Cisco's LAN Stronghold: Good As It Ever Was
In the networking industry there's Cisco and then there's everyone else. But in LAN switching it's even more so.
If we posed the question to IT pros: What's more reliable, your phone network or data network? Most would now tell us that it's a dumb question, they're the same network.
That transition over the past decade makes the LAN ultra-critical for companies today, just as critical as keeping the lights on and the coffee flowing. So it's not at all surprising that in our recent IT Pro Ranking, 444 IT professionals, who either use, have used, or have evaluated the products and vendors we asked about, placed product reliability and product performance as their two most important factors for evaluating LAN vendors and products.
In fact, those two factors rated so high in importance, and Cisco did so well against them, the story almost begins and ends there. Of our 11 criteria, Cisco rated a 4.0 (out of 5) or better on four of the criteria, while no other vendor did that well on more than two. Others making our survey (getting at least 50 responses to our poll) included: Brocade, HP, Juniper, Dell, and Netgear.
Cisco also got the lowest score in our survey, scoring a 3.0 for acquisition cost, whereas no other vendor scored below a 3.2. Operation cost was second lowest for Cisco at 3.5. Meanwhile, HP scored 3.9 and 3.8 on those criteria respectively, Dell came in at 4.1 and 3.8, and Netgear registered 4.2 and 3.0. But cost is not the primary concern for network architects and Cisco knows it. It also knows that when it sets prices, others will move theirs accordingly. No matter what Cisco did with its prices, others will set theirs lower.
Such is the nature of a mature market with reasonable margins and market share leader the likes of Cisco. And lead it does. In our survey, 85% of respondents said they have used or evaluated Cisco products. HP ranks a distant second with 33%, then Dell and Netgear at 22%, Juniper at 20%, and Brocade at 12%. Included in our survey, but not getting enough responses to qualify for inclusion were: Avaya, IBM, Alcatel-Lucent, Extreme, Enterasys, NEC, Arista, and Force 10, all of which had less than 8% reporting use.
In our standard overall weighted score, Cisco ended up with 77%, followed by a three-way tie between HP, Juniper, and Brocade, all at 73%. Dell and Netgear followed with 71% and 70% respectively. The nature of our survey methodology tends to bunch vendors together when we calculate the aggregate score. High-function products are offset by their high prices, while low-function products are boosted by their typically lower prices.
Along with our standardized 11-point rating system, we also asked about 15 features specific to LAN switching. When we asked product users to rate these criteria, cost per port, management software, port density, dynamic port configuration, and pre-port security were deemed most important while layer 2 encryption, proprietary features in advance of standards, and 40-Gbps or 100-Gbps uplinks turned as least important. Here again, in aggregated scores, Cisco came out on top with 75%, then Brocade at 71%, HP and 70%, Juniper at 69%, Dell at 68%, and Netgear at 63%.
All this seems like great news for Cisco, and at least for the moment it is. As report author Mike Fratto points out, the Catalyst 6500 is the product of choice for many LAN architects. But eventually, it too will run out of steam. But when Cisco execs spend a sleepless night worrying about how to maintain their enviable market share and profit margins, they don't worry about any of the vendors I've mentioned here, at least not individually. The company they worry about is Broadcom.
Broadcom now produces a broad range of high-performance chips that let equipment manufacturers build high-density switches with relatively few parts, including its StrataXGS chips, which supports 100-Gbps Ethernet for carriers and 40-Gbps Ethernet for the enterprise. The system-on-a-chip design can support 64 10-Gbps ports and supports relevant standards from DCB to TRILL to OpenFlow. In other words, Cisco has to count on the attractiveness of some pretty esoteric features in its own silicon to beat out any vendor who decides to spin out a switch based on Broadcom's chips.
Users who take the time to make careful side by side comparison between products built on Cisco's own silicon and those built on Broadcom's may not find much of a difference--at least in the features that matter most to them.
This being a mature product category, we weren't all that surprised to see that 60% of responden7ts saying that they had no interest in replacing or adding new LAN switch vendors. That's good news for Cisco. But when we asked that 60% what it would take to get them to reconsider, the top response by a good margin was substantial capital cost savings.
For vendors looking to unseat Cisco as the king of the hill, the task is still daunting. Many will read the survey results and find that it doesn't match the reality of current product offerings. And while that may be true, our survey represents the perceptions of actual product users and as such, it's going to be tough sell to an audience who're pretty much saying, "We'd consider changing vendors if you were giving the stuff away."