It’s a switch off. Well, actually, it’s more like vendors are trying to switch on the charm in an effort tackle incumbent giant, Cisco, in the switching space.
In the past 12 months, there has been no shortage of action. Juniper launched its EX line of switches, notably including a chassis-based datacentre switch, the eight-slot EX 8208. ProCurve by HP also took the fi ght to Cisco by introducing the fi rst switches optimised for datacentre duty.
Enterasys owner, Gores Group, bought a 51 per cent stake in Siemens Enterprise Communications, and announced intentions of closer collaboration, which will result in a $US5 billion global player in secure switching, unifi ed communications and WLANs. But perhaps the biggest story was on storage-area network (SAN) switch maker, Brocade, which announced plans to acquire Foundry Networks in preparation for the upcoming unifi ed fabric battle.
Not to be outdone, though, Cisco also announced the Nexus 7000, its next-generation datacentre switch.
“The competitive networking market landscape is complex as it varies by product and market sector,” IDC networking analyst, Jamie Jin, said. “From an Australian enterprise switch and router market perspective, Cisco has dominated the market for a long time.
“However, there are very competitive solutions from other vendors today. HP ProCurve, Netgear, Extreme Networks, 3Com and Nortel are all performing very well and are actively differentiating themselves with competitive prices and services. “Juniper launched its new switching product line last year and this is expected to increase competition going forward. In the service provider market, Cisco leads the core network routing market while Alcatel- Lucent and Juniper are doing well with their edge networking solutions.”
In short, the game is on. ---pb--- The reigning champ
Cisco has dominated the datacentre switch market. While some say it has secured as much as 70 per cent of the market, it doesn’t seem to be enough.
“There are various people within the switching space. I don’t see any one more competitive than the other,” Cisco datacentre general manager, Dylan Morrison, said. “What Cisco has done is actually read the market in terms of what is happening from a technology view point and I think we are a little unique, especially around the datacentre space in regards to what our vision and direction is. Some of the acquisitions that have happened really start to validate where we are going and what we are delivering.”
That vision includes two major interlocking trends: Virtualisation and the move to 10Gb. In a nutshell, the much vaunted development of server virtualisation in the datacentre has begun to migrate many switching environments to 10Gb. In part, Cisco has helped drive this trend with smarter switches – the Nexus range for example – that understand virtualised environments better.
“You are also starting to see some of the LAN on motherboard providers putting 10Gb as a standard for server platforms,” Morrison added. “That will really drive 10Gb as an adoption. But on top of this is being more virtual machineaware networking.
“There are some gotchas with virtualisation. If people have layer 3 networks, they need to revisit it. If they want to try and manage and have visibility of virtual machines in a virtual environment, you can’t do that just through traditional networking or switching. You have to have things that are aware of virtualisation. For the Nexus 1000, we are embedding it in VMware.”
While there are few that openly attack Cisco from a technology perspective, except on a standards front, there are those that will happily do so on a price point. Yet, while the view that Cisco is more expensive per port is commonly held, it doesn’t faze Morrison.
“I don’t think we are a higher price point. Half the time you are comparing an apple to an orange. If you actually look at the overall solution cost, I think we are by far cheaper,” he countered. “But if someone wants to go one port versus another port, that is irrelevant. That is not how an overall design is done; it’s not how a solution is bought. People will try to break it down to that level but it just doesn’t make sense.”
But to try and fl ank the biggest datacentre player in a weak economy by raising the price question is an obvious measure, at least to gain some mindshare in a crowded market.
When you consider the datacentre is now the holy IT grail for many market segments, and switching has become such an integral element of the IT infrastructure, you can see why such tactics are deployed. Add to this the resilience of the datacentre business in the face of the global economic problems and the picture sharpens.
For Westcon Group sales director, Leigh Howard, the switching market has remained robust.
“I’m surprised it is going as well as it is,” he said. “We haven’t seen a slowdown and we have three major switching vendors – Cisco, Nortel and Juniper.
“If you look at the market environment, I suspect that people now want to do more with less, they are looking for quicker returns and lower cost of ownership. You would have thought those people who were thinking about doing switching upgrades or refreshes, might just hold off. Maybe that is still yet to happen but I haven’t seen it refl ected in our fi gures here.”
IDC’s Jin claimed a softening of the market in the last quarter of 2008 in some areas, but said there would still be demand going forward.
“We have had reports of decision-making taking longer but there has also been a stall on government contracts due to the Gershon report happening simultaneously,” Jin said. “The economic slump has not deterred the amount of data being generated and hence the need to scale networks to meet demand is still going to be there going forward.” ---pb--- The challengers
It is this kind of outcome that has given hope to many of Cisco’s challengers and even led to increased M&A activity.
The Brocade/Foundry deal is one example of smaller vendors joining up to take on the major vendor in the market. Juniper Networks systems engineer manager, Matt Miller, said at the end of the day, Foundry on its own, and other smaller vendors, fi nd it very diffi cult to differentiate themselves in a saturated market.
“The market being $500 million in Australia and New Zealand alone is from anyone’s perspective, quite a bright light, especially in the current economic climate,” he claimed. “It makes sense for those sorts of consolidations and acquisitions to happen. It gets a little bit of weight behind them, but also shows they can move forward and specialise.”
In recent days, HP has also stepped into the ring with additional fi re power, bringing a new range of ProCurve datacentre switches to market along with an alliance called Open Network Ecosystem (ONE).
“We always go for open standards. Correct me if I am wrong, but people don’t like to be, and especially in these times, locked in,” ProCurve South Pacifi c marketing manager, Mark Berends, said. “ProCurve ONE is teaming up with people like F5, Riverbed, Microsoft, Avaya, and saying you do what you do best, and we’ll pre-test it and put it into our switches.
“What we are saying to customers is you have a choice. You can go for open standards, you can go for best-of-breed. Or there are other people out there selling you a different solution and telling you they can do the best of everything. I don’t believe in any industry you can do the best of everything.”
In contrast, D-Link has taken the specialisation route – focusing on education and the security/ surveillance market. While not giving up on the datacentre gold, this approach allows the vendor to differentiate and ingratiate itself with market segments, like surveillance.
“It is a market that has been and is transitioning from the traditional CCTV environment, where there are many organisations out there who operate in that particular vertical who are not educated on IP technology,” D-Link managing director, Domenic Torre, said. “There are defi nitely opportunities in IP surveillance equipment.”
Others, such as 3Com and Alcatel-Lucent, point to the enterprise space as attractive because as IP networks become further entrenched in IT infrastructures, its appeal is going to get stronger as the primary network running throughout organisations. This all leads to switching refreshes and updates.
“The competitive landscape is as strong as it has ever been from our perspective,” Alcatel- Lucent enterprise business group portfolio director, Mark Magill, claimed. And 3Com enterprise product marketing manager Asia-Pacifi c, Andrew Hindmarch, wasn’t about to disagree.
“We know the big C is dominating the market at the moment, however, we do believe – and from my experience across the region I am seeing this – customers are exercising their choice a lot more,” he said.
“In this financial time where budgets are stretched to the limit and value is key, they are looking for an alternative to compare to deliver the same functionality and features that Cisco has been delivering for a while. While we have been doing that, 3Com is also very much strategically focused on the enterprise.”
However, there are those that prefer to play in the lower end of town.
“There is always competition between ourselves and Linksys in that space,” Netgear managing director, Ryan Parker, said.
“Where we probably butt heads most is the smart switch space or the web managed switch space, which was a category of switches designed to fi t between the traditional unmanaged switch and the layer two switching space. If you look around the world, between Linksys and ourselves we are the leaders in that space.
“Within the last 12 months, green has been an important part of our switch strategy because being able to reduce the heat and consumption in datacentre energy has been important. But traditionally, it has been more about bringing enterprise-level feature sets.
“So the standard features that an enterprise would use like rate limiting storm control, and making them available at a price point that an SMB can afford.
“Your average 40-50 seat business has a lot of the same needs as a large enterprise but just not the IT budget or skill set.” Fighting it out
Whether you side with the incumbent or are looking to team with a different vendor, there is no doubt the switching space is both fi ercely competitive and lucrative. As a result, channel players must ensure they have the right message to take to market backed up by the right training.
“On all the deals we are working on or have been across, having a solid ROI for the customer looking at the overall total cost is more than ever critical,” Cisco’s Morrison advised.
“Customers are doing a lot more due diligence on IT spend to make sure there is a return on investment. You need to be able to demonstrate you can gain more effi ciency into that environment.”
To achieve this, channel partners can’t just look at a switch as a switch – they have to look at the solution and a vendor’s entire portfolio.
“People are asking for an ABC, they are asking for an alternative. And that is the opportunity for the channel partners in helping them identify them,” Juniper’s Miller said.
“The beauty of the switch market, and this is probably the reason we entered it, is the opportunity is there for all of us. Whether it is the vendors or the channel partners, there are plenty of switches out there. “A lot of people see their switches as a commodity and they aren’t. It is a very strategic part of their infrastructure.”