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Cisco Leads, But HP Nipping At Its Heels

A new market research report shows that Cisco continues to dominate a wide swath of enterprise hardware markets, but that Hewlett Packard Enterprise is proving to be a strong challenger.

According to the Synergy Research Group report, Cisco leads six of seven enterprise infrastructure market segments: Ethernet switches, voice systems, WLAN, UC apps, routers, and telepresence. It ranks fifth in the one market it doesn't lead in -- data center servers -- and is gaining share there, analysts said. Cisco's share of the data center server market has grown from approximately 4% in 2013 to 6% in 2015, according to Synergy.

Across all seven segments, Cisco's market share over the last four quarters was 33%, up a percentage point from the preceding four quarters.  

"Cisco remains in a league of its own, accounting for a third of the market and gaining market share in the only segment where it is not the current leader," Synergy Research Group’s founder and Chief Analyst Jeremy Duke said in a prepared statement. "Across these hardware-oriented product areas, HPE is the only broad-based challenger to Cisco’s dominance and it has been steadily increasing its share of the market."

HP Enterprise, which leads in data center servers, ranks as the No. 2 vendor in both Ethernet switching and routers, according to the Synergy report. And with its acquisition of Aruba Networks last year, HP Enterprise is now the second-ranked enterprise WLAN vendor, leapfrogging Ruckus Wireless. Its market share across all seven segments was 18% in 2015, up a percentage point from 2014.

"In addition to being the leader in enterprise servers, HPE has for a while been the main challenger to Cisco in both enterprise Ethernet switching and enterprise routers, so no new news there," John Dinsdale, Synergy Research Group chief analyst and managing director, said in an email interview. "It had also been very active in enterprise WLAN for a while, but the Aruba acquisition gave it a major boost and pushed it into second place in the vendor ranking. It takes a big company with deep pockets to compete and succeed across a range of these enterprise segments."

Altogether, vendor revenue in the seven enterprise infrastructure market segments studied by Synergy grew 2.3% to $80 billion over the last four quarters. The largest segment -- data center servers -- grew nearly 2% while Ethernet switches grew almost 4%, up a percentage point from 2014. The enterprise WLAN market segment grew a healthy 5%, but that's down from 9% in 2014.

Figure 1:

The enterprise voice market and telepresence market segments suffered losses due to continued "aggressive price competition and market disruption," according to Synergy.

The Synergy report also cited other market leaders: In enterprise data center servers, Dell ranked as the No. 2 vendor while Avaya was the second ranked vendor in enterprise voice system and Microsoft was No. 2 in UC applications.

Arista Networks also has been making strides with steady market share growth in Ethernet switching, analysts noted.