By A Whisker, It's... Cisco - InformationWeek

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12/9/2005
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By A Whisker, It's... Cisco

In our exclusive reader survey, performance, reliability, and stability outrank even best price when it comes to choosing a networking vendor. That puts Cisco on top.

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."

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NASA, like many businesses, has initiatives coming up involving VoIP and campuswide wireless access. Three in five companies surveyed are in the process of merging voice and data systems onto one network, and wireless networks are a tactical priority for half of companies now and in the coming year. "There's lots of infrastructure upgrades on the horizon, and Cisco brings those requirements," Paragone says. "They understand what needs to be done." Cisco recently introduced wireless service and wireless LAN controller modules, which plug into a company's existing Cisco Catalyst switches and Integrated Services Routers, as a way to integrate wireless and wireline LAN management rather than relying on standalone wireless switches.

Besides the highest overall ranking, Cisco also received the highest single score, with 8.5 in two categories: company stability and product performance/reliability. "Customers who really 'get it' see that [the network] is a platform for change, and they look at it much more from an application focus," says Wim Elfrink, Cisco's senior VP of customer advocacy.

Reliability and company stability matter because choosing a networking vendor is often a long-term decision for businesses. "It's kind of like a set of luggage," says John McHugh, VP and general manager of HP's ProCurve networking arm. HP gave Cisco a run for its money in most categories, trailing close behind in performance and reliability at 8.2 and in stability at 8.3.

Cisco: The high-Price Leader
Cisco is the market leader, but it clearly has a high-price perception problem. In sharp contrast to its high score for stability and performance/reliability, Cisco's rating of 5.9 on price sticks out like an unprotected Internet connection, giving it the lowest score of any vendor in any category.

While this perception doesn't seem to be turning away the many businesses that are convinced Cisco is worth the cost, being known as the high-price leader opens the door for HP and others to take away business. Kentucky Bank has a split network setup, with some HP hardware and some Cisco hardware. Now budget challenges have network manager Perry Ingram considering whether he should bypass Cisco when he buys new managed switches next year. "Of course, Cisco is top of the line," he says. "I'm looking for something that's going to be easy to manage, but not at Cisco's price."

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