Cisco battered by large fall in security market

Rivals scoop up customers in Q4

'Nobody fires you if you buy Cisco' it was once said but it seems somebody should tell the corporate security sector which has deserted the giant in droves in late 2009, new figures show.

According to market analyst Canalys, in the fourth quarter of last year Cisco's share of the market for a wide basket of security products, including hardware, software and services, dropped a staggering 22 percent year-on-year.

Woundingly, Cisco was the only major vendor to show falls of any kind, indeed every other leading company in the sector showed healthy gains in a market that grew 3.6 percent. MCafee was up 28.7 percent, Symantec 19.3 percent, Check Point 14.3, and Cisco's upstart rival Juniper Networks saw 32.2 percent.

Other strong gainers included ambitious security appliance specialist, Fortinet, and Japanese vendor Trend Micro.

"It [Cisco] is still the dominant vendor in the appliance market, with a market share of 27.7 percent. But its competitors, such as Juniper, are catching up." said Canalys analyst, Alex Smith.

The security market is currently buoyed by the arrival of Windows 7, and growing interest in cloud computing, virtualisation and services, the analysis suggests.

The report is circumspect about what is ailing the networking giant, but speculatively there are three likely candidates, primarily that it is too expensive compared to its rivals that often price against what it charges. It is also possible that Cisco is lagging in key areas of security innovation - its traditional strength has always been integrating disparate bits of technology rather than forging new ideas - or perhaps the company sometimes has a problem communicating its value.

A timely example of the latter was its hyped launch of a new high-end CRS-3 router a week ago. Despite its impressive stats, describing it as the router that would 'forever change the face of the Internet' invited ridicule. At other times, the company churns out press releases to journalists and analysts that are legendary for their impenetrable and unfashionable fascination with buzz-terms and business jargon.

Cisco's results for Q3 of 2009 were better than Q4, but came after a difficult first two quarters, which makes the year a tough one overall. The company has something to prove in 2010, with the Q1 performance under special scrutiny.

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John E. Dunn

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