In most markets, networking channel partners can't go wrong with Cisco Systems. The vendor is the undisputed leader in so many markets, from switches and wireless access points to network security products. When it comes to WAN optimization, however, VARs should look at the competition on the market. There is plenty of it.
Earlier this summer, Gartner's ballyhooed Magic Quadrant for WAN optimization controllers listed Cisco in the challenge position, unfamiliar territory for Cisco in just about any other Magic Quadrant in which it
Juniper Networks, a $3.57 billion company with strong portfolios of switching, routing and security products, is also struggling to compete, designated by Gartner as just a niche player.
Instead, the leaders in the WAN optimization market, according to the Magic Quadrant, are three independent companies that specialize in the technology: Riverbed Technology, Blue Coat Systems and Expand Networks. Riverbed and Blue Coat each hold about a 20% market share. Expand has a smaller share, but Gartner thinks highly enough of its technology to rank the vendor higher than Cisco, which also has about 20% of the market. These independent companies are doing well enough to make strategic acquisitions of other companies. For instance, Blue Coat bought Packeteer for $268 million in April 2008. In February, Riverbed picked up Mazu Networks for $25 million.
Channel partners can point to acquisitions like those and tout the companies' strategic visions, network visibility and packet-shaping technologies.
Much of Cisco's revenue in the market is due to its installed base. Cisco has enjoyed success in the market by piggybacking its wide area application services (WAAS) on its dominant Integrated Services Router (ISR) platform. So although Gartner and other analysts aren't so sanguine about its technology in comparison with some of the independent vendors, Cisco is certainly a competitor.
"When you talk with vendors about their competition, Juniper's often mentioned, but more often you'll see Cisco, Riverbed and Blue Coat," Matthias Machowinski, directing analyst at Infonetics, told SearchEnterpriseWAN.com recently . "Juniper's been in that [fourth place] position for a pretty long time now, and ... certainly, if you do the math, their market share increased for them, but it's still a small piece."
Meanwhile Cisco's market share has slumped in 2009. Machowinksi speculated that Cisco's tight integration of WAAS with its ISR and other networking offerings might have unduly hurt the former market leader's sales as an overall slowdown of IT spending dragged down investments in the expensive hardware that Cisco usually bundles with WAAS. Blue Coat and Riverbed were able to offer their products as relatively cheaper standalone appliances that offer a quick return on investment by cutting costs through reduced bandwidth and improved efficiency.
"Riverbed has the advantage of being a company that has only specialized in WAN optimization," said Jimmy Norton, system engineer with ModComp Systems and Solutions, a channel partner of Cisco, Expand, Juniper and Riverbed. "Their sales team has one job. With Cisco Systems, they have to do routing, switching, firewalls, etc. When you're not an expert in one thing, a customer can ask you a question that might trip you up, whereas the Riverbed salesman is in and out."
Norton said Riverbed's and other independent vendors' products are also easier to install, given that vendors like Juniper and Cisco try to sell their WAN optimization products as components of a larger infrastructure solution.
"Think about it. Businesses love it [Riverbed] because it takes 10 minutes a box, and say you've got 20 offices, that's only two hours over the weekend -- that's powerful," Norton said. "A Riverbed employee can go into a meeting and say, 'Take a look at Gartner and Forrester, our stock prices.' And they can sell themselves as a company. Their name speaks for itself."