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"Long term, Cisco has done a fairly good job," said Weckel. "Looking forward, the market is changing quickly in areas that Cisco is strong in and areas that Cisco is not quite as dominant in. The data center favors Cisco and the emerging markets don't favor Cisco."
Rob Soderbery, senior vice president and general manager of Cisco's Unified Access Business unit, said there is a "misconception" that Cisco is losing networking market share. "Historically, Cisco has maintained port market share of 50 percent and revenue market share at a 70 percent level," he said. "That is a multi-year trend. There is a lot of talk about what competitors are doing or not doing. But if you look at the last eight or nine quarters, it may wiggle a bit, but fundamentally, Cisco has held serve at 50 percent port share and 70 percent revenue market share."
Cisco, in fact, is doubling down on its investment in partners as it sharpens its focus on its core network switching/routing business. Rob Lloyd, executive vice president, worldwide operations at Cisco, told CRN in an exclusive interview earlier this month that the company is stepping up its investment in the channel with the rollout of a simplified partner-led sales model aimed at enabling the networking leader to respond more quickly in the sales trenches to fend off competitors.
HP networking market share gains are inevitable given the dominant market share position of Cisco and the astronomical resources HP with $120 billion in sales, three times the size of Cisco, is bringing to bear in the networking market, said Bob Venero, CEO of Future Tech, a Holbrook, New York solution provider.
"HP is making a run at Cisco," he said. "They are going to take some market share. When you have the marketing engine of HP, the number of partners HP has and the dollars and cents HP is throwing at this market, you are going to take some share. Is HP going to take 50 percent market share? That's highly unlikely given the installed base that Cisco has in this market."
At Future Tech itself, HP is winning about 5 percent market share, primarily in small businesses looking to avoid Cisco's annual SmartNet maintenance fee, said Venero. "In an economy where people are trying to squeeze every dollar out of their organization, Cisco's SmartNet maintenance is a reoccurring bill that you avoid if you buy HP Networking," he said.
Ultimately, the networking war between HP and Cisco will benefit customers and partners, said Venero. "When you have two organizations looking for share, what happens is they get more competitive and reduce prices," he said. "Both customers and partners can take advantage of the competition between the two organizations."
One challenge both companies face equally, said Venero, is the channel conflict that inevitably takes place in the sales trenches. "You are going to fight HP direct and you are going to fight Cisco direct in some cases," he said. "There are always going to be those challenges."