Dell tries to beat Cisco with a switch

The switches, used to manage network traffic, are the $549 PowerConnect 3324, the $1,000 PowerConnect 3348 and the $2,000 PowerConnect 5212. All can prioritize Web traffic, a new feature for Dell switches that's meant to assure that the most important network traffic gets through.

Cisco Systems is Dell's chief rival for the estimated $12 billion businesses spend each year on network switches. Cisco dominates the market, selling about 60 percent of the world's switches. According to Chief Executive John Chambers, this position makes the company prone to "attacks from below," which is how he termed Dell's entry into the low-priced switch market two years ago.

The latest switches, even with added features, remain less expensive than Cisco's, said Dell Vice President Kim Goodman. "We tend to cost less than half of the price of competitors," she said. "That's still true with this new lineup."

Affordability of switches is often measured in terms of how much it costs to outfit a single port, which can be used to link a handful of desktop computers in an office. Dell says its switches cost $100 per port. Industry analysts, including the Meta Group, believe the industry average is between $300 to $500 a port.

A Cisco representative had no comment.

In a move to bolster its market-leading position, Cisco has made several changes recently, some directed at resellers catering to small to medium-sized businesses. In late March, Cisco also introduced its most significant upgrades yet for its biggest selling switch, the Catalyst 6500, used by about 100,000 corporations.