When it comes to network vendors and data equipment vendors, can anyone really compete with Cisco? The perception may be no. But the reality can be very different. Or at least a little muddy.
Yes, Cisco has a large slice of the networking industry pie. However, HP, Nortel, Alcatel, Huwaei lately have been aggressively looking for this space to get more market share. But for anyone to truly challenge Cisco’s dominance … they have a lot of work ahead of them.
In my opinion, Cisco only keeps smaller players like Juniper and Foundry in the data networking market to avoid monopoly situations. With the largest footprint, deep market penetration, and a wide range of high-quality products, it has built a significant level of durability into its competitive business strategy.
As far as Alcatel (or Alcatel-Lucent) and Nortel are concerned, they can be classified as telecommunications players rather than data communications players, and HP is too diversified to compare it to Cisco as a pure data network player.
Cisco’s business can only be threatened by changes in consumer preferences / demand (external) or technological obsolescence of its current products (internal), both of which are difficult to imagine due to the capital resources it spends on research from markets and niche acquisitions.
Juniper is positioning itself on many levels to compete with Cisco. With its newly launched switching platform and J-series routers and the acquisition of Netscreen and Redline, etc. Juniper has already competed fiercely for core network space and has done marginally well with the ISP market. However, they have not solved the company very well. With new product launches aimed directly at bringing Cisco down, we may see a change in the landscape. Large corporations like to have more than one supplier to play off each other. Healthy competition forces innovation and drives prices down.
If Juniper can ever come up with an effective marketing plan and put aside the stupid cartoons that try to be funny, they may have a legitimate shot. They did something very brilliant a couple of years ago and offered free classes to current and potential customers to get engineers more familiar and comfortable with JunOS. Remember that OS / 2 did not die because it lacked quality or desirable features.
Nortel has established the necessary feature, functionality and space within the voice industry. As the line between traditional voice and data blurs, Nortel will be a growing threat.
However, the only component of the question that was left out was “why does Cisco have this position?” The answer to this question can be found in the answer to how many IT graduates have studied Cisco courses, are Cisco accredited, or used Cisco equipment during their education? Interestingly, the answer is the majority. There are very few Juniper-accredited graduates, and even fewer Nortel graduates, let alone Huawei. But this does not mean that their respective products are better, worse, or equal to Cisco’s. It simply means that Cisco has wisely used the brand to differentiate itself from its competitors. People, by their nature, gravitate towards what they know or what they are comfortable with. This does not mean that it is right or wrong, it is something comforting. The same question can be asked about McDonalds, Coke, Pepsi, and Nike.
The difference is not so much the technical aspect of the equipment suppliers, but rather the marketing approach of the companies.
Cisco, although a manufacturer, has marketed itself as a ‘systems provider’, which is only achieved through joint strategies with larger systems integrators. This has led the customer to believe that Cisco is bigger and more versatile than it really is, a very smart approach. Cisco has always run a platform to enable its customers to adopt an IP strategy in the data and voice arena without a massive upfront cost. This crosses the limit of voice and data (a normal strict division).
Juniper markets the voice elements, that is, the old PABX people in voice, as the telecommunications market.
Procurve sells to a strict SMB market and is a cheap reseller product.
The Chinese have developed a competitor to Cisco based in Basingstoke, UK. However, it lacks a solid marketing plan with clients.
That’s why we all talk about voice and data convergence. It is what most companies try to sell. However, there are still strong divisions in end user / customer job roles … with data rooms as one area … and voice frames in another.
The bottom line is simple … each manufacturer, each integrator from different areas with different skill sets must work together to solve / serve a customer’s needs. The customer needs an aspirin for his headache … and not the ingredients to make his own. Cisco will dominate its market due to a strong strategic partnership program with direct customer relationships. If someone wants to challenge this, they still have a lot of work to do … this is not really a matter of technical skill.
But … I honestly think Cisco is on the verge of a crash just like IBM did in the early 90’s. They’ve forgotten that people think of them primarily as a networking company. They are no longer the first to come up with new ideas. They seem to think that a “me to” attitude will suffice.
For example, a friend’s company just conducted an evaluation between 3com, Cisco, and HP. All three companies make products that can easily provide you with a fantastic network. In the end, Cisco has offered deep discounts, which make it competitive, but is not willing to extend the discounts for any length of time.
They’re already a Cisco store, and they’re really only comparing them to other companies for various reasons. The biggest one is this … in recent years they have been installing HP and 3com switches to expand their network. Because generally both products cost about 1/3 of the cost. Every time they decide to buy a new switch, they do their research and just can’t justify the extra expense as the other two products will meet their requirements.
HP is a solid, well thought-out line of products with a lifetime warranty. They know exactly how to position their product and where to price it. Your salespeople run in circles around the competition. They clearly intend to clean up the Cisco watch in the small and medium market, and they have the resources to do so. HP’s solution allows you to use the chassis in wiring closets … if you want to … without paying any real premium. Its switch operating system appears to be very similar to Cisco’s, but there are fundamental differences that some will find refreshing and others frustrating. Cisco better watch out for these guys.
3com has an impressive product line in the 4500, 5500, 5500G and 8800 products. The performance is amazing, for over 2 years on their 5500G product line they have been able to be logically and physically stacked with 192 Gbps. backplane speed. If you want to convert a non-powered switch to a powered one … all you have to do is change the power supply. Which costs only as much as the cost difference between powered and unpowered switches. There has been a 10G slot in the rear since it was designed. Now they offer an OSM module that can go in the 10G slot. The OSM module is a Linux card with access to the backplane.
The switch OS is somewhat IOSish … but it has been improved in the way you can query it (“show this” is awesome) and the way debugging works.
In the last 3 years, 3com has vastly improved its support staff. In fact, they call you on the phone (which the folks at Cisco seem to not want to do anymore) and seem to offer a high level of expertise.
3com offers 2 IP PBX lines, NBX and VCX. Comparing these 2 today is similar to comparing the Mitel SX100 in the ’80s and’ 90s to the ROLM. The NBX is a rock solid, medium to small sized PBX that performs very well and offers many features. However, it falls short if you are looking for an enterprise-grade solution. This is where the VCX comes in. You can scale pretty much anything you want, it offers great features, and although they had problems at first, it is now a very stable product.
This product line is amazing and can beat Cisco’s price even at incredibly high discounts. If 3com is ever forgiven for leaving the Core market when it did, and if they ever learn how to market their products effectively, they could easily capture a significant portion of Cisco’s market share.
My friend hasn’t made up his mind yet, but it seems a little unlikely that he’ll continue to drink Cisco Kool Aide any longer. Cisco is an amazing company, and he and I think they will discover their vulnerabilities and react well, but not before they feel a lot of pain. My friend has worked with your products for 18 years and is sorry to see what has happened to them due to their incredible growth in power. Hopefully Cisco can regain its leadership aptitude and attitude.