What to expect from Cisco's competitors in 2017

Cisco is in a strong position for 2017, but the company’s competitors won’t simply allow it to take market share

What to expect from Cisco's competitors in 2017
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In my previous post, I previewed what we should expect to see from Cisco in 2017. While I think Cisco is in a strong position next year, I don’t expect Cisco’s competitors to sit around and let it take share. Below are the market segments where I think we’ll see the most activity and which vendors are likely to be the most disruptive.

Collaboration

Hard-charging Microsoft has turned its unified communications (UC) focus to the cloud with its Skype For Business Voice available as part of the Office 365 suite. One can argue who has better voice or video, but Microsoft’s real strength is in how easy it is to purchase and start using voice, including PSTN calling. Microsoft also announced its Team product, which directly competes with Cisco’s Spark product, so the collaboration battle will be drawn on many fronts. 

Mitel has interesting potential as a stronger competitor, depending on which companies they decide to acquire next. I suspect we might see Mitel snap up a video vendor, which certainly won’t put them in the same class as Cisco and Microsoft, but they’re trending in that direction. 

The UC as a service (UCaaS) vendors pose a threat to Cisco as more customers move their communications to the cloud. Some customers will use Cisco-powered solutions, but many will choose one of the many Broadsoft-based providers that will benefit from the investments the company has made in its BroadCloud and BroadWorks platforms. The company is ready to market directly to the enterprise in a bigger way in 2017.

The one with the most potential? Vonage, which will spend 2017 making itself more well known to business customers and will try to disrupt the UC industry with a combination of its traditional UC suite and Nexmo.

Data center 

No vendor personifies the term “co-opetition” like Dell. Executives have stood on stage and praised Cisco and discussed how important the company is as it wages war on archrival HP. 

Drilling down even more, the converged infrastructure group (formerly known as VCE) has been one of the biggest channels for Cisco Nexus and ACI. Now that the market demand is shifting from converged to hyperconverged, the VxRack and VxRail products will dominate and could limited Cisco’s opportunity with Cisco HyperFlex. Also, as the converged infrastructure group gets more integrated into Dell, expect to see Dell-flavored infrastructure. They won’t stop using Cisco, but customers will likely get a Dell option. 

Arista is the most formidable threat to Cisco’s data center networking business, as it has proven itself to be an innovative and nimble competitor and has become the de facto alternative to Cisco in this market. The company is growing up, and I expect to see Arista bring an architectural story to market in 2017 where the company is able to quantify its end-to-end value better. It has great products; now it needs to start punching above its weight class. 

The other main data center networking vendor is the IP division of Brocade, currently owned by Broadcom and likely to be spun out in 2017. The mostly likely places for the IP division of Brocade to land are Extreme Networks and private equity. Dell is also a possibility, but it has its hands full integrating EMC. 

Security

There is no shortage of competitors in the security industry. One of Cisco’s points of differentiation is the architectural story it can put together because it can provide security at so many points in the network. The only other vendor that can boast a set of secure products as broad as Cisco is Fortinet whose security fabric message is highly differentiated. I expect to see Fortinet quantify the value of the fabric and open it up to enable more third parties to integrate into it.

Also, I believe we are on the verge of seeing FireEye’s second act. The company launched as a best-in-class sandbox, but growth has slowed and the stock price has fallen. The company has spent the better part of the past year integrating its platform with Mandiant, and its iSight platform gives it one of the most sophisticated threat intelligence platforms available today. Expect FireEye to exploit this and re-emerge as a dominant security vendor.

VMware is the third security vendor worth mentioning. Adoption of NSX has been sluggish as a network virtualization tool, but the company has seen some traction by customers using it as a network segmentation product. Expect to see VMware be more aggressive in 2017 as a disruptive security vendor.

Wireless LAN

The market for Wi-Fi is changing, and as Cisco CEO Chuck Robbins pointed out, controller-less solutions are becoming the preferred deployment model. I fully expect Aruba, an HPE company, to shift more of its go-to market towards its cloud platform, Instant. Also, now that the integration with HPE is done and the Aruba team is running the network show, we should expect to see the wired network become a significant part of its go-to market, like it was with the recent IoT announcement from Discover. Aruba wireless will still be the centerpiece, but it can complement that with products from HPE.

Aerohive has been one of the early evangelizers of controller-less solutions, and the market has finally come to them. It’s probably been its dependency on K-12, which was fine when the E-Rate money was rolling in. To offset this, we should expect to see Aerohive broaden its vertical focus into higher education, retail, hospitality and healthcare.

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