Users shrug off premiums, cite reliability

News Story by Matt Hamblen - APRIL 26, 2004

Twenty years after it was founded, Cisco Systems Inc. so overwhelmingly dominates the networking equipment market that many network managers say they don't balk about the need to pay premium prices for most of its products.
The upfront cost of Cisco's switches and routers is often higher than the price of rival devices, according to interviews with 15 Cisco users. Some of the users said the pricing premium charged by Cisco can total 15% or more, and analysts cited even larger cost differences. But most of the users put Cisco in the legendary category of 1970s IBM—a safe choice that won't get anyone in IT fired.

Cisco also got high marks for the reliability of its products and the strength of its customer service. As a result of the widespread perception that Cisco is more expensive, the users said they do try to keep an eye out for price discounts and innovative technology from Cisco's competitors. Still, they added that they often end up sticking with Cisco anyway.

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