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Survey: Cisco's Network Domination At Risk

Cisco Systems' dominance of the networking technology space remains strong but it will have to work harder to keep it that way, according to a recently released survey of IT professionals on data center networking. Increasingly, the people who buy networking equipment are considering other vendors, such as Dell, HP or IBM, as an alternative to Cisco. In addition, while Cisco is known for its networking innovations, customers prize technology that adheres to common industry standards over products offering unique features.

The survey of 510 IT professionals across a variety of industries was published this week by Information Week Analytics. In this first of a three-part series, we look at the openness of customers to adding or switching networking vendors. In part two, we'll focus on the issue of standards versus unique features, and in part three, look at what criteria customers use to compare vendors.

Notably, 71 percent of survey respondents said they have recently completed a network rearchitecting project, are planning one in the next two years, or are in the midst of one, making the latter two groups ripe for a marketing pitch from rival vendors. The same percentage of respondents that are doing or planning a project say they are considering replacing their primary vendor, their secondary vendor or adding another vendor.

When asked in the latest survey if the respondents are satisfied with their current vendor, the response bodes well for Cisco. Only 1 percent said they were "Unsatisfied" with their current vendor and 14 percent were "Somewhat Satisfied." The rest were either "Satisfied" (61 percent) or "Very Satisfied" (22 percent).

But other results indicate where rival vendors may hold sway over longtime Cisco customers. 49 percent of respondents said they were not considering switching vendors at all, a decline from 60 percent in the October survey.

Also, when asked what reasons they would have for replacing an incumbent vendor, 57 percent cited operational cost savings and 55 percent cited capital cost savings as their top considerations. Elsewhere in the survey, when respondents were asked how they would rank various vendors on their acquisition and operating costs, Cisco ranked the lowest, meaning it was considered the priciest. On a scale of 1 to 5, from "Poor" to "Excellent," Cisco earned only a 3.2 rating on acquisition costs; Dell lead the pack with a 4.0 rating, meaning it was considered the most affordable. On operating costs, Cisco earned only a 3.5 ranking, lowest of all seven vendors, although the vendors were ranked closely together in a narrow range of 3.5 to 3.9.

Besides Cisco, HP, Dell and IBM, the other vendors ranked in the survey were Juniper Networks, Brocade and Avaya.

Facing more competition, Cisco has tried to show that while its technology may be more expensive, it offers more long-term value . In a study released last October, Cisco acknowledged that its acquisition costs are higher, but put the capex premium at perhaps 25 percent to 30 percent, not the 30 percent to 50 percent that HP has claimed. Furthermore, Cisco said that the five year total cost of ownership for a Cisco network is only a 4 percent to 7 percent premium over an HP network.

"It's still a relatively small premium to pay for Cisco over HP," said Ross Fowler, VP of borderless network architecture at Cisco, arguing that Cisco offers a more intelligent network than does HP.

Whether a more intelligent network is valued more than a network that is reliable, performs well and is less costly will be discussed in the second part of this series.

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