decision makers and high tech companies meet their business objectives. Founded in 2001, Palmer Research delivers the data and intelligence our clients need to better understand market dynamics, customers, prospects, and partners. The company is located in Los Altos, CA. For more information, call (650) or go to NETGEAR, Inc. NETGEAR, the NETGEAR logo, and ReadyNAS are trademarks or registered trademarks of NETGEAR, Inc. in the United States and/or other countries. Other brand and product names are trademarks or registered trademarks of their respective holders. Information is subject to change without notice. All rights reserved.

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