In our annual survey, readers indicate that the network industry itself is gaining in power, if not individual vendors.
Although the power of most individual network vendors is on the decline, the network industry as a whole is more powerful than ever. So indicate the 250 readers who participated in our annual Powerometer survey of vendor power. While respondents generally downgraded the Power Ratings of most of the 20 companies in our survey, more than 50% of the respondents said they felt the industry is now more powerful overall than it was prior to the pre-bubble Internet heyday. (See “Industry power rises.”)
Cisco, Microsoft, Intel and IBM top the Power Rating chart, as they did last year. But each took a hit on their Power Rating. Cisco’s Power Rating dropped by 1.6%, for instance, while IBM’s dropped by 6.9%.
Still, readers remain true to their belief in Cisco and its power. They named Cisco the network gear vendor most likely to increase power in 2005. Respondents were encouraged by Cisco’s standards efforts and applauded the router giant for reliably high-quality products and for its movement into the low end and home networking markets. Microsoft earned distinction as the software vendor poised to increase power in 2005. Respondents credited Microsoft for its control of the desktop, stable senior management and ability to sell to CXOs. But the power gap between these two leaders is growing. Last year, Microsoft’s Power Rating was a mere three-tenths of a point lower than Cisco’s; this year, Cisco was 2.9 points ahead.
2004 Power Rating Using a scale of 1 to 100, with 100 representing the highest level, the 250 readers who participated in our annual Powerometer survey named Cisco as the most powerful network vendor. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Elsewhere in the ranking, HP kicked Oracle out of its way to land in the Top 5, and Sun, SBC and MCI climbed in power by two ranks or more. Sun’s sheer chutzpah in the face of adversity continues to serve it well. Some even perceive the company on the rebound as its quarterly losses shrink. SBC boosted its power thanks in part to its landmark deal with Ford Motor for an outsourced VoIP network. As for MCI, it had nowhere to go but up after emerging from bankruptcy in April. MCI grabbed power at the expense of Novell, the latter resuming last place after a year’s respite, when MCI held it in 2003. Leucadia National called attention to MCI’s value when it moved to acquire about half the carrier’s stock in July.
Power gains Six companies increased power enough to move up in the rankings.
| Power losses Seven companies suffered a loss of power enough to move down in the rankings.
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| Industry power rises Thinking about the power of the network industry prior to the heydays of the Internet bubble, do you think the network industry today has more, less or the same power? | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dell, AT&T and EMC did not fare so well, each dropping two or more ranks. Dell’s power decline reflects uncertainty over the company’s new CEO, Kevin Rollins, who was promoted in April. AT&T is a whole other story. Ongoing poor financials underscore its inability to convince customers to pay for premium services, while rumors continue to circulate that the company is looking for a buyer. Plus, in October AT&T announced that it would trim 20% of workers.
EMC’s power reduction results from uncertainty over how the vendor will fare in its information lifestyle management strategy. The storage vendor wants to be seen as a new data center player, but that’s a world where standards rule and network executives are not sure that EMC can shed its proprietary mindset.
New to the Powerometer survey are two security vendors, rivals Symantec and McAfee. Symantec holds more power in the security arena than McAfee in the view of respondents, who ranked it at No. 15 to McAfee’s No. 19.
How we did it With the help of market research firm Research Concepts, we asked 250 readers to rate the power of 20 network vendors and their CEOs. We used a scale of 1 to 100, with 1 representing the low mark and 100 the high. We obtained the Power Rating by calculating the mean. We then used the Power Rating to rank the companies and individuals from highest to lowest rating. This allows us to examine two key measures of power: objective and relative. We determine objective power by comparing the current Power Rating with the previous one. To measure relative power, we examine how the Power Rating has affected rank. A Power Rating can wane while rank improves. For instance, in 2004, the Power Rating for HP CEO Carly Fiorina declined by 3.6% from 53.5 in 2003 to 50.2 in 2004. However, her position on the list increased by two ranks, from No. 7 in 2003 to No. 5 in 2004. |
