Crowded networking market heats up

Crowded networking market heats up

A crowded Australian market has created a fiercely competitive environment for networking providers with end user companies in a position to drive hard bargains.

Australian businesses are in a refresh cycle now, says Landry Fevre, IDC telecommunications research director and some organizations are preparing from the ground up for IP telephony.

"There are some new players in the local switch market like Hewlett-Packard (HP) and Netgear, which are growing consistently," he said.

"However, in Australia Cisco is a formidable vacuum responsible for 80 percent of the router market and a 70 percent stranglehold on switches."

But Cisco's dominance is under threat in all segments of the networking market with the likes of Foundry, Expand, 3Com, Enterasys and Allied Telesyn strengthening their positions.

Only two years ago buying Cisco was the norm, according to Allied Telesyn managing director Mark Jackson, but today enterprises realize the same technology is available at lower prices.

"We are all fighting the same cause: the Cisco giant," Jackson said.

"Customers in most verticals are willing to look at similar offerings even in the tier one telecommunications space where carriers such as Telstra and Optus are no longer Cisco shops; they have opened up to smaller vendors in a bid to reduce costs."

Jackson admits it is "interesting times". With so many providers offering similar technologies it basically comes down to price.

Only last week in an article entitled "Cisco, 3Com fire up new WAN routers" (CW, September 20, p15), The Yankee Group warned low-cost competition in Asia has created a router war.

While Allied Telesyn has a broad product range from QoS solutions to DSL access multiplexers specifically designed for triple-play applications such as video, voice and data over one broadband connection, Jackson said there are still untapped opportunities in specific segments of the local market.

"This shift in the market away from Cisco has created intense competition and there are a lot more players in the market but there is always room if the technology fits; we are continuing to target the education sector and hospitality," Jackson said.

The company supplies the NSW Department of Education and has been providing fibre optic-based switches and network adapters to the Department of Defence for the past four years.

As for the next two years, Jackson said companies are moving away from Frame Relay because costs are too high and vendors are working to build more intelligence into the network.

"The biggest changes recently have been in the carrier space with voice and data convergence; the next major shift will be IPv6," he said.

- with Michael Crawford

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