Cisco pays for favourable Asia Pac SMB study

Stan Beer
Tuesday, 12 April 2005 02:40

IT Industry - Development

A recent study by technology analyst group Frost & Sullivan found that small and medium businesses (SMBs) in Asia Pacific are moving away from multi vendor networking solutions to primary vendor suites. This would be interesting news, except the study was bought and paid for by none other than the big daddy of primary networking vendors Cisco Systems.

We wonder why vendors bother to pay market analysts to perform commissioned market studies. Do they really think potential clients believe these studies present a fair, accurate and unbiased picture of the market? We also wonder why analysts risk their credibility by accepting such briefs from vendors. Well I guess we know the answer to that one.

The so-called main drivers for the "trend" identified in the study were considerations for consolidation, convenience and cost, at a time when growing network complexity is supposedly posing a challenge in terms of management, integration and cost. The Cisco commissioned study  surveyed over 100 SMBs in Australia, New Zealand, China, Hong Kong, India, and Singapore. We would question whether that this is a sufficiently large sample to draw such a wide sweeping conclusion that there is a trend toward single vendor networking solutions. There are after all 1 million SMBs in Australia alone.

"Network complexity is no longer an issue for just the large enterprises, but also a growing concern for small and medium businesses," insists Manoj Menon, partner, Frost & Sullivan. "SMBs are today forging ahead in the adoption of newer networking technologies, having realized the business benefits behind new generation networks that offer converged data, voice and multimedia."

Frost & Sullivan's analysis on the total cost of ownership (TCO) of a suite of 4 solutions (IP Telephony, Switching, Routing and Network Security) from Cisco versus best-of-breed products revealed the following:

- Overall cost savings of 49% over a period of 3 years;
- 0% hidden costs compared to 19% hidden costs in best of breed solutions;
- Savings across all the TCO components, with the exception of upfront
costs.

So there we have it. A research organisation that was paid to conduct a study by a vendor spews forth all the right data and conclusions to support the vendor's sales effort. Are we meant to be impressed?