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Dell challenges Cisco

Research firm CIR claims that Dell could snatch market share away from leader Cisco in the huge Ethernet switch business.

CIR, a US-based market research and consulting firm, has released a report on the global Ethernet switching market, which projects that Dell could emerge as a key challenger to Cisco in the low-end switch segment.

The firm added spice to the announcement by claiming that the Ethernet switch market will exceed US$15.1 billion in 2008.

The report claims that Cisco has maintained a very high overall market share because competitors have focused on high-speed, high-capacity networks.

This has left the low-end of the market largely to Cisco, which is significant as it provides approximately 40% of Cisco's Ethernet sales, according to the report.

Cisco dominates in this segment with products such as the Cat 2950 and stackables like the 3500.

The report claims that Cisco’s success relies less on technology and more on an a huge reseller network.

According to the report, Dell can also challenge Cisco's supremacy in low-end fixed switches.

It can achieve this by leveraging its direct sales channels, including its website, to drive down costs to a point where Cisco's ability to command high margins will be threatened.

CIR also points out that Dell’s $11 billion in the bank is much closer to Cisco’s $20 billion of net cash and liquid investments than those of traditional rivals Juniper, Foundry, Extreme, 3Com, and Nortel.

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