Ethernet equipment

Cisco Pushes Back on Switching

LAS VEGAS -- Cisco Live 2011 -- Cisco announced a major upgrade to its flagship Catalyst 6500 switches Tuesday.

The key element is the new Supervisor Engine 2T module, which Cisco says triples the performance of the chassis. Other new modules add 40Gbit/s Ethernet capability and more dense 10Gbit/s Ethernet, up to eight ports of the latter per slot, without oversubscription.

Cisco is also adding a fleet of new cards for various services. Some that got highlighted briefly during a Tuesday-morning press conference included a firewall (now running at 24 Gbit/s) and wireless LAN management (now able to control 500 access points and 10,000 client devices.)

The hardware is the easiest part to talk about, but Cisco updated a lot of software as well -- more than 200 features, Cisco officials said. In video, for instance, Cisco says the 6500 can now handle 256,000 multicast routes, compared with 15,000 for the nearest competitor.

Cisco has been put on the defensive as competitors have capitalized on the transition to the cloud, and the 6500 is its only switching platform to not get a major upgrade in the last 24 months. Other companies have access to cutting-edge Ethernet switching chips, dulling any edge Cisco has had. And some, HP in particular, have aggressively dragged down prices.

Cisco Senior VP John McCool said the company's market share in switching has been steady at about 70 percent for years, and its market share in modular switching (the Catalyst 6500's area) was 77 percent at the end of the first quarter of 2011, the same as it was two years earlier.

Moreover, the 6500 generally carries better margins than the newer Nexus line, and shrinking margins have been a big concern of investors. Even though the platform is aging, it's important for Cisco to keep it humming.

That's part of the typical big-company challenge: the need to feed the installed base. In announcing the 6500 refresh, Cisco emphasized that all the new boards will work with the 700,000 Catalyst 6500s that have been installed.

Even within Cisco, people keep asking when the Nexus will displace the Catalyst 6500, said McCool. His answer to that is that the Catalyst and Nexus are headed in different directions.

"We see the market bifurcating into a campus-based market that needs rich services and deep services, and a high-connectivity data center market," he said. The Catalyst line would apparently target the former, with Nexus targeting the latter.

— Craig Matsumoto, West Coast Editor, Light Reading

Pete Baldwin 12/5/2012 | 4:59:34 PM
re: Cisco Pushes Back on Switching

Nice timing - Here's an HP release from yesterday, bragging about HP's gain in market share (per Dell'Oro Group):


"...Specifically, the report reveals that HP gained 2.5 percentage points worldwide for layer 2/layer 3 Ethernet switching revenue market share in the first quarter of 2011. Cisco’s share fell 5.8 points in the same period."

I'm pretty sure McCool recently made comments to the effect that Cisco hasn't lost in *port* share, as opposed to revenue share.  In other words, people are buying the stuff cheaper, which we already knew.

John Chambers's keynote included some market share stats, also from Dell"oro. They had Cisco's market share by revenues at 69.5% in 1Q'11, down from 4Q'10 (didn't note how much) and down from a local peak at 75.2% in 1Q'10.

Port share was 50.4% in 1Q'11, down from 50.9% in 4Q'10 but up overall since the start of 2009, if I read it right.

non_linear 12/5/2012 | 4:59:34 PM
re: Cisco Pushes Back on Switching

Hi Craig - I just looked at the Dell'Oro data.  In addition to the data in the release you've got linked below, HP has gained 3.7 pts of modular switching port share YoY as of Q1 2011. 

Disclaimer: I recently joined HP's networking business, but I was previously employed by Cisco.

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