Finding Cisco's competition

Insightful analysis by consultants Steve Taylor and Jim Metzler, plus links to the latest WAN news headlines

The last couple of newsletters have examined some key enterprise IT markets that are dominated by Cisco. We don't think that Cisco is bad. We do, however, think that the lack of competition is bad. We will use this newsletter to continue to examine key enterprise IT markets looking for viable competitors to challenge Cisco.

One hot market is WAN optimization, and the biggest piece of this market is branch office optimization solutions that are often referred to as WAN Optimization Controllers (WOC). This is a very key market for Cisco because it is the perfect example of putting more and more intelligence in the network. Cisco's entire enterprise marketing strategy is predicated on the network becoming more and more intelligent and hence not a commodity.

Note that the phrase "in the network" does not necessarily mean that the functionality is integrated into a router. As previous newsletters have detailed, there is a lot of healthy discussion going on relative to what functionality belongs in a router and what functionality does not.

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The last couple of newsletters have examined some key enterprise IT markets that are dominated by Cisco. We don't think that Cisco is bad. We do, however, think that the lack of competition is bad. We will use this newsletter to continue to examine key enterprise IT markets looking for viable competitors to challenge Cisco.

One hot market is WAN optimization, and the biggest piece of this market is branch office optimization solutions that are often referred to as WAN Optimization Controllers (WOC). This is a very key market for Cisco because it is the perfect example of putting more and more intelligence in the network. Cisco's entire enterprise marketing strategy is predicated on the network becoming more and more intelligent and hence not a commodity.

Note that the phrase "in the network" does not necessarily mean that the functionality is integrated into a router. As previous newsletters have detailed, there is a lot of healthy discussion going on relative to what functionality belongs in a router and what functionality does not.

The interesting thing about the WOC market is that Cisco is not the 800-pound gorilla of the market. If there is an 800-pound gorilla, it is Riverbed. Cisco, on the other hand, is being Cisco and doing what it so often does. It was certainly not a pioneer in the WOC market, but is now looking at it seriously and making substantial progress in terms of market share. One thing that impresses us about Cisco and Riverbed is that they both have very intelligent management so we doubt if they will make any horrendous blunders. As a result, this competition will be fun and important to watch. It also will be interesting to watch and see if Riverbed can reinvent itself into more than just a WOC company.

So is that it? Does Cisco have just one or two competitors in isolated markets? Definitely not. Cisco's annual revenue is approaching $40 billion a year. In order to grow that revenue, Cisco is looking into markets that are adjacent to its existing networking market. In particular, it is looking at areas such as collaboration and storage. As Cisco enters these markets it is increasingly bumping up against its friends. Companies like Microsoft, EMC and IBM. These companies are not likely to make the same mistakes as did the switch and router vendors. 

We believe that as it moves forward Cisco will face its stiffest competition to date. It will be interesting to see if Cisco's management is agile enough to win more battles than it loses in these new arenas.

Editor's note: Starting Nov. 19 week, you will notice a number of enhancements to Network World newsletters that will provide you with more resources and more news links relevant to the newsletter's subject. Beginning Monday, Nov. 12, the Wide Area Networking Newsletter, written by Steve Taylor and Jim Metzler, will be merged with the WAN News Alert and will be named the Wide Area Networking Alert. You'll get Steve and Jim's analysis of the convergence and WAN market, which you will be able to read in full at NetworkWorld.com, plus links to the day's WAN news and other relevant resources. This Alert will be mailed on Tuesdays and Thursdays. We hope you will enjoy the enhancements and we thank you for reading Network World newsletters.

Read more about lans & wans in Network World's LANs & WANs section.

Steve Taylor is president of Distributed Networking Associates and publisher/editor-in-chief of Webtorials. Jim Metzler is vice president of Ashton, Metzler & Associates.