Network equipment sales will be strong: IDC Canada

Sales of network equipment in this country will grow at a faster pace in the next five year than the rest of the information and communications market, says IDC Canada, boosted in part by the high Canadian dollar.

According to analyst Alex Pares, one reason sales are doing well this year is the dollar, which has been in and around parity with the U.S. buck for the past 12 months. “With the stronger Canadian dollar, buyers now have more purchase power,” he said Tuesday. “They are getting the same equipment for less money.”

In its latest five-year forecast, the research firm said that by the end of 2012, annual spending by carriers and enterprises will hit $2.86 billion, representing a compound annul growth rate of 6.8 per cent.

This year network equipment spending will grow 8 per cent over 2007. By comparison, spending on all IT hardware and software this year will grow 7.1 per cent over 2007.

Just under 60 per cent of spending in this category is done by enterprises of all sizes, while about 40 per cent is done by carriers and service providers.

“The intention to adopt networking equipment is very healthy across businesses of all sizes in Canada,” says the report.

The fastest growing segment over the next five years will be wireless LAN gear, IDC Canada believes, driven by the expected soaring demand for mobile devices and services as well as unified communications.

The research company does not see sales of WiFi gear leaping when the 802.11n standard is finalized, which is expected in 2009, although a number of companies have draft “n” products on the market now. For most companies the slower “g” standard will be enough, Pares said.

The study also looked at the priorities of corporate buyers, which it found roughly varied by size. Companies with more than 500 employees said switching and WLAN gear were their top priorities, with security their lowest concern. Organizations with between 100 and 500 workers ranked switches and IP telephony routers as their top spending priorities, with routing and security lowest. Finally, firms with less than 100 employees said spending on routers was their top priority, and IP telephony their least concern.

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