Gartner rolled out a new Magic Quadrant for Enterprise LAN this month and it looks remarkably similar to last year’s, even though Gartner itself acknowledges that the network switching industry is rapidly evolving.
For the uninitiated, the Magic Quadrant is Gartner’s graphical evaluation tool for the technology markets it covers. It breaks down the vendor landscape into four quadrants: Leaders, visionaries, challengers and niche players. Gartner evaluates vendors via two general criteria (which in turn contain a handful of sub-criteria). The evaluation criteria are “completeness of vision” (or how much Gartner likes the direction a vendor is going with its technology) and “ability to execute” (or how much Gartner believes a given vendor has the marketing, sales and engineering resources to deliver on their promises to customers). Leaders score high in both, challengers score high in execution, visionaries in vision. Niche players score relatively low in both.
The only major change to the quadrant this year is the entry of Juniper Networks, which has quickly established itself as a big-time player in the switching industry. Gartner has named Juniper a challenger in this year’s quadrant, when last year it didn’t even meet the revenue requirements for inclusion. Gartner praised Juniper for its strong history in networking (particularly in Layer 3 routing), its aggressive pricing and its strong, young portfolio of switches. Gartner cautioned that Juniper needs to continue expanding its product line and it needs to get more specific on how it’s going to address next generation data centers. Project Stratus remains relatively vague. Juniper also has no clear WLAN strategy, which is a concern since 60% of enterprises like to buy switches and WLAN products from the same vendor.
Cisco Systems and HP Networking remain leaders. Cisco still has the broadest portfolio of switches and WLAN products on the market. It’s introduced several innovations recently, such as StackPower (the ability to manage the power systems of a stack of Catalyst 3750s collectively) and its new NX-OS operating system for its new Nexus data center switches. However, Gartner says Cisco has been slow in executing a unified wired and wireless product line. Cisco has also left many customers confused about how data centers built with the Catalyst product line will be integrated into the Nexus line. Gartner also claims that customers continue to be critical of Cisco’s efforts in sales, engineering and support.
Gartner says HP’s acquisition of 3Com (a visionary in last year’s quadrant) has combined the number 2 and 3 vendors in the market into a single Tier 1 vendor that has transformed the market. Gartner says enterprises should now consider HP for all its networking needs when evaluating vendors. The lifetime hardware warranties and telephone support across most of its products lowers the TCO HP-built networks. However, Gartner warns that the integration of HP and 3Com will take time simply because the product lines are so big. And there is quite a bit of redundancy between the two vendors, which will cause some confusion. HP’s sales force is also relatively new to networking, which some enterprise networking pros might find as a turnoff if they’re used to buying network hardware from knowledgeable sales pros.
Brocade remains a visionary. Its combination of high-end switching and storage networking expertise bodes well for its vision for its data center strategy and Gartner says the customer support legacy of its Foundry Networks acquisition remains strong.
Extreme Networks, Enterasys/Siemens, and Alcatel Lucent remain niche players. Nortel (now Avaya) is also still a niche player. Force 10 Networks, which dropped off the the quadrant last year because of revenue, has not made its way back.
Although the quadrant looks very similar to last year’s, Gartner says that the networking market has transformed tremendously in the last year. Juniper and HP have established themselves as legitimate Tier 1 vendor alternatives to Cisco. The days of “Cisco and the seven dwarfs” are over. Brocade (with its Foundry acquisition) is strong in the data center, not so much in campus LAN.
Aside from the horse race aspect of the vendors, Gartner has also identified several key innovation trends that enterprises should follow closely to see how their vendors respond.
- IP Telephony: Gartner says vendors have varied in their commitment to integrating their network equipment with IP telephony vendors. Specifically, vendors who have their own IP telephony products haven’t been as aggressive in integrating their products with competitors’ IP telephony equipment to meet customer requirements.
- Security: Gartner says network access control (NAC) will be a mainstream requirement for enterprises within two years. It expects that switch vendors will start to embed NAC into their gear in the next couple years. Entersasys has been a leader in this area with its flow-based security technology.
- Evolving network cores: Here is where things are changing rapidly in the enterprise LAN market. With Gigabit Ethernet (GbE) server connections becoming common, low latency, wirespeed core switches with high-density 10 GbE ports are becoming a requirement. Vendors are racing to establish a leadership role here. Data center bridging, fibre channel over Ethernet (FCoE) and the convergence of storage and data on Ethernet are also going to become major disruptions to the market.
- Converged access: Gartner also notes that the drive to integrate wired and wireless networks will lead to the disappearance of the standalone wireless LAN controller. Vendors are integrating controller functionality into their switches. Those who don’t have their own WLAN product lines will be partnering with standalone WLAN vendors to make this happen
- Price: Gartner notes that the average gross margin on networking gear remains around 60% or 65%, which means there is a lot of room for vendors to come down on price in certain situations. Enterprises are more cost-conscious these days and they’re thinking more about the life cycle cost of the networks they build. This means they aren’t just interested in seeing vendors discount their products to win deals. They also want to know that managing and maintaining the networks they build won’t be too expensive.