When the City of Vaughan, Ont. sourced network gear to support new electronic services for its citizens, the municipality didn’t opt for the most obvious choice of vendor.
Rather than running straight to Cisco Systems Inc., Vaughan chose equipment from Enterasys Networks Inc.: the X-Pedition router, Matrix Ethernet switches, Vertical Horizon workgroup switches and RoamAbout for wireless connections.
“I think that it’s the lack of complexity of their technology, which is a good thing,” said Dimitri Yampolsky, the city’s CIO. “It is fairly straightforward, easy to implement. There were no surprises. And the support from Enterasys staff is outstanding. It’s really an easy implementation for us.”
Cisco’s dominance in networking is rarely disputed. According to Infonetics Research Inc., the vendor garnered almost 90 per cent of the high-end router market in Q2 2003. But Infonetics also says many competitors, including Enterasys, are aiming for Cisco’s jugular, looking to tear down the San Jose-based firm’s lead with low priced, high-performance products.
In fact, the research firm is calling for a shakeup in the router market – a shift in buying patterns that could see more enterprises following Vaughan’s lead, choosing a vendor other than Cisco.
“Certainly the next 12 months are an important time in terms of any shifting activity in the router market,” said Neil Osipuk, a directing analyst at Infonetics in San Jose.
He pointed out that enterprises are evaluating alternative vendors these days. “Economics play a large part. (Given) the climate we’re in, companies are looking for low-cost, feature-rich providers.”
Osipuk said vendors like Allied Telesyn Inc., Adtran Inc. and Quick Eagle Networks Inc. are making strides in the low-level router market, while Enterasys has added security features to make its routers more attractive to mid-sized customers.
Mark Pearce, a Liverpool, U.K.-based product marketing manager at Enterasys, said his firm makes security part of the network, rather than an addendum. Enterasys’s XSR routers, for example, ship with VPN capabilities and acceleration technology built onto the motherboard to boost performance under heavy loads. Enterasys plans to include intrusion detection functions by year’s end.
But the company is realistic about its prospects.
“We’re not going to be number one, let’s be honest,” Pearce said. “Our aim is to be the number two market share vendor in this space worldwide.”
According to Jeanne Beliveau-Dunn, a senior director at Cisco in San Jose, the company maintains its lead by paying attention to customers and the competition.
“Our customers are very good at telling us if our competitors are doing interesting, innovative things, (saying) ‘You should be moving down this direction.’ The things we think make sense, we adopt.”
For the moment, Cisco’s crown is secure. In Q2 2003 the firm had 88 per cent revenue market share for high-end routers, according to Infonetics, and 84 per cent revenue market share for mid-range routers. Although it trails Vanguard Managed Solutions LLC in the low-end or small-office home-office (SOHO) router segment in terms of revenue, Cisco remains the king so far as units-shipped is concerned.
Osipuk said customers consider product reliability, how committed a vendor is to industry standards, post-sale support offerings and the vendor’s financial stability when making a buying decision. To entice the enterprise, “certainly vendors will need to have good stories around those issues,” he said.
Vaughan’s Yampolsky said security, price and adherence to industry standards set Enterasys apart from the competition. The city also uses equipment from Cisco, but speaking as a networking professional, Yampolsky said the router giant should watch its back.
“For medium-size networks, they have a lot of challengers. Unless they look around and do their reconnaissance and become more competitive in terms of providing better value, they probably will lose a significant piece of that market.
“In the large enterprise marketplace, I think they’re so far unbeatable.”