Networking vendors have a lot on their plate. They need to innovate in areas like automation, AIOps, zero trust network access (ZTNA), secure access service edge (SASE), visibility, and multi-cloud management.
They must respond to customer preferences for subscription models and network as-a-service (NaaS) offerings. In a recent survey, IDC reported that 61 per cent of organisations worldwide were interested in shifting to consumption-based models for IT investments rather than capital intensive purchases.
At the same time, chip shortages and supply chain issues are proving challenging. As enterprises rebound from the pandemic and set their sights on data centre modernisation and digital transformation, orders are soaring. Unfortunately, networking vendors are having trouble filling those orders and backlogs are reaching historic levels.
The leading companies are the ones best able to manoeuvre around supply chain problems, tackle ballooning order backlogs, generate new revenue and continue to innovate.
Here is our list of the 10 most powerful networking vendors; not evaluated by size, but by their impact on the market and their forward momentum. In other words, there is some subjectivity associated with this list.
1. Cisco: Continues to lead the way
Why they’re here: Cisco has staked out a leadership position in a broad range of networking and security areas. Cisco’s ethernet switch revenues rose 3.8 per cent in the first quarter of 2022, giving it a commanding 45.4 per cent market share, according to IDC.
Meanwhile, Cisco’s combined service provider and enterprise router revenue rose 12 per cent for the full year to stand at 34.6 per cent. The Dell’Oro Group crowned Cisco as the leader in SASE in 2021, with 19 per cent market share.
And Gartner cited Cisco as a leader in wired and wireless infrastructure, noting that Cisco is investing heavily in both on-premises and cloud-based management powered by artificial intelligence (AI) and machine learning (ML).
Power Moves: Bought Opsani, a leader in AIOps and observability. Opsani will be folded into Cisco’s AppDynamics application management platform.
By the numbers: $51.6B: Cisco’s annual revenue for fiscal 2022, a three per cent increase over the previous year.
Outlook: Cisco has a record backlog of orders that it is struggling to fill due to chip shortages and other kinks in the supply chain. On the one hand, that’s a problem. On the other hand, that’s a good problem to have. Cisco is forecasting sales growth in the range of four per cent to six per cent over the next year.
Cisco CEO Chuck Robbins says, “There are currently more technology transitions occurring concurrently than I’ve seen in 20 years. Long term mega trends like hybrid cloud, hybrid work, security, Internet of Things (IoT), 400Gbps ethernet and beyond, 5G and Wi-Fi 6, as well as the move towards application observability will likely provide tailwinds to our growth.”
2. Broadcom: VMware acquisition could enable full-stack offering
Why they’re here: Chip maker Broadcom shook up the networking world with its proposed $61 billion acquisition of VMware. On the heels of its purchases of network management leader CA Technologies in 2018, and security vendor Symantec in 2019, Broadcom will boast a powerful portfolio of software assets.
There are certainly questions surrounding Broadcom’s intentions; as one analyst bluntly put it, “Will Broadcom milk VMware dry or become a full stack company?” No matter how it plays out, all eyes will be on Broadcom.
Power Moves: Engineering the pending purchase of virtualisation pioneer VMware (which had just been spun out as an independent company after being part of Dell.)
By the numbers: $8.5B: Broadcom says it plans to increase VMware’s profitability from $4.7 billion to $8.5 billion within the first three years of closing the deal.
Outlook: Broadcom is well aware of its reputation as a company that runs a tight fiscal ship. In the cases of Symantec and CA, Broadcom slashed expenses, laid people off and focused on the bottom line.
Broadcom CEO Hock Tan has said that Broadcom will treat VMware differently; VMware will become the centrepiece of a new software division within Broadcom that will include CA and Symantec.
“By bringing an iconic pioneer like VMware into the Broadcom family, we will be able to reimagine what we can deliver to our customers,” said Tan. Experts analysing the deal predict that Broadcom will reduce VMware spending in areas like sales and marketing, will try to boost recurring revenue from existing customers, will limit R&D to the most profitable product lines, and will probably raise prices in order to hit that ambitious profitability goal.
3. Arista Networks: Records first $1 billion quarter
Why they’re here: Surging Arista has hit a couple of major milestones: It reported its first $1 billion quarter and its ethernet switch revenue hit 10 per cent market share on 55 per cent growth, according to second quarter 2022 results from IDC.
The company is ranked as a ‘visionary’ in Gartner’s latest evaluation of wired and wireless infrastructure vendors based on its portfolio of spine-leaf switches and wireless access points managed by the CloudVision management platform that features automation and advanced AI/ML capabilities.
Power Moves: Bought Pluribus Networks, whose Unified Cloud Fabric enables customers to manage networking and security across multiple clouds.
By the Numbers: 48.7 per cent: Arista’s revenue increase in the second quarter of 2022, compared to the same period in 2021.
Outlook: Despite supply chain challenges, Arista is thriving with its emphasis on cloud networking. It is also trying to get ahead of the curve when it comes to the integration of networking and security.
For example, Arista is embedding network detection and response (NDR) security software into its 720XP series switches to provide AI-driven threat protection across campus networks. Analyst Zeus Kerravala says network/security integration is the wave of the future and he credits Arista for catching it early.
4. Palo Alto Networks: Cloud strategy paying off
Why they’re here: When Nikesh Arora took over as CEO in 2018, next-generation firewall pioneer Palo Alto Networks was lagging the competition in areas like SASE, cloud security, Extended Detection and Response (XDR) and SOC automation.
Twelve acquisitions and $3.5 billion later, Palo Alto has established itself as a leader in all of those categories under the Prisma Cloud banner. Forrester has named Palo Alto a strong performer in the category of incident response services, a leader in cloud workload security and a leader in ZTNA. Palo Alto has also been listed as a leader in Gartner’s Magic Quadrant for network firewalls and WAN edge infrastructure.
By the Numbers: $5.5B: Fiscal year 2022 revenue grew 29 per cent year-over-year to reach $5.5 billion.
Power Moves: Arora says, “If you look at it historically, until about three years ago, we didn’t have a SASE; we couldn’t actually go head-to-head with the industry leader. What has happened in the last 1.5 years or two? We’ve become a force to reckon with.”
Outlook: Palo Alto’s bets on cloud security, cloud-workload protection and multi-cloud have been paying off. And Palo Alto Networks continues to extend its security capabilities into new areas; moving into the DevOps realm with offerings that provide security assessments and enforcement capabilities to application developers.
Mad Money host Jim Cramer recently said that Palo Alto been on a roll “after CEO Nikesh Arora took it from being a firewall company to being a cloud-native and hybrid-cloud security play.”
5. Hewlett Packard Enterprise-Aruba: Leading the way in NaaS
Why they’re here: Combine Aruba’s WLAN gear, HPE’s networking portfolio, SD-WAN from its acquisition of Silver Peak, and NaaS offerings through HPE’s GreenLake service, then stir the pot with a new management team, and you have a recipe for success. Gartner has named HPE-Aruba a leader in its Magic Quadrant for both WAN edge infrastructure and SD-WAN. IDC identifies four “Leaders” in SD-WAN: Cisco, Fortinet, HPE-Aruba and VMware.
Power Moves: Following the departure of Aruba founder and CEO Keertie Melkoke and CTO Partha Narasimhan last year, HPE named industry veteran Phil Mottram to lead the Aruba subsidiary, and selected David Hughes, who came over in the Silver Peak acquisition, as CTO.
By the Numbers: 30.7 per cent: HPE-Aruba’s WLAN revenues rose 30.7 per cent in the first quarter of 2022, giving the company a 16.5 per cent market share.
Outlook: After attending the company’s latest user conference, analyst Kerravala reported, “What I found was that the company was better aligned with parent company HPE. Aruba makes great products and has been one of the best managed network vendors – it made sense to leave it as its own entity, post-acquisition. Now that HPE and Aruba products have come together, it’s clearly time for HPE to have a larger influence.”
Analyst Will Townsend of Moor Insights says that he is impressed with the recent announcement of eight purpose-built NaaS offerings, including wired access, SD-Branch, indoor wireless and wired core. He adds, “HPE continues to lead the pack in IT consumption services from my perspective.”
6. Fortinet: Joins the billion-dollar club
Why they’re here: With its in-house product-development prowess, Fortinet has built out an integrated platform of security and networking gear. Fortinet is a leader in Gartner’s latest rankings for SD-WAN vendors, as well as network firewalls and WAN-edge infrastructure.
Plus, it’s ranked as a visionary in enterprise wired and wireless LAN infrastructure. Gartner lists Fortinet as one of the top five global zero trust vendors in terms of market share and has “the fastest growing revenue of any vendor.”
Power Moves: Sponsored a PGA golf tournament: The Fortinet Championship was played in September on a golf course in Napa Valley.
By the Numbers: Fortinet reported its first billion-dollar quarter in the second quarter of 2022, with revenue hitting $1.04 billion, up 29 per cent year-over-year. To give some idea of Fortinet’s momentum, annual revenue went from $2.16 billion in 2019 to $2.6 billion in 2020 (up 20 per cent) to $3.3 billion (up 29 per cent) in 2021. And it’s on pace for $4 billion this year.
Outlook: Under the steady leadership of the Xie brothers (Ken and Michael), Fortinet has developed its Security MESH platform of products that share a single operating system (FortiOS) and can be centrally managed.
For example, SD-WAN for connectivity, ZTNA for secure access, and enterprise-grade security for traffic inspection and protection, can be configured, orchestrated, and managed using a centralised console.
Chairman and CEO Ken Xie says, “Fortinet’s market share gains are being driven by the convergence of networking and security and an accelerating focus on vendor consolidation.”
7. Extreme Networks: Hits $1 billion in annual revenue for first time
Why they’re here: Extreme is hot. A leader in Gartner’s latest analysis of wired and wireless LAN infrastructure, Extreme gets high marks for its cloud-based management capabilities (ExtremeCloud IQ) and its CoPilot automation platform.
Extreme continues to deliver new products, including wired and wireless “universal” switches, its first SD-WAN offering, and networking digital-twin technology that enables customers to test new configurations prior to deployment. ESG analyst Bob Laliberte says, “Those are things that will make people sit up and take more notice of Extreme, now that they’ve got that full, unified, end-to-end environment.”
Power Moves: Extreme completed Wi-Fi 6 deployments for Major League baseball teams including the Boston Red Sox, Chicago White Sox, Detroit Tigers, Kansas City Royals, New York Mets, Pittsburgh Pirates and Seattle Mariners.
By the numbers: $1.1 billion: Extreme reported fiscal 2022 revenue of $1.1 billion, up 10 per cent from 2021. The company also reported a record product backlog of more than $500 million.
Outlook: President and CEO Ed Meyercord offers a bullish assessment on the future: “We continue to take market share based on our industry-leading cloud innovation with new AIOps and ExtremeCloud SD-WAN solutions that greatly simplify network management for customers.
Extreme predicts that as the supply chain woes ease up and the company is able to tackle that backlog, revenue is expected to rise between 10-15 per cent over the 12 months from June 30, 2022 to June 30, 2023.
8. Juniper Networks: ‘Mist-ification’ pays clear dividends
Why they’re here: Juniper’s 2019 acquisition of Mist Systems is breathing new life into the company. Juniper says its portfolio of wired access, wireless access, and SD-WAN products managed via Mist AI grew more than 60 per cent year-over-year in the second quarter of 2022.
Juniper was named a leader in Gartner’s ranking of wired and wireless LAN infrastructure vendors. Gartner says Juniper is differentiating itself through AI, ML, automation, and natural-language AIOps through Marvis, its virtual network assistant.
Power Moves: Acquired WiteSand, a leader in cloud-native, zero trust network access control (NAC).
By the numbers: 117 per cent: Juniper’s year-over-year growth in wireless LAN, according to a report from the 650 Group published in the first quarter of 2022.
Outlook: Dell’Oro Group cites Juniper as one of two vendors able to best navigate the WLAN supply-chain shortage, noting that HPE-Aruba and Juniper “really pulled rabbits out their hats.” Dell’Oro adds, “The cloud-managed AP business is still dominated by Cisco—although this quarter [Q2, 2022] Juniper grabbed an outsized market share in cloud-managed wireless LAN.”
Juniper has been successful in growing its overall enterprise networking business, which increased 18 per cent in the first quarter of 2022, and is now larger than its service-provider and cloud divisions for the first time ever. Adds Juniper CEO Rami Rahim.
“Demand signals remain healthy, and we are seeing attractive opportunities across our enterprise, cloud, and service-provider markets. Based on this momentum, the backlog we have built, and our latest expectations regarding supply, I am increasingly optimistic regarding our revenue growth prospects for the year.”
9. Dell: APEX subscription play hits $1 billion in annual revenue
Why they’re here: Leveraging its powerful lineup of servers, storage, hyperconverged infrastructure, networking, and security, Dell is carving out a leadership position with its APEX infrastructure-as-a-service offering. APEX offers enterprises the opportunity to deploy IT infrastructure in data centres, cloud or hybrid-cloud environments that Dell will install and manage as-a-service. APEX is targeted at enterprise requirements for speed, agility, and resilience, while avoiding capital expenses.
By the Numbers: $24 billion: Give or take a few million, the amount that Michael Dell is expected to haul in when the $61 billion Broadcom purchase of VMware is finalised. Michael Dell owns 41 per cent of VMware.
Power Moves: Recently launched its largest ever release of its successful PowerStore storage products and PowerMax management software.
Outlook: Dell recorded second quarter fiscal 2023 revenue of $26.4 billion, up nine per cent. Storage revenue was $4.3 billion, up six per cent, while servers and networking revenue was $5.2 billion, up 16 per cent year-over-year. Dell continues to build on its installed base of storage devices by adding advanced data analytics (Data Lakehouse).
Dell is also offering ransomware protection in the form of the PowerProtect Cyber Recovery service. Steve McDowell of Moor Insights and Strategy sums up Dell’s strategy this way: “Dell’s embrace of the multi-cloud reality that most IT organisations face is a powerful statement from the world’s most dominant IT infrastructure provider. Dell isn’t just messaging “edge to core to cloud,” but is actively delivering the products and solutions that will simplify life for IT administrators.”
10. Zscaler: Pioneer in cloud-native security, SSE, ZTNA
Why they’re here: Macro-trends such as the shifts to remote work and the increased deployment of cloud-based applications have played right into Zscaler’s cloud-native wheelhouse: Under the Zscaler Zero Trust Exchange umbrella, the company delivers secure service edge (SSE), ZTNA, end-to-end application protection, and cloud security.
Gartner named Zscaler a leader in its first-ever ranking of SSE vendors. Gartner says Zscaler “has a solid track record of innovation and continues to invest before its competitors in efforts to provide interesting innovations in the SSE market.”
For example, it was the first to introduce digital experience management (DEM), an advanced version of application performance management, which enables it to collect and analyse end-user experiences wherever the agent is installed.
Power Moves: Bought Smokescreen Technologies, a cyber-deception platform that provides threat prediction, breach response, and other related services. It also scooped up Trustdome, an innovator in Cloud Infrastructure Entitlement Management (CIEM).
By the numbers: $1,091 billion: Zscaler joins the ranks of companies hitting the $1 billion threshold. Annual revenue hit $1,091 billion in the fiscal year that ended July 31, an increase of 62 per cent year-over-year.
Outlook: The vendor says it expects revenue to increase sequentially from $318 million in its fourth quarter of 2022 to $340 million its first quarter of fiscal 2023. And annual revenues could hit $1.5 billion, according to Zscaler’s September 8 financial statement.
On the innovation front, the company recently introduced cloud-native application protection and zero trust for cloud workloads. Says Chairman and CEO Jay Chaudhry: “Despite the uncertain macroeconomic landscape, which continues to evolve, we continue to see favorable demand for our Zero Trust Exchange platform because it makes businesses more secure, simplifies IT, and reduces cost.”