Reader Survey: Top Networking Vendors
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I.T. networks almost never fail, and technology managers will pay a premium to keep it that way. Over the next 12 months, businesses will invest more in voice over IP, increase network bandwidth, and add more wireless users, and they'll do those things with reliability and performance as priorities, sometimes forgoing the lowest price options. It's about expanding what networks can do while keeping quality high--and it's a formula that works in Cisco Systems' favor. So far.

A new survey by InformationWeek Research, Analyzing The Networking Vendors, paints a picture of IT networks becoming even more critical in the coming year. Most companies are experiencing traffic increases of more than 25% a year on their networks. Businesses are getting more comfortable that they have basics such as security in place, but as they add more services like voice to IP networks, reliability becomes ever more important. While our survey finds cost is the biggest challenge in implementing a network strategy, the top criteria for selecting a vendor are reliability and product quality, followed closely by product performance. Price ranks fourth out of 15 criteria.

That explains why Cisco, considered the highest-priced option, can still be the top-ranked networking company overall. Yet the ratings show a close race: On a 1 to 10 scale, Cisco rates 7.84, Hewlett-Packard 7.81, 3Com 7.42, and Nortel Networks 7.24. The study, conducted in November and based on responses of 623 business-technology professionals working at companies ranging in size from $6 million to more than a $1 billion in annual revenue, rates the vendors' strengths and weaknesses, with respondents ranking only their primary networking providers. Other vendors, such as Extreme Networks Inc. and Enterasys Networks Inc., didn't generate enough respondents to qualify.

More than half of respondents say they'll spend somewhat more or significantly more on networks next year, with voice over IP, wireless, and bandwidth as priorities cited by at least half of respondents. For three out of five companies, network traffic is growing 26% a year or more, so picking the right networking vendor is a high-stakes decision. "There's obviously the concern for stability in the network [and] the reliability of the company itself," says Vincent Paragone, an independent consultant who led Lockheed Martin Corp.'s selection of Cisco for NASA's core network. "You're not going to get a second opportunity to say 'oops'; you're going to have to do it right the first time."

NASA, like many businesses, has initiatives coming up involving VoIP and campuswide wireless access. Three in five companies surveyed are in the process of merging voice and data systems onto one network, and wireless networks are a tactical priority for half of companies now and in the coming year. "There's lots of infrastructure upgrades on the horizon, and Cisco brings those requirements," Paragone says. "They understand what needs to be done." Cisco recently introduced wireless service and wireless LAN controller modules, which plug into a company's existing Cisco Catalyst switches and Integrated Services Routers, as a way to integrate wireless and wireline LAN management rather than relying on standalone wireless switches.

Besides the highest overall ranking, Cisco also received the highest single score, with 8.5 in two categories: company stability and product performance/reliability. "Customers who really 'get it' see that [the network] is a platform for change, and they look at it much more from an application focus," says Wim Elfrink, Cisco's senior VP of customer advocacy.

Reliability and company stability matter because choosing a networking vendor is often a long-term decision for businesses. "It's kind of like a set of luggage," says John McHugh, VP and general manager of HP's ProCurve networking arm. HP gave Cisco a run for its money in most categories, trailing close behind in performance and reliability at 8.2 and in stability at 8.3.

Cisco: The high-Price Leader
Cisco is the market leader, but it clearly has a high-price perception problem. In sharp contrast to its high score for stability and performance/reliability, Cisco's rating of 5.9 on price sticks out like an unprotected Internet connection, giving it the lowest score of any vendor in any category.

While this perception doesn't seem to be turning away the many businesses that are convinced Cisco is worth the cost, being known as the high-price leader opens the door for HP and others to take away business. Kentucky Bank has a split network setup, with some HP hardware and some Cisco hardware. Now budget challenges have network manager Perry Ingram considering whether he should bypass Cisco when he buys new managed switches next year. "Of course, Cisco is top of the line," he says. "I'm looking for something that's going to be easy to manage, but not at Cisco's price."

 Jack Daniel, CIO of South Shore Imported Cars Inc., a chain of dealerships south of Boston, is another possible HP convert. He chose mostly Cisco hardware for a 150-user network because of its resiliency. "The stuff is pricey, but it's stable," he says. "Once I have [their routers and switches] configured and tweaked, they just chug along forever." But Daniel says he's looking at HP's ProCurve line and its unlimited warranties as a complement to--and possible replacement for--Cisco over the longer term. HP, in fact, nearly tied with Cisco on overall satisfaction, thanks in part to its score on best/lowest price.

Cost could become more of an issue in the coming months as companies ramp up those wireless and VoIP networks. Although cost ranks fourth among the top priorities for selecting a vendor, it was cited as the biggest challenge companies face in executing their network strategies. The survey question regarding satisfaction levels with prices brought in some of the lowest overall scores for the study.

Cisco doesn't like talking about price but responds with what's essentially a you-get-what-you-pay-for line. "We try to focus on price/performance, and we have an excellent history of price adjustments, but I am very candid to say that perception is reality," Elfrink says. Purchasing "is a difficult task for a CIO, but we try to focus on total cost of ownership and ability to open up new business models; the return on investment of newly created services or applications." Nortel and 3Com tied for second in the best-prices category, with scores of 6.8; HP was the leader with a 7.1.

Preparing For Future networks
Businesses have been working to cover the network basics, like security, and appear ready to add network services in the coming months. Firewall services have been at the forefront this year, with 72% of respondents calling them a tactical priority, and 43% of respondents say core router services are a priority. But over the next 12 months, just 28% expect firewall services to be a priority, and only 18% will be focused on router services.

The security of network operating systems has been under close scrutiny. Amid concerns about the pace and ease of Cisco software patching, the company had to issue several advisories for vulnerabilities in its Internetwork Operating System, and a recent SANS Institute report on the 20 most-critical Internet security vulnerabilities cited network operating systems as a significant new target for hackers. Yet networking vendors fared reasonably well for security in our survey; Cisco had the highest marks of any vendor, at 7.9, followed by HP at 7.6, Nortel at 7.4, and 3Com at 7.2.

NASA adviser Paragone says security influenced his decision to go with Cisco. NASA is "probably as big a target as anyone else, if not bigger," he says. "So preventing infrastructure compromise and preventing data loss or denial of service, [that's] what they're facing." But not all Cisco customers are pleased. Terry Hamidi, network administrator at Colonial Savings FA, says he was "very unhappy and dissatisfied" with the Cisco intrusion-detection system he managed until six months ago, when he chose a new product he declines to name. A reseller installed the Cisco intrusion-detection system, and Colonial Savings' networking team wasn't given enough documentation or training, despite repeated calls to the reseller and Cisco, Hamidi says. Now the system sits idle while its replacement sniffs along for intrusions.

3Com would have liked to score higher on security, having spent $430 million on its acquisition last year of security company TippingPoint, which makes intrusion-prevention systems. "We think we're extraordinarily strong in security," 3Com chief marketing officer Jim Freeze says.

Among survey respondents investing in VoIP, the main drivers are reduced costs, improved productivity, real-time access to company data, and easier, reduced administration. Although South Shore's Daniel isn't going to move his car dealership to VoIP anytime soon, he knows the change will happen eventually, and he'll pay what he must to get reliable gear. A comprehensive service and support package also will be a priority with VoIP, Daniel says.

Major Challenges
Roughly one-third of respondents cited difficulty of administration as a major challenge. Hewlett-Packard received the highest score for product manageability, 8.1, followed by Cisco, 7.7; 3Com, 7.3; and Nortel, 7.2. Kentucky Bank's Ingram did a price comparison with 3Com and HP switches and found them both to be well-priced, but he preferred the configuration choices he'd get with HP. "We pride ourselves in having a very robust, very predictable, very straightforward product," HP's McHugh says. HP has its own line of network-management software and recently released plug-ins for the line that help manage wireless LAN components and user IDs on the network.

HP has come a long way to compete among the top ranks of the networking world, having started its ProCurve networking arm less than eight years ago. McHugh says HP has risen from 11th to second in port shipments in the Ethernet switching market, according to Dell'Oro Research numbers, and ranks third in revenue for switches behind Cisco and Nortel.

Service and support are the third most-important criteria for companies when selecting networking vendors. In this category, Cisco and HP provide a quick one-two punch at the top, scoring 7.9 and 7.8, respectively, followed by Nortel at 7.4. 3Com brings up the rear at 6.8, which apparently doesn't come as a surprise to the company. "We recognized earlier this year we weren't pleased with how we were being perceived from a service and support standpoint," 3Com's Freeze says.

3Com has taken steps to reverse its support problems. In September, it lured away Dell services marketing director Bob Riazzi and within the last year invested more than $10 million in a new tech-support and parts-logistics infrastructure, doubled stocking locations to create better turnaround, and increased training for the growing support team. It also has seen threefold improvements in the number of customer incidents it resolves within a day. "We're tracking our progress on a weekly basis," Freeze says.

Work To Do
Nortel, with its recent turmoil resulting from significant financial misreporting, may have the most work to do. The company ranks last in six of nine categories and third in two others; has comparably low scores in the areas of company stability, product performance/reliability, and manageability; and significantly lags in network-implementation services.

A shakeup is under way at Nortel. Since Michael Zafirovski took the reins as CEO in October, he has replaced several of the company's top execs with his own picks. "If you look at Nortel, obviously the last couple of years have been challenging for many reasons," says Phil Edholm, Nortel's chief technology officer. "But in the last month and a half, the company has had fundamental changes which should bode well for our enterprise customers." He and other Nortel executives have spent significant time with customers in recent weeks and have gotten positive feedback on company moves, including shifts toward wireless technologies and a stronger strategic focus on carrier and enterprise customers' needs, he adds.

Nortel has been moving within the past year to address manageability and network-implementation concerns, Edholm says. "There's significant increases in investment in manageability, in system-level tools," he says, citing Nortel's converged-network-management product for small business, which the company recently simplified. "Those are areas that I think we've recognized that we need to have more focus on." Nortel also added extensive features and functionality in its Enterprise Switch Manager 5.0, released in early September.

Despite the upheaval, many customers have stuck with Nortel. After years as a 3Com house and dissatisfaction with Cisco, Colonial Savings brought in Nortel to build out its networking infrastructure about five years ago and has stayed with the vendor because of its capabilities and flexibility for upgrades and prices. "I was pretty concerned about the company in the past couple years, but to my relief they've done an excellent job and their services have not seemed to have degraded," Hamidi says.

One thing is certain, though: Networking is far from being a set of commodity technologies that will be selected primarily on price. With business objectives such as wireless and VoIP making networking itself a top priority for businesses, and networking security risks continuing to rise, vendors that can convince customers that they're reliable partners with quality products that don't break the bank will reap most of the business.

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