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Cisco sees room to grow, despite enterprise dominance

Cisco enterprise exec touts collaboration, unified communications offerings

By , Network World
December 08, 2009 08:49 PM ET

Network World - With dominance in enterprise networking, Cisco still believes there's room to grow through innovation.

The company owns 70% of the market in enterprise switching and 82% in enterprise routing, according to Senior Vice President Tony Bates, citing market data from Dell'Oro Group. Yet Bates, who heads the Cisco enterprise, commercial and small business division, told attendees at

Cisco's annual analyst conference this week that the company can build on that through market transitions like video, virtualization and collaboration.

"There's an opportunity to drive enterprise strategies and business imperatives," he said. "To adopt new business models to capture global markets; to change the experience [by allowing the] network to enable collaboration and partnerships. Maximizing productivity is a key imperative."

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The foundation of Cisco's enterprise strategy is Borderless Networks, a concept introduced in October to deliver services and applications to anyone anywhere, regardless of device or network technology. Borderless Networks is intended to support applications, processing cycles and services that are increasingly distributed and virtualized, such as those in cloud computing and software-as-a-service environments.

It represents Cisco's next-generation enterprise architecture, Bates said, and with it Cisco intends to play in a $91 billion total addressable market .

"The opportunity is very large," Bates says.

Though Cisco sees room for further growth in what many view as a mature market, the company is not without its challenges, analysts note.

"Collaboration, virtualization and video are key transition markets for Cisco, utilizing its core competency in network infrastructure, and extending for new growth," states UBS analyst Nikos Theodosopoulos in a bulletin on the analyst conference. "Importantly, the competitive landscape is shifting with HP expanding into networking, Microsoft keenly
focused on [unified communications]/collaboration/software share, and IBM and Dell OEM's of Juniper and Brocade equipment ramping in (the second half of 2010) likely challenging Cisco."

"Cisco is integrating virtualization, collaboration and video and the network together as an architecture," says Ittai Kidron of Oppenheimer & Co. "We believe this approach allows Cisco to differentiate and enhances the strategic value of the network. Despite switching and routing share losses with HP a rising threat and IBM partnering with competitors, Cisco expects to regain share driven by product refreshes."

An example of a Borderless Network application is Cisco's Enterprise Collaboration Platform, a customizable interface that integrates communications and collaboration tools with business applications for enterprises seeking to improve productivity and integrate distributed teams. ECP is built on Cisco's Unified Communications, WebEx, and Show and Share products, and is integrated with Microsoft Exchange.

Currently targeted at intra-company collaboration, ECP's next opportunity will be as a real-time, inter-company collaboration tool.

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