The pandemic and the resulting economic recession pose numerous challenges for societies and companies worldwide. For the networking industry, on the other hand, things are not quite as bleak: Technologies such as WiFi, VPN, SD-WAN, video conferencing and collaboration tools have played a decisive role in many companies since the beginning of the corona crisis when it comes to running operations to keep. That should not change in the opening and normalization phase either – on the contrary.
At the same time, the trend towards migrating applications to the public cloud is increasing, so that equipment suppliers can expect less business from the data center networking users in the future. The giants in the area of enterprise networking react to this by diversifying their portfolios, opening up new business areas such as hybrid cloud management or automating network processes.
We have put together the ten key players in the area of enterprise networking for you. We used not only the current market position of the individual companies for this ranking, but also their ability and willingness to adapt new approaches and approaches.
Cisco maintains its leadership position in almost every area of networking hardware. The group has a 51 percent market share in Ethernet switches, and the WLAN market is also largely in the hands of Cisco with 44.6 percent market share. The company also has a 16 percent market share in SD-WAN equipment. At the start of the pandemic, Cisco was able to “lean back”: Not only does one have a widespread VPN solution in its portfolio, but with WebEx it is also the only player in the enterprise networking market that has its own video conference or collaboration solution at the start.
Power moves: With ThousandEyes, Cisco has acquired a leading provider of network and application performance monitoring in hybrid cloud environments. The acquisition should complement each other perfectly with AppDynamics – another specialist for app performance management, which Cisco bought in 2017.
Expressed in numbers: A billion dollars – Cisco allegedly put that much on the table for ThousandEyes. One million per eye, so to speak.
Outlook: Cisco has to cope with two major construction sites: on the one hand, the market for switches is slowly coming to a standstill (according to IDC, this area grew by only 2.3 percent in 2019), on the other hand, the market for routers is no longer a guarantee of growth. The market share that Cisco is losing in these areas primarily benefits emerging competitors such as Arista and Huawei. The corporation’s answer consists of a shift towards software, subscription models and security.
Thanks to high performance switches for enterprise data centers and cloud hyperscalers, Arista has managed to snatch some market share from the market leader Cisco. The rising star is aware that diversification is the be-all and end-all in order to survive on the market in the long term. Arista now offers network monitoring, automation and analytics solutions for hybrid cloud environments and also supports the Open Networking Foundation. The in-house network operating system, EOS, runs on a Linux kernel, and Arista recently announced that its switches will also support Microsoft’s SONiC operating system.
Power moves: With Big Switch, Arista has bought a leading network monitoring and SDN specialist.
Expressed in numbers: Arista gained 18.8 percent of the market for data center switches in the first half of 2019 (according to Crehan Research).
Outlook: Arista is not known for acquisitions. So it will be exciting to see how the company plans to integrate Big Switch software, which also runs on hardware from competitors such as Dell or HPE. Arista does not have a security or SD-WAN division, which could prove to be a weak point in the long run – especially if the market for enterprise data centers continues to stagnate and hyperscalers are turning to white box switches. But the company has growth opportunities in other areas in which it was not particularly strong before, for example when it comes to switches for campus networks or the WLAN area.
Juniper has made several acquisitions over the years, but no acquisition has really helped the company. That could change with the takeover of Mist Systems, an innovative wireless specialist, in 2019. Juniper invested around $ 405 million in this – and is already starting to market products that are based on Mist’s AI capabilities: AI-based virtual assistant Marvis uses natural language processing (NLP) to gain insights into the To grant wifi user experience and also offers support support.
Power moves: Juniper’s goal is to roll out the acquired AI technology across cloud, data center, WiFi and SD-WAN environments.
Expressed in numbers: According to Juniper, 97 percent – the order of magnitude by which the error rate of POS cash register systems for the GAP fashion label has dropped since AI assistant Marvis has been used in around 1,500 shops.
Outlook: Juniper is a leader in the Gartner Magic Quadrant for data center networking, as well as in the current Forrester Wave Report when it comes to SDN hardware for the data center. However, the group still has problems translating technological leadership into sustainable profits. Until now: The areas of WLAN, remote access, SD-WAN, network automation and in-house track and trace systems, which were booming in the wake of the crisis, are likely to give the group a boost thanks to the acquisition of manure.
VMware has a run: At the end of 2019, the Dell subsidiary managed to close two major acquisitions and swallowed Carbon Black (endpoint security) and the Pivotal software (container cloud platform), which is also part of Dell. VMware does not sell switches or routers, but these two areas are becoming increasingly less important due to technologies such as SDN or NFV. Instead, VMware positions itself as a supporter of the companies on the way to the hybrid cloud and has the corresponding management and as-a-service offerings in store. VMware is also considered a leader when it comes to SD-WAN.
Power moves: VMware’s hunger for takeover is hardly to be satisfied: In January 2020, the company announced that it wanted to take over Nyansa – a rapidly growing innovator in the field of AI-based network analysis. In May 2020, the cloud-native security platform Octarine was also bought, and in July 2020, Lastline, a provider of cloud-native threat detection services.
Expressed in numbers: $ 4.8 billion – that’s how much VMware paid for Pivotal ($ 2.7 billion) and Carbon Black ($ 2.1 billion).
Outlook: Despite the rather poor economic outlook, VMware continues on its path, announcing solid earnings of $ 386 million in the first quarter of 2020, with sales of $ 2.73 billion (up 12 percent year-over-year). A result that CEO Pat Gelsinger attributes above all to the crisis-related move of many customers’ employees to their home office. Not so long ago, it looked like VMware was in some kind of data center virtualization hole and was at risk of falling behind its competitors. Instead, the company today presents itself as highly innovative – and also at an internal level, not just driven by acquisitions. VMware only started its Tanzu product and service line in March, which is primarily used to automate the lifecycle of Kubernetes-based applications. The vSphere virtualization portfolio was also extensively renovated.
Extreme Networks has changed dramatically in the face of the trends towards cloud, automation, SD-WAN and IoT: in 2016 the company acquired Zebra Technologies’ WLAN business, in 2017 it took over the network business from Avaya and bought the switching, routing
and analytics Areas of Brocade too. Today, Extreme Networks sales are approaching the billion mark – as the company prepares to compete with the big players in the fields of Wifi 6, cloud-based network management, AI and network automation.
Power moves: In August 2019, Extreme Aerohive Networks, a specialist in cloud-managed WLAN services, AI and machine learning, bought.
Expressed in numbers: $ 272 million – the amount Extreme Networks put on the table for Aerohive.
Outlook: Gartner sees Extreme Networks in the area of WLAN infrastructure on par with the “leaders” Cisco and the HPE subsidiary Aruba. However, the company must now merge the acquisitions into a seamless platform and continue to cloudify its portfolio.
Nvidia has both the technological skills and the financial resources to disruptively stir up the networking industry. The new open source focus makes a decisive contribution. Gone are the days when you could dismiss the company as a graphics card manufacturer for the gaming sector: In 2019, Nvidia generated almost a billion dollars in sales in the enterprise sector and the hyperscaler cloud business. The company also acquired both InfiniBand and Mellanox and is planning another acquisition with Cumulus Networks. Nvidia is now able to cover the entire range of enterprise data center networking – including high performance workloads and AI.
Power moves: In April 2020, Nvidia completed the acquisition of the Ethernet switch manufacturer Mellanox, and in early May the company announced its plans to purchase the switch manufacturer Cumulus.
Expressed in numbers: $ 6.9 billion – Nvidia invested this amount in the purchase of Mellanox.
Outlook: In the early days of Linux, it was companies like Suse and Red Hat that really got the project rolling. When it comes to open networking, Cumulus (according to Gartners Magic Quadrant) is considered a similarly visionary company. Challenges arise for Nvidia in two areas in particular: First, the delivery of a fully integrated stack is something completely different than offering the components individually. Second, the use of open source switches in productive environments is still a quantum leap for many companies.
When Hewlett-Packard was about to split two years ago, the company bought the leading wireless provider Aruba for $ 3 billion. Back then, many were wondering where this move should lead to – now it can be said that it was a pretty good move. This is also because Aruba was not simply incorporated into the company, but integrated its own HP networking team in Aruba. The result speaks for itself: Aruba has further consolidated its position as Cisco’s main competitor in the WLAN sector.
Power moves: Aruba recently announced its Edge Services Platform, a new cloud-based AI platform designed to relieve IT from repetitive network management tasks.
Expressed in numbers: 65,000 – so many unique customers use Aruba Central, a platform that brings together network management for LAN, WLAN, WAN, 5G and edge computing.
Outlook: The pandemic has not left Aruba unscathed, but the company is in a good position to benefit from the increasing remote working trend, but also from the technology trends edge computing and IoT. In both cases, data must be transmitted via WLAN and LAN infrastructure.
In addition to PCs, servers, storage and network solutions, Dell is also able to support its customers in all IT infrastructure matters. Whether it’s data center modernization, hybrid cloud migration, advanced data analytics or VDI deployment – Dell has the answer. The group successfully integrated the storage assets of its EMC acquisition. Combined with VMware’s hybrid cloud management and NFV capabilities (Dell has an 86.6 percent majority stake), this led to 2019 sales of $ 92 billion.
Power moves: The example of Dell shows that less can sometimes be more in the corporate environment. Dell has slimmed down its product portfolio by repelling the security provider RSA (part of the EMC deal).
Expressed in numbers: An investment consortium turned over two billion dollars for security specialist RSA. The deal includes both the RSA product line and the conference event of the same name.
Outlook: Dell can rightfully call itself the market leader in the areas of storage, servers, cloud management, virtualization, SD-WAN and Hyper Converged Infrastructure (HCI). The challenge for the Group in the future will be to help its customers link all of these points together. In a first step, the company announced the PowerOne initiative, which brings together various components in the PowerOne Fabric – including an automated management function.
The growth market for HCI is characterized by a race between Dell (34 percent market share) and Nutanix (13 percent). According to IDC, this market grew 8.3 percent year over year in the first quarter of 2020. In the long run, this development is likely to seal the fate of the data center hardware market: While companies were preoccupied with migrating resources to the cloud before the pandemic, the crisis intensified this development. For Nutanix, that shouldn’t be a bad prospect, after all, the company is undergoing a strategic shift: from hardware to software and from on-premises to the cloud.
Power moves: Nutanix further expanded its desktop-as-a-service offering, which was in high demand in the wake of the corona crisis.
Expressed in numbers: 15,000 – the number of all Nutanix customers worldwide.
Outlook: The Nutanix growth plan is based on the broadening of the product portfolio. Or as Gartner puts it: “Over the past two years, Nutanix has transformed from a provider of HCI systems, appliances and data services to a broadly based software and cloud services company.” Another goal of Nutanix in the future should be to support companies in the management of remote workers and to help with data center modernization projects and application management challenges.
Huawei has been hit hard by the political power struggle between China and the United States. A U.S. law planned for August would prohibit U.S. companies that do business with the government from using Huawei technologies anywhere in their global supply chains. In practice, this would ensure that every supply chain partner who uses Huawei technology would also have to be sorted out and would have serious consequences.
Power moves: Huawei CEO Ren Zhenfei unequivocally announced to the board in February: “The company has entered a state of war.”
Expressed in numbers: According to IDC, Huawei had 9.6 percent market share in the area of Ethernet switches and 29.8 percent in the area of enterprise and service provider routers.
Outlook: On May 15, the U.S. Department of Commerce banned U.S. chip makers from working with Huawei. New Street Research describes the current situation for the Chinese network supplier as follows: “As it currently looks, Huawei still has twelve months to live. Without leading edge chips, the company cannot sell competitive network equipment and there are off-limits of US technologies hardly any alternatives on the semiconductor market. ” In the meantime, however, this ban has been lifted from the table again – but it should remain exciting. (fm)
This article is based on an article from our US sister publication Network World.