Competition is good for the consumer and in enterprise networking, it almost always leads to better deals for our clients. However, there continues to be a love affair with Cisco gear, both on the edge and the core that makes the job of introducing a legitimate competitive threat difficult. Cisco has great gear in most cases, particularly in the core, but at what price? Cisco is consistently more expensive apples to apples, with legitimate lower cost options from Brocade (including legacy Foundry), Juniper and Huawei, as the most notable examples, with comparable functionality that meets most enterprises’ need. Sure, there might be some features sets from Cisco that might set it apart, particularly if you are running Cisco IP Telephony or UC, but in areas like the edge or aggregate layer there are much less expensive options.
Hauwei is a great example. They just overtook Cisco as the #1 networking provider for telecom companies, and is now going after Cisco in the USA and aggressively competing in other industries as well. They will emerge as a formidable competitor to Cisco no doubt and the enterprise can use this as an advantage when deliberating on pricing and services.
Juniper has been nipping at Cisco’s heels for years, but still is only gaining modest acceptance in the enterprise and typically only in the edge or firewalls (due in part to their NetScreen acquisition). Brocade and their Foundry acquisition should be reaping all kinds of market share by now, but also is seeing modest adoption in the enterprise. Again, the love affair with Cisco persists with a well-trained Cisco sales force that create fear, uncertainty and doubt about the competition, some concerns with job security and familiarity with network managers and a general (and irrational) reluctance to change what is working.
It is a high price to pay indeed, not only in the hardware acquisition where the Cisco premium can run 25% to 40%, but notably in the on-going hardware support and maintenance costs where SMARTnet can be priced wildly out of proportion to the value received and in contrast to the much more reasonable cost of their closest competitors. Non-OEM (aka 3rd party) support providers can reduce this maintenance and support cost, but this is not always the best solution, particularly for newer, more complex platforms that require more than the average number of software updates.
Look at Cisco and their Unified Computing and Servers (UCS) offerings. In this case, the tables are turned on them and they are aggressively pricing their products to build market share and take away from the entrenched business of HP, Dell and IBM. HP is in turn going after Cisco in networking, which is good for our enterprise clients. And of course, Brocade, Juniper and Hauwei are attempting to do the exact same thing by aggressively discounting their products, bringing the functional capabilities up to par with the Cisco networking platforms, improving the CLI, and bolstering their technical assistance and hardware maintenance functions.
Brocade is making a full court press to take a big chunk of Cisco business with an explicit goal to grow at twice the market rate with promises of big savings to enterprise customers, specifically targeting healthcare, public sector markets and large multi-nationals, where potential savings are the largest in our view. In fact, given the commodity nature of edge networking, it would be quite straightforward to put a solid competing product to Cisco in the edge and enjoy the benefits of a dual supplier strategy and the cost savings through competition this would create. Let a provider, like Brocade or Juniper, prove their mettle on the edge or aggregate layer, and when it comes time to refresh the core, pit them all together in an open solicitation and drive down the costs in the process, serving notice to Cisco the days of a hegemony in the enterprise are over.
NET(net)’s Website/Blogs/Articles and other content is subject to NET(net)’s legal terms offered for general information purposes only, and while NET(net) may offer views and opinions regarding the subject matter, such views and opinions are not intended to malign or disparage any other company or other individual or group.
Celebrating 10 years, NET(net) is the world’s leading IT Investment Optimization firm, helping clients find, get and keep more economic and strategic value. With over 1500 clients around the world in nearly all industries and geographies, and with the experience of over 15,000 field engagements with over 250 technology suppliers in XaaS, Cloud, Hardware, Software, Services, Healthcare, Outsourcing, Infrastructure, Telecommunications, and other areas of IT spend, resulting in incremental client captured value of nearly $100 billion since 2002, NET(net) has the expertise you need, the experience you want, and the performance you demand. Contact us today at email@example.com, visit us online at www.netnetweb.com, or call us at +1-866-2-NET-net to see if we can help you capture more value in your IT investments, agreements, and relationships.