I. Executive Summary

The study was conducted in October 1998 at Networld + Interop in Atlanta. 1,100 attendees completed the survey.

The purpose of this study is to understand what it takes for communications and services providers to become the preeminent data networking equipment provider. We wanted to find out what it takes to become the best at satisfying customers in the data networking equipment market.

The main findings include: 1) Customers seek new vendors who demonstrate strength and leadership in New Technology, Excellent Value and Superior Service. 2) Study participants become very satisfied customers when data networking vendors deliver on these services and characteristics: Customer Support, Reliability (performing as promised), Solid Product, Great Service, Technology, Compatibility/Standards and Quality.

Readers must use caution in interpreting these results. The findings require a greater consideration of other variables to assess who are the best data communications equipment vendors. This information is made available as a courtesy to those persons who participated in the study so that they may contrast their responses with the responses of all study participants.

II. Awareness

Who are identified as leading data communications equipment providers?

Cisco continues to be the dominant vendor in the Market Awareness measurement and has made gains over the past one and one-half years yet has recently leveled off. 3Com and Cabletron have maintained their same levels of Awareness. Lucent technologies has made real improvements in market awareness. Nortel’s gain is related to its acquisition of Bay Networks. Compaq (DEC) and Ascend have shown recent improvements.

A. Data Networking Providers Ability to Provide Data Networking Product, Solutions and Services

Leading data networking equipment companies were evaluated on their ability to provide Data Networking Products, Solutions and Services based on experience or perception. Cisco Systems was considered the best and 3Com was considered second best. Lucent was third. The higher the score reflects the favorable perception that a vendor has in the marketplace. The table depicts market perception over time.

B. Vendors best suited to solve problems

III. Customer Satisfaction Analysis

A principal objective of the study was to understand on market sentiment data networking companies abilities to satisfy customers by providing data networking products, solutions and services. Next the study determined the critical attributes a leading provider must have. Additionally, the attributes that the market employs to measure the levels of excellence are also analyzed.

A. Best Companies in Satisfying Their Customers

The study participants were asked to list 3-5 data networking companies that they believed were best in making them satisfied customers. There were 800 responses to this question.

B. Customer Satisfaction Attributes

The table below lists the attributes of the best data networking companies in terms of their ability to satisfy customers. These are the actual attributes that the study participants themselves used to describe the leading data networking equipment providers.

C. Data Networking Providers Customer Satisfaction Rating

The table below illustrates the degree that the study participants believe that the data networking equipment providers deliver on the key attributes.

D. Attributes of Excellence

The study participants were presented with two sets of attributes or characteristics that may be used on an on-going basis to measure excellence in their data networking equipment and solution providers.

The first set of attributes, Personnel Related Attributes, is based on a data networking equipment provider’s personal interaction capabilities. These are Engineering, Training, Business Relationship, Delivery (coming through with products and solutions as agreed upon) and Sales.

The second set of attributes, Product Related Attributes, is based on the data networking equipment provider’s products and services. These attributes are Product Quality, Technical Support, User Documentation, Installation, Repair and New Products.

The two leading attributes that a vendor’s excellence is measured are Engineering and Product Quality. A consistent demonstration of excellence in these areas will result in market leadership over the long run.

1. Personnel Related Attributes

They were asked to determine the relative importance of the attributes within each set. This exercise was definitively conclusive as each attribute was evaluated against one another in a multiple paired win-loss comparison exercise. The Tables below present the results of the Personnel Related Attributes exercise and the Product Related Attributes exercise.

Engineering expertise scored the highest with a relative score of 41% among the Personnel Related Attributes. A leading data networking equipment vendor must consistently develop and produce well-engineered products.

Business Relationship is considered somewhat important with a relative score of 19%, but the statistics do not reflect the true importance of this attribute in measuring excellence of data networking equipment providers. Business Relationship is not a measure that stands alone in the minds of decision makers. It actually encompasses other key measures of excellence: delivery, training, sales and credibility. A sound business relationship requires expertise in these attributes.

The discussions on this subject in the focus groups uncovered additional aspects of Business Relationship that make it the second most important attribute in this set. A good example of this is the subject of loyalty in a business relationship.

2. Loyalty

Customers are loyal to their primary vendor to a certain extent. Loyalty is high when things go right and the products are of the requisite value. Loyalty quickly diminishes when the vendor repeatedly fails to provide the requisite attributes.

a. Overall Loyalty

Customers prefer to do business with as few vendors as possible two or three is an optimum number. They liked working with vendors that know their industry and their unique operations. 32% placed an importance on loyalty as a critical characteristic of a business relationship. The balance were not really loyal. Most say they will readily consider other vendors if there is value and an impetus to do so. The impetus to leave one vendor is do to its failure to deliver. To go to a new vendor is done when the new vendor has proven capabilities and a credible track record.

Loyalty

The chart below displays the degree that customers say that they are loyal to their current primary data networking equipment provider, the degree that they are willing to listen to new vendors, and the degree that they are not loyal to their current vendors, as listed.

Chart - Customer Loyalty by Data Networking Equipment Provider

c. Factors to make customers switch/add vendors over the next 24 months

The chart below highlights the factors that would make a customer switch data networking equipment and solution providers. They were asked to select their top three choices. Other factors mentioned by less than 5 % of the study participants are better delivery, global coverage (although 10% of companies with greater than 100,000 employees thought this was important), broader product line and better sales force. Data Networking Equipment providers that demonstrate strength in these factors and capably communicate and prove these to the market will win new customers.

  3. Product Related Attributes

It is not surprising that Product Quality is by far the most important attribute in the Product Related Attributes category. They require nothing less than highest quality products. They use their data networking products in critical applications.

Superior Technical Support is a requirement. The market leaders regularly give outstanding support. It is no longer a distinguishing characteristic to be a superior provider of this attribute.

The other attributes are important. They are also considered as requirements, but less so than Product Quality and Technical Support. New Products although not a daily requirement is probably more important than the statistics numbers indicate. more competitively viable.

IV. Most important issue facing you

Study participants were asked to list the number one issue facing them. No single issue was resoundingly the most important.