Cisco Pushes Back Against Networking Rivals, Critics

 
 
By Jeffrey Burt  |  Posted 2011-04-27
 
 
 

Cisco Systems, which has seen its networking business come under increasing pressure in recent months from rivals, such as Hewlett-Packard and Juniper Networks, is hitting back with a marketing campaign that touts its broad product portfolio as significantly better than "good enough."

Cisco kicked off the campaign April 25 with the release of a press statement, video and white paper outlining why, in the current business climate, enterprises need a complete networking solution. The company continued the message with a Webcast April 27 in which Cisco executives and a partner said that with such trends as cloud computing and the consumerization of IT, the idea that networking is a commodity makes no sense.

"It's not a commodity in our mind," said Bob Cagnazzi, CEO of Cisco partner BlueWater Communications Group. "It's not a commodity in our clients' mind. ... It is mission-critical."

Cisco continues to dominate the networking space, with some analyst firms putting its market share at more than 65 percent. However, in recent years, other vendors, including HP, Juniper and Avaya, have begun to chip away at that dominance, through a combination of in-house innovation and acquisitions, such as HP's $2.7 billion purchase of 3Com last year.

One of the areas where they attacked Cisco has been in price, arguing that Cisco products were far too expensive. They also cautioned against vendor lock-in when choosing a Cisco solution. Some analyst firms, such as Gartner, also have argued against the need for a single-vendor solution, saying that companies that have added a second vendor into a Cisco environment had not seen any detrimental financial or operational effects.

However, during the Webcast, Mike Rau, vice president and CTO of Cisco's Borderless Networks unit, argued for the benefits that come with the deep integration between the company's various products. In addition, the network management and security offerings offered by Cisco give enterprises a greater of control and confidence in the products, Rau said.

If a business uses best-of-breed products from multiple vendors, they'll only get a fraction of the benefits that can come from a total Cisco infrastructure, he said.

Those benefits are going to be important as the business world evolves, said Rob Lloyd, executive vice president of worldwide operations at Cisco. Video, cloud computing and the number of consumer devices being brought into the workplace will continue to grow, putting more pressure on the network, Lloyd said.

Rau also disputed the contention that Cisco deals in proprietary products. The company has a $5 billion research and development budget, he said, and a lot of innovation comes out of it. However, Cisco also pushes to have many of these innovations made into industry standards, Rau said, pointing to Fibre Channel-over-Ethernet as an example.

BlueWater Communications' Cagnazzi said that for a wide range of industries, such as financial services, the network is a critical piece of the infrastructure.

"Good enough is not good enough when any downtime can mean millions of dollars to them," he said.

Cisco's efforts come as the $40 billion company tries to find its footing after several difficult quarters that have seen disappointing earnings, harsh criticism from analysts and journalists, a loss of some executives and struggles in some of its key businesses, including its core switches and routers.

The issues resulted in CEO John Chambers in early April telling the company's 73,000 employees in an internal memo that the company had lost some credibility in the industry by failing to execute on what he said is a solid roadmap. Chambers promised changes, the first of which was felt a week later when the company shuttered its Flip video camera business and revamped its consumer products business.

 


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