Commentary: No Cisco-free zone here

By Tim Smith, Neil Rickard, Bob Hafner and Mark Fabbi, Gartner Analysts

Despite reports of widespread defections from Cisco Systems, Gartner believes that networks--whether enterprise or public infrastructure--will not be "Cisco-free zones" anytime soon.

The networking giant certainly faces increased competitive pressure in the enterprise market these days, but the pressure comes more from cost considerations than from concerns about problems with Cisco technology.

	See news story: Cracks in Cisco's empire

For example, many enterprises that hastily migrated to Cisco after 3Com abandoned the high-end enterprise market in 2000 are now re-evaluating that decision. 3Com was one of the most price-sensitive vendors in the market, and the customers that moved to Cisco--as a safe, established choice--had to accept significantly higher prices than they were used to paying. Now that they have had time to consider their networking options, some of them--especially the most cost-conscious--are naturally thinking of switching to lower-cost vendors. But that does not mean Cisco's pre-eminence in the enterprise market is seriously threatened.

Gartner has not observed any strong demand for features or functions that Cisco cannot offer. And in any case, Cisco's continuing market dominance has less to do with technology than with execution. After more than 10 years as the clear leader in networking products, Cisco has the brand recognition, marketing skill and sheer market presence to retain its position for a very long time to come.

Different dynamics apply in service providers' public infrastructure networks--and competitive alternatives are much more viable--but Cisco still commands a strong position in this market, too. Compatibility with Cisco software functions and operations is essential in this area because of Cisco's ubiquity in service provider networks. Fierce competition in service provider networks--both at the edge and in the core--will continue, however, and Cisco will have to follow aggressive cost and functionality curves.

The market does present significant new opportunities for Cisco's competitors to increase their enterprise market share, particularly if they can execute on perceived technological advantages. The public infrastructure market, by contrast, offers many legitimate alternatives to Cisco technology. Gartner believes that these markets will continue to present opportunities for Cisco competitors.

Cisco's early presence in public infrastructure markets and networks means that any entrant must now prove compatibility with Cisco software to compete seriously. Like any established player in a technology market, Cisco faces the challenge of supporting its extensive installed base while it moves to new technologies and approaches--but its problems are no more daunting than any other vendor's.

Balancing these objectives will be an important factor in attaining growth. Cisco's major challenge in the capital-expenditure-constrained environment of the service providers will be to establish a stronger presence with the incumbent providers.

(For a related commentary on Cisco Systems, see gartner.com.)

Entire contents, Copyright © 2002 Gartner, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.