Cisco Rules The Data Center, But Disruptive Forces Loom

IT pros rank Cisco Systems as the highest-performing provider of data center networking gear, according to InformationWeek's latest vendor evaluation survey, in which 510 respondents rated seven vendors on a variety of criteria, including product performance, reliability, and cost. However, Cisco's ongoing dominance of this market is far from assured. Technological and market forces are transforming the data center, and IT is responding with upgrades and new architectures that open the door to competitors.

The biggest forces of transformation: virtualization and advances in Ethernet. Virtualization shunts more traffic among virtual machines and to networked storage and compels architects to rework the conventional three-tier network design to achieve a flatter, two-tier architecture. Meanwhile, the falling price of 10-Gbps Ethernet gear and the drive to converge data and storage networks are making data centers ripe for transformation.

Almost one-third of our vendor evaluation respondents have either rearchitected their data center networks in the past year or are in the midst of a new design rollout. An additional 22% are in some stage of network redesign testing or planning, while 20% expect to be there in the next 24 months. Translated, more than 70% of those surveyed will likely have newly designed networks within three years.

While a redesign is a great opportunity for IT to kick the tires, it doesn't mean we want go out on a limb or break the bank. Vendors seeking market differentiation via bleeding-edge features, particularly proprietary, pricey features with long-term road maps, face an uphill battle. This should concern Cisco, Hewlett-Packard, and Juniper, all of whom are pitching proprietary fabrics and could be vulnerable to lower-cost alternatives from vendors, such as Arista, Force10 (now part of Dell), and Extreme, that have jumped to commodity merchant silicon as a means of focusing on price per port and raw performance.

With half of our respondents open to adding or changing vendors and a strong preference for standards and reliability over proprietary features and ultrahigh performance, it's harder than ever for large, established vendors to differentiate themselves and maintain their traditional price premiums and profit margins. We'll be watching how technology evolution, product developments, and market dynamics play out over the next few years. But the time is ripe for network buyers to take a fresh look at their supplier lists.

InformationWeek: Jan. 30, 2012 Issue

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