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A "Big Three" in networking? Cisco, HP and... IBM?

Can you imagine a world where Cisco Systems wasn’t THE networking vendor… a world where Cisco shares top dog status with two other companies with the products, resources and support capabilities to compete on equal ground with the longtime industry leader?

Cisco has been top dog in the enterprise networking market for quite a number of years. You can attribute its dominance to a variety of factors. It generally produces good, reliable technology that its customers are comfortable with.  It generates tens of billions of dollars in annual revenue and is highly profitable, which means customers can rest assured that Cisco will be around for the long haul to support and advance its products.

Cisco also tends to stay ahead of the networking industry’s innovation cycle. It has the resources available to drop $1 billion on research and development for a new product line such as its Nexus data center switches. And where it doesn’t lead in innovation, it can pick up a competitor like the wireless LAN vendor  Aironet Wireless Communications.

No other vendor in the networking market has the ability to do all these things, at least in the North American market. There was a time, 10 years ago when companies like Nortel and 3Com seemed poised to bring Cisco down a notch, but neither company executed when they had the opportunity. Nortel collapsed and 3Com retreated.

For much of the last decade, most of Cisco’s competitor’s in the enterprise networking market have been spunky upstarts (Force10, Extreme, Enterasys, etc.) rather than multi-billion dollar industry giants.

Things are changing. HP, which has competed for years on the low-end of the networking industry with its ProCurve brand, acquired 3Com earlier this year. The deal was struck shortly after 3Com reinvented itself with its H3C brand of Chinese-developed high-performance networking products.  3Com was showing some promise with its new products, but at the time of the HP acquisition it had not yet succeeded in establishing a foothold in the market outside of Asia. Given its overall status as a gigantic, profitable IT vendor, HP now has the opportunity to compete with Cisco as a peer in the networking market… if it can executive its 3Com acquisition and convince Cisco customers to consider alternative vendors in critical parts of their networks.

Now we have indications that IBM is leaning toward a return to the networking industry. IBM made news today with its plans to buy Blade Network Technologies, a start-up which specializes in top-of-rack and blade chassis data center switches. It produces switches for both IBM and HP’s blade server chassis lines and it has a close relationship with Juniper Networks, itself an up-and-coming networking vendor which has a venture capital stake in Blade.

You may recall that in December IDC’s chief analyst Frank Gens predicted that IBM would buy Juniper in 2010. This Blade Network Systems acquisition would appear to bring Juniper and IBM closer together than ever before. If Gens’ prediction of an IBM-Juniper marriage comes to pass, networking pros will suddenly find themselves in a position they’ve never been in before: A world where three of the world’s largest technology vendors all have well-regarded portfolios of enterprise networking products. Cisco, IBM and HP.

There’s an old adage in the industry that no one ever got fired for buying IBM. In recent years the term has been adapted by Cisco customers, many of who say “No one ever gets fired for buying Cisco.” Could networking pros soon find themselves saying: “No one ever got fired for buying switches from IBM, HP or Cisco?”

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