How vulnerable is Cisco?

Cisco has been the dominant vendor of enterprise switches and routers for the last 20 years and that is not likely to change anytime soon. There are, however, some transitions taking place in the overall IT marketplace that indicate that Cisco could be vulnerable to losing at least some market share. We will use the next two newsletters to discuss our thoughts on how vulnerable Cisco is in the enterprise networking market.

Cisco defectors

In late May, Jim participated in a virtual IT conference. Jim gave a presentation on why networks must change and his presentation included a polling question for the audience. That polling question asked the audience to indicate the relationship that they have with their LAN switching vendor. There were 97 responses to the question. It was not surprising that the vast majority of the respondents indicated that Cisco was their primary LAN switching vendor. What was surprising was that 40% of the respondents who said that Cisco was their primary LAN switching vendor indicated that they would likely add switches from other vendors in the next year.

We need to caution our readers that it is not reasonable to look at this one data point and declare that 40% of organizations that today are primarily Cisco shops will indeed add switches from other vendors in the next year. It is also not reasonable to speculate that if these organizations do add non-Cisco equipment, how much non-Cisco equipment they will add. However, this data point does suggest that there is more receptivity on the part of Cisco shops to implement non-Cisco gear than is usual.

One of the biggest transitions in the IT marketplace is the entrance that Cisco made last year into the server market. In many ways this was a move that Cisco had to make. They had to make it because in order to grow, Cisco has to enter new large IT markets in which it has at least some credibility. Not surprisingly, Cisco's entrance into the server market really aggravated some of Cisco's long-term partners such as HP.

In the next newsletter we will discuss how we see HP positioned in the enterprise networking market. In particular, we will discuss whether or not we think that HP will take significant market share away from Cisco. In the mean time, we would like to hear from you. If you are currently a Cisco shop, are you likely to make a serious deployment of equipment from another vendor? If so, why?

Copyright © 2010 IDG Communications, Inc.

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