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Channel Best-Sellers: Networking That Pays Off

SMB wireless networking kingpin Linksys and its parent Cisco Systems continued to dominate the SMB wireless networking market, according to data from the NPD Group/Distributor Track for the six-month period ending June 2007.

SMB Wireless Networking

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wireless networking SMB wireless networking

D-Link Systems, which ended 2006 with a 7.7 percent share, showed the highest growth for the six-month period, posting a 1.9 increase in share to 8.22 percent.

Linksys finished the period from January to June 2007 with a 1.29 increase in share to 40 percent, while parent Cisco's share stayed relatively flat, dropping 0.73 percent to 20.81 for the same period.

Rounding out the top-five pack were Netgear, which dropped 3.4 to 13.52 and Trendware, which closed out the June 2007 period with a 1.83 percent share.

Pat Walsh, president of Computer Station of Orlando, headquartered in Longwood, Fla., said the majority of the SMB wireless networking business he does is with Linksys because of the company's superior reseller problem resolution compared with the likes of D-Link and Belkin. "If you have a problem and try to get it resolved with D-Link or Belkin, you might as well be knocking your head against the wall. Then you are stuck. And time is money," Walsh said.

Jeffrey Goldberg, president of Washington Computer Services, a Brooklyn, N.Y.-based solution provider, gives D-Link credit for a sturdy, reliable product offering at an economical price. "I can't ever remember a D-Link product as being defective or breaking," he said. "We have never had a negative experience with their hardware."

-- Steven Burke

Enterprise Wireless Networking

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Nortel Networks is continuing to close the gap against Cisco Systems in enterprise wireless networking, according to data from the NPD Group/Distributor Track for the six-month period ended June 2007.

Nortel had the highest growth among the five top sellers of enterprise wireless networking products through distribution, according to data for January to June 2007 compared with the year-ago period. Nortel posted a 9.6 percent increase in market share to 22.87 percent. In contrast, Cisco, whose market share stood at 74.2 percent at the end of 2006, dropped 14.6 points to 54.78 percent.

Stuart Chandler, president and CEO of Optivor Technologies, a Nortel Elite Advantage partner in Ellicott City, Md., said he is seeing market-share gains for Nortel in both federal and commercial markets. He said Nortel is light years ahead of Cisco in both converged voice/data networks and unified communications.

"The joint development with Microsoft and the whole innovative communications alliance that has come out of that is compelling customers to move forward with a Nortel-Microsoft strategy," Chandler said.

Optivor is benefiting from the Nortel market-share gains, Chandler said, adding that Optivor has grown 1,012 percent over the past five years and is one of only 22 Nortel Elite Advantage partners in North America.

According to Chandler, Nortel's voice network legacy has given the company a huge competitive advantage when going head to head against Cisco. "When voice communication really counts, Cisco is nowhere to be found," he said. "Nortel has been doing [voice networking] for 111 years. Cisco has been doing it for 11. Most large call centers rely on Nortel."

-- Steven Burke

SMB Routers

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Cisco Systems' recent channel push into the low end of the market is paying dividends as the vendor dominated sales of SMB routers through distribution and posted the highest rate of growth compared to its rivals.

For the first half of 2007, Cisco came out as the best-selling vendor for routers sold through distribution that are priced below $1,500 with a 49.2-percent share, according to data from the NPD Group/Distributor Track. Cisco's shadow over its rivals in the space becomes even darker when its market position is combined with its Linksys division, which finished in the No. 2 spot with 25.8 percent, giving the vendor a combined share of 75 percent. Netgear placed third with 10.2 percent, followed by D-Link Systems at 3.6 percent and Adtran at 2.7 percent.

Cisco also topped its rivals by turning in market share growth of 8.6 for the first half of 2007 compared to the same period a year ago, the highest among the top five networking vendors charted in the category.

"Cisco's routers are versatile and can be adapted to do many things, including running [VoIP]," said Chris Wilson, president of Sidium Solutions in Stevens, Pa., of the vendor's Integrated Services Router family. "We can sell a barebones router all the way up to one with a voice bundle on it."

Cisco in recent months has upped its channel focus on the SMB market with a new certification specifically aimed at solution providers selling into smaller customers. The new Select certification opens new tools, support and financial incentives to SMB-focused partners.

In addition to the channel push, Cisco has been aggressively pursuing the market with attractively priced products and its ever-present marketing dominance, said Jeffrey Goldberg, president of Washington Computer Services, a solution provider in New York.

"Cisco has an overwhelming marketing advantage over everyone else," Goldberg said. "Cisco is accepted by a large part of the SMB space as the most desirable manufacturer to have at the edge of the network, so if there is an opportunity to get the equipment at an acceptable price, many people will select Cisco instead of one of its competitors."

-- Jennifer Hagendorf Follett

Enterprise Routers

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Cisco Systems continued to dominate the enterprise router market capturing 92 percent market share for routers priced above $1,500, according to data from the NPD Group/Distributor Track for the six-month period ending June 2007.

IBM, which finished fourth, achieved the highest growth rate for the period, albeit from a small base. IBM's share was up 0.35 percent to 0.56 percent.

Overall, Cisco's share declined 2.31 percent from the comparable 2006 period when it captured an amazing 94.07 percent of the enterprise router sales through the channel, according to the NPD Group/Distributor Track.

The closest competitor was Nortel Networks which finished the six-month 2007 period with an 0.3 percent increase in share to 1.74. Hewlett-Packard finished third with an 0.8 percent decline in share to 1.62 percent.

Adtran closed out the pack of the top five with a 0 percent increase in share to 0.25 percent.

Phil Mogavero, president and CEO of Data Systems Worldwide, a Woodland Hills, Calif., Cisco partner, said Cisco remains the "gold standard" for all things networking.

"Cisco has recognized that applications drive the value of a network and [has invested] in unified communications, video surveillance and a full suite of offerings to drive up the value of the network," said Mogavero. What separates Cisco from Nortel, IBM and all others is Cisco "provides a complete solution," he said.

Mogavero expects Data Systems Worldwide's Cisco business to be up 40 percent this year. He said Data Systems Worldwide has invested heavily in unified communications and video surveillance. The Data Systems intelligent facilities solutions practice, which brings together unified communications and video surveillance, is being well received in the hospitality and real estate vertical markets.

As for IBM, the company's increased share in the enterprise router market is a sign of the computer giant's technology prowess, said Jay Tipton, vice president, Technology Specialists, a Fort Wayne, Ind., IBM partner.

-- Steven Burke

Document Scanners

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In the Document Scanners category for CMP Channel Best-Sellers Survey, there is Fujitsu. And then there's everyone else. Again.

According to data from the NPD Group/Distributor Track, Fujitsu garnered 36.2 percent of market share for the six-month period ended June 2007. It was a modest 1 percent increase compared to the year-ago data of 35.2 percent share, but it was more than its next two closest competitors combined.

Canon (16.5 percent), Hewlett-Packard (14.7 percent), Visioneer (6 percent) and Kodak 4.8 percent) rounded out the top five, with Canon and Visioneer showing slight market share gains at the expense of HP and Kodak. All told, the top five companies combined for 78.2 percent of the market.

Fujitsu's control of the market did not surprise Mike Murray, account executive at Atech Group, an Albany, N.Y.-based solution provider.

"They have the performance, reliability. They also really get behind it. We're in touch on a constant basis with their channel team. That communication, awareness really helps a lot. I don't feel that from other vendors in that particular offering," Murray said. Last April, Fujitsu rolled out the fi-6000NS, a small-footprint network scanner for workgroups, and offered front- and back-end financial incentives for VARs, which may have contributed to its success this year.

The fi-6000NS connects directly to a network, enabling VARs to integrate it with archiving solutions. The device also creates searchable PDF files, adding efficiency in data warehousing.

"We've had lots of luck with [Fujitsu scanners]. ... Good price, good quality and they integrate well with the rest of the network," said Tommy Wald, president and CEO of Riata Technologies, Austin, Texas.

-- Scott Campbell

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