10 main events of the network market in 2012

The most part of discussions of the network market in 2012 rotated around programmable network infrastructure (software-defined networking, SDN): what is it, what technologies are involved in it whether the channel is necessary for promotion of SDN, and whether it threatens "old guard" of network vendors, Cisco and HP?

The subject will become even more interesting in 2013 as SDN leaves walls of laboratories, moving to the plane of discussion of practical aspects. But SDN not the only subject occupying minds in 2012; there were enough news concerning Juniper, Huawei, Microsoft and, of course, Cisco which took for this year much the best shape.

There are main events which affected the network market in 2012.

10. Juniper slides down

What happened to Juniper in 2012? The company entered in 2012, already experiencing difficulties: partners were tired of technical issues with a line of gateways of security of SRX against the background of decrease in profit and big uncertainty in general. For the end of 2012 the company is still unhealthy: it dismisses more than 500 people, causes discontent on Wall Street, its portfolio of convergent solutions for DPCs, QFabric, badly is on sale, it is restricted from all directions by other players in security, both old, and new. The company is still too subject to specific features of cycles of purchase of service providers, and the best heads and engineers leave it.

The general manager of Cisco John Chambers told CRN in October that he never before saw Juniper so vulnerable and though this note was heard from the main competitor of the company, it is difficult not to agree with his opinion.

9. ShoreTel purchased M5 Networks

In 2012 there were many much larger purchases, but not all of them meant very much to future direction of development VoIP/UC as purchase of M5 Networks, one of the leading players in the market of a hosting of VoIP which was made by ShoreTel. After this ShoreTel began thin process of integration of cloud services into the offer renamed now into ShoreTel Sky, trying not to upset at the same time neither the own channel, nor partners of M5.

At the price of 146 mln. dollars of ShoreTel spent the most part of the cash for M5, and the spot on reputation because of failure of ShoreTel Sky during Hurricane Sandy was absolutely inopportunely. But if ShoreTel undertakes a cloud hosting correctly, then will find out that the available market quickly extends against the background of its weak sales in the market of VoIP and UC where considerable shifts in a share of vendors are rare.

"There are no reasons why ShoreTel could not be the large player, - John Arnold, the top analyst of J. Arnold & Associates company considers. - If a year later they do not get profit, then there will be serious questions that they with it made. But they won round the channel and they have a plan how to offer this portfolio of cloud services to the base of customers".

8. Important changes in BLVS

2012 there was an important year in the market of BLVS with arrival of commercial strategy on the basis of standard 802.11a/c which gradually will force out standard 802.11n in the years ahead. Network vendors began to build uniform strategy for wired and wireless networks, and even Gartner reacted to this trend, having integrated the separate charts Magic Quadrant for a corporate LAN and corporate BLVS in one.

The market with interest met Miracast, the standard of peer-to-peer networks which received blessing from Wi-Fi Alliance and already began to acquire products. There were good news from Aruba Networks whose partnership with Var'ami becomes closer. There was not too successful, but nevertheless a significant incorporating Ruckus Wireless behind which there is also a strong channel. And quite recently Cisco made megapurchase, having laid out 1.2 bln. dollars for Meraki with plans to powerfully attack an average segment with the network devices managed through a cloud.

7. F5 and Riverbed: fight for performance

Transition to programmable network infrastructure and the virtualized convergent DPCs emphasizes invariable importance of applications of customers; it includes all - from readiness level to smoothness and speed of the user interface. The vendors focused on performance of DPCs such as leader of networks of delivery of applications (ADN) of F5 Networks and leader of optimization of WAN Riverbed succeeded in these aspects.

For F5 and Riverbed 2012 there was a successful year, but it is even more important as the sight of each of these companies became principal direction of the market and as both aim to be beyond the specialization: F5 - in IT security and development to order, and Riverbed - in delivery of applications, optimization of web content and cloud data storage.

Now, when Cisco decided to leave a segment of balancing of loading, it will become an important issue. Riverbed moves ahead further and further in a segment of ADN where F5 dominates, and F5 pushes aside players in cybersecurity, and it is necessary to expect that these two companies will face more and more foreheads, especially the general growth in a segment of optimization of WAN and deceleration of ADN in the last quarters.

6. Huawei got stuck

In 2011 there were talks how Huawei undermines business of network vendors in North America. But after the moderate approach of Huawei in the corporate channel including input of the corporate program in October, 2011 and agreements with Synnex and other distributors for 2012, its further progress is not clear. Rob Claus, the chief of Huawei channel in the USA, said that Huawei advances the plans of a scope of the channel in the region. But nevertheless, the company only at the beginning of a way, and not all VAR'Y joyfully opened it the doors, even still before in October there was a menacing report of Committee on investigation of the House of Representatives of the U. S. Congress which announced the company "threat of national security".

So far profit and gross margin of the company decrease, and heads in the USA John Rose and Matt Bross famous to the channel left its walls.

5. It is time to earn from BYOD

If in 2011 vendors only spoke about the strategy of BYOD much ("bring personal mobile devices"), then in 2012 they began to earn from this trend. Though anybody has no doubts that the trend will grow further, the conversation in the industry was displaced on practical difficulties in this case. In the research Blue Coat in November the opinion was expressed that most the organizations do not understand all advantages of use of mobile devices because of unavailability of IT administrators yet. Meanwhile, Ovum company which researches the telecommunication market expressed opinion recently that BYOD can have cultural effects.

"The personnel on emerging markets with high growth show more flexible relation to working time: they are ready to use own mobile devices. However in mature economies employees got used to more comfortable standards of behavior at work; separation of working time and their private life is valuable to them, - Ovum writes. - This difference in behavior creates not only future forms of corporate mobile strategy in the markets of high growth, other than mature markets, but also dictates what markets will be most of all benefited, in structural terms, from this revolution".

4. Growing recognition of Lync

When Microsoft entered on the market of VoIP in 2007, the chairman of the board Bill Gates proclaimed that "transition to communication on the basis of software will be so radical, as transition from the typewriter to word-processors".

Five years later and having overcome certain obstacles, the Lync platform which was further development of OCS when started in November, 2010, became one of the most important new directions of business of Microsoft - growing so quickly that Cisco considers Microsoft now, but not Avaya, the most dangerous rival in the market of UC.

In July Microsoft announced that income of Lync grew by 45% in comparison with 2011, and analysts of all firms consider Lync as the potential benefit for Microsoft in business market. Even VAR'Y selling the products UC from Cisco and Avaya say that they are forced to keep Lync in store - or risk to lose customers who want to go with Microsoft.

3. VMware purchased Nicira

Most of observers consider this step (and other purchases connected with SDN, in particular, the transaction of Brocade-Vyatta) not only as the sign of the growing influence of SDN in the market, but also as a presage of many other such purchases and merges.

But also it in itself impresses, considering 1.2 bln. dollars which are laid out by VMware (which, by hearsay, bypassed Cisco which was also dreaming of this purchase). Having received technology Nicira, VMware becomes the potential competitor of many vendors of network equipment and infrastructure whom she considers the allies. Among them and Cisco which is a close strategic partner of VMware and EMC in the market of convergent infrastructure. (We will remind that EMC holds a controlling stake of VMware, but disperses from both vendors more and more.)

2. Cisco revival

In 2011, in the middle of global corporate restructuring of Cisco many observers of the industry said that it is time for the general manager John Chambers in resignation, and guessed whether really the leader of the network market moves to the decline. However having entered new, 2013 f. which began on August 1 Cisco looked quite vigorous, especially in comparison with what there passed her competitors HP, Juniper and Huawei in 2012 through.

Chambers considers Cisco positions 2012 - solid profit, huge growth in DPCs and again taken sight on the trunk business instead of 30-50 of "adjacent areas" - as confirmation of correctness of a rate. Now, when it is officially announced future abdication of the CEO, Chambers safely says to partners that the rate which they made on the company is right especially as other vendors of the first echelon - HP, Dell and Oracle - announce decrease in profit and lose clarity of the strategy in the channel.

"Being a partner of Cisco, you work with the company which does not lose, - Chambers said in an exclusive interview of CRN. - When we need to recreate ourselves, we do it".

1. SDN is the focus of attention

Somehow suddenly it turned out that each large network vendor has the strategy of SDN or programmable infrastructure of DPCs, and this subject became main in 2012.

Pillars of the network market there is Cisco, HP, Alcatel-Lucent, Juniper and others - hurried to formulate the strategy in SDN. Someone made big breakthrough forward, others got stuck on marketing so far. On this background startups in SDN - from well-known Big Switch Networks and Embrane to new names, such as Midokura and Plexxi - became important players of the market.

Some most attractive players, in particular Nicira, became subject to purchase. Others, such as ADARA Networks, play the game, but actively build strategy in the channel. Among all this activity the subject SDN drew attention of observers of the industry, venture capitalists and Var'ov, and the technology leaves walls of laboratories: the center of gravity is transferred to practical aspects and as it can be sold to customers.

"So far it is only the first steps for the technology and those who intend to head this transition, - Gary Alegzander, the president and the general manager of Alexander Open Systems VAR company says. - But there are no doubts that it enters the market".

Source: Chad Berndtson, CRN/USA