Voice & Data Networking: Cisco's Tops Once More

Networking-gear vendor Cisco Systems made a definitive statement in the voice and data networking category this year, grabbing top scores in the areas of product innovation, support and partnership, proving that the world's largest manufacturer of networking gear is still No. 1 in the eyes of its solution-provider partners.

Report Card Score

Overall, Cisco managed a score of 77, putting it five points ahead of runner-up 3Com and six points ahead of the category average of 71. It took first place in three out of four subcategories and in every criteria except two: a third-place showing in the overall revenue/profit potential criteria and a tie in third place with Avaya in channel conflict.

The win marks the third ARC victory in a row for Cisco since overthrowing former champion 3Com in 2000 and is an impressive feat for the company. It's especially important because Cisco has struggled somewhat during the past year, both with the overall economy's effect on its business and with problems and discontent among its channel partners. For one, a number of partners have voiced concerns about the company's specialization movement, saying it makes doing business with Cisco too difficult and costly. And even more complained earlier this year about unfair competition from telecommunications companies that were dumping Cisco's products below resellers' costs. Cisco CEO John Chambers took the latter issue head-on, promising to eliminate unfair competition and improve conditions for his partners. By the looks of this year's ARC scores, VARs think he's doing a pretty good job.

"The last year has been a wild ride, no doubt," says Paul Mountford, Cisco's vice president of worldwide channels. "We put a lot of hard work into our partners and we think we made the right decisions and did things that are really going to help them."

Then there's Avaya, which represents the other side of the spectrum. Out of the four vendors competing in voice and data networking, Avaya fared the worst, receiving only a 66 in the overall category, a full 11 points behind Cisco and five points off the overall average. The performance of Avaya, which managed to hold onto second place for the past two years, is a surprise, considering the company copped first place in the loyalty subcategory, scoring an impressive 87,the highest loyalty rating in the entire ARC. Looking at other subcategories, Avaya came in last in support and partnership and last also in product innovation and didn't place first or second in any of the individual criteria.

Second place went to 3Com, which made big gains since settling for disappointing fourth-place finishes in the past two ARC surveys. The former ARC champion (in 1999) took second place in the subcategories for support and partnership, tied for second place with Nortel Networks in the product innovation subcategory and also managed to take first place in two specific criteria: overall revenue/profit potential and channel conflict. While 3Com has undergone a major restructuring to cut costs, a good part of its newfound ARC success has to do with a strategy started earlier this year to target the enterprise market with new switching products and an improved voice-over-IP offering. As part of the enterprise push, the company says new programs are on the way, which it hopes will get more partners and customers to switch to 3Com equipment.

Meanwhile, Nortel Networks was unable to generate the same kind of buzz 3Com has among its partners in 2002. For the second year in a row, the company placed third overall, with a score of 68. Aside from tying with 3Com for second place in product innovation, the company had to settle for third-place finishes in the other two subcategories: support and partnership. That was the good news. The bad news is that solution providers gave it the lowest loyalty score out of the group,a 74, compared with the subcategory average of 80. Another weak spot for Nortel: its solution-provider program, which also ranked dead last among the four competitors. Clearly, the company has some ground to cover before next year's ARC. n