I.T. networks almost never fail, and technology managers will pay a premium to keep it that way. Over the next 12 months, businesses will invest more in voice over IP, increase network bandwidth, and add more wireless users, and they'll do those things with reliability and performance as priorities, sometimes forgoing the lowest price options. It's about expanding what networks can do while keeping quality high--and it's a formula that works in Cisco Systems' favor. So far.
A new survey by InformationWeek Research, Analyzing The Networking Vendors, paints a picture of IT networks becoming even more critical in the coming year. Most companies are experiencing traffic increases of more than 25% a year on their networks. Businesses are getting more comfortable that they have basics such as security in place, but as they add more services like voice to IP networks, reliability becomes ever more important. While our survey finds cost is the biggest challenge in implementing a network strategy, the top criteria for selecting a vendor are reliability and product quality, followed closely by product performance. Price ranks fourth out of 15 criteria.
That explains why Cisco, considered the highest-priced option, can still be the top-ranked networking company overall. Yet the ratings show a close race: On a 1 to 10 scale, Cisco rates 7.84, Hewlett-Packard 7.81, 3Com 7.42, and Nortel Networks 7.24. The study, conducted in November and based on responses of 623 business-technology professionals working at companies ranging in size from $6 million to more than a $1 billion in annual revenue, rates the vendors' strengths and weaknesses, with respondents ranking only their primary networking providers. Other vendors, such as Extreme Networks Inc. and Enterasys Networks Inc., didn't generate enough respondents to qualify.
More than half of respondents say they'll spend somewhat more or significantly more on networks next year, with voice over IP, wireless, and bandwidth as priorities cited by at least half of respondents. For three out of five companies, network traffic is growing 26% a year or more, so picking the right networking vendor is a high-stakes decision. "There's obviously the concern for stability in the network [and] the reliability of the company itself," says Vincent Paragone, an independent consultant who led Lockheed Martin Corp.'s selection of Cisco for NASA's core network. "You're not going to get a second opportunity to say 'oops'; you're going to have to do it right the first time."