Cisco domination stifles IT manager purchasing

In a scenario similar to Microsoft's dominance in the desktop space, Cisco's stranglehold in the networking market has created a new form of vendor lock-in for IT managers.

Not only has it reduced choice for enterprise customers, Foundry Network's Asia Pacific sales director Gordon Vick claims the channel is fearful of selling other vendors' technology because they will be reprimanded and brought back in line if they don't remain loyal partners.

Looking back 10 years, Vick said channel partners of enterprise networking vendors used to be "genuine integrators" who had access to the technology of two or three different providers, selling Cisco switches or Cableton hubs, but the days of the "true partner" are gone.

He said the channel now lacks true partners for user organisations, as they've become engrossed in maintaining Gold partner status.

"The amount of money resellers and dealers need to invest to keep that status is significant in terms of training their sales and consulting force. It limits those vendors who can afford to offer other vendors' products," Vick said, adding that resellers face an "overt" threat if they commit to other accounts or risk losing big existing accounts.

"What customers often don't stop to consider is they can increase their bargaining power by having at least two or more vendors on the hook for a certain type of technology. The competition encourages vendors to play against each other and you can end up getting a better price," Vick said.

He said with networking providers like Cisco remaining the "dominant market player, it's difficult for customers to get quality integrators selling any other vendor's product other than a firewall product from Netscreen", forcing companies like Foundry to move into a more "hybrid" sales model including direct sales and business development.

According to a former client services manager for CSC Australia this scenario is particularly true for smaller or mid-sized companies that only have one or two contractors or consultants.

"The IT budgets are particularly tight and the IT person is expected to put in whatever is cheapest and does the job. So more often they will lock themselves into the products of lower-tier providers like Netgear, Belcon or 3Com," he said.

"Or if that IT person is Cisco-certified, they're seen as knowing the networking market and the big providers more than anyone in the business, so will lead them down that path," he said.

One area where competition is heating up for Cisco is in the area of routers, according to Gartner research director Neil Rickard and principal analyst Andy Rolfe.

Cisco now faces yet more competition for its routers. In early years, Cisco built its dominance with the breadth of protocols it supported. Now enterprises do not look for a long list of supported protocols but for features to support virtual private networks. Here, Cisco faces stronger competition.

Melbourne-based law firm Jerrard and Stuck Lawyers is largely a Cisco shop which also buys from Cisco resellers, said IT manager Greg Bromage.

However, the company was also considering 3Com gear recently for a refresh of its IP telephony system.

Bromage said as IT manager of the firm for the past two years, Cisco partners don't always push Cisco products but have also pitched other brands like Netgear. But overall he finds resellers will tend to "push the solution they know" and are skilled in implementing.

The downside of resellers with a vendor bias is that it reduces a lot of choice for customers, leaving them with a solution that only fits 90 per cent of their needs.

Always the cynical buyer, he said: "I always look past the pitch. I like to determine my own requirements."

Bromage said he has always been a big-brand buyer, feeling it is safer to go with a reputable provider because "their gear is reliable".

Bromage advised IT buyers "not to rely on a vendor or reseller's assessment" of a product or service, but to leverage end-user experience from user groups, speak to peers in IT and ask vendors "straight out" anything you need to from an independent product comparisons or benchmark.

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