A recent survey indicates some organizations aren't satisfied with the cost and value of Cisco's LAN switches, but that will likely have little impact on the industry leader's future.
Infonetics Research recently asked 180 medium-sized and large organizations to rate LAN switch providers. The results suggest that when it comes to bang for the buck, San Jose, Calif.-based Cisco Systems Inc. is starting to falter.
The survey asked organizations in six industry sectors -- education, finance, federal government, healthcare, manufacturing and retail -- to rate their LAN switches and vendors based on a scale of 1 to 7, with 1 being poor and 7 being excellent.
Of the organizations polled, 25% of respondents rated Cisco's pricing a 6 or 7, while 33% said its price-to-performance was also exceptional.
The drop could mean trouble if users feel that Cisco isn't providing the overall value it once did, said Matthias Machowinski, an Infonetics analyst. However, cost alone may not be enough to compel organizations to change vendors, since it may mean replacing a large portion of the network.
"It could have an impact for organizations in which pricing is extremely crucial," Machowinski said. "If those numbers continue to drop, especially on the value scale, some of the more value-conscious customers may defect."
While Cisco continued to retain high marks in other categories in Infonetics' study, "User Plans for LAN Switches: North American Vertical Markets 2005," it was outscored in the price and price-to-performance categories by competitors 3Com Corp., Dell Inc. and Hewlett-Packard Co.'s ProCurve group, Machowinski said.
Dell showed the most noticeable rise, reaching a 38% rating in both categories as compared to last year, when Dell ranked 28% for price and 26% for price-to-performance.
"Last year, Cisco outscored everybody," Machowinski said. "This year, some of the competitors were able to surpass Cisco."
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| Graphic caption: Results of a survey of 180 IT professionals from midsized (100-1,000 employees) and large (more than 1,000 employees) companies. Percentages represent respondents who rated each vendor 6 or 7 on a scale of 1-7 (1 poor, 7 excellent). Source: Infonetics Research.
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That represents a drop from last year, when 31% praised Cisco's cost and 40% gave it a high value score.
Despite the lower scores, Machowinski said it's unlikely that Cisco users would change vendors because of the high cost involved with switching to a new network. Plus, Cisco's overall high rank in the other categories -- such as service and support, technology, financial stability and overall satisfaction -- still makes it an attractive option.
"The big takeaway here is that overall Cisco is doing very well," he said. "But not all organizations have the financial resources to afford Cisco gear."
