"We believe that open-source is strong in some areas," Burton says. "We have a history of contributing to it, of leveraging Linux, Apache and other open-source code. We continue to look at the cost of our own solution to ensure that the full cost of ownership compares favorably to others in the market. As long as we continue to provide the right total value to our customers, we'll continue to get our fair share of the business."
Though the router market is certainly newer, Matthias Machowinski, directing analyst at Infonetics Research Inc. in Campbell, Calif., says that there is room for open-source products in this part of the market. He wouldn't call them a threat to Cisco, however, because the entire market itself is growing.
"Open-source is growing like wildfire, but the whole pie is getting bigger," Machowinski says. As there is more demand for routers and IP PBX systems, the open-source companies can succeed without taking any significant market share away from Cisco, though Avaya might have some more competition at the lower end of the market, he contends.
"What would be more of a threat would be someone providing a ready-to-use open-source solution" with no coding needed, Machowinski says.
Even so, Sam Houston University's Daniel suggests that Cisco will have to rethink its licensing practices to make its IP PBX offering cost-competitive with open-source products.