Unisphere Networks claims strong competition in key market segments and a weak economy are causing problems for Cisco Systems. 'There are a number of companies which are thriving in this economic downturn by taking significant pieces of market share away from Cisco,' Adam Judd, Unisphere's vice-president for Asia-Pacific operations, said. 'These include Unisphere, Juniper Networks, Ciena Corp and Redback Networks, which are all hitting Cisco hard in areas where it used to just dominate. 'It is Cisco's woes that have been bringing our whole market down because the company is pretty much in every networking technology segment.' Cisco networking equipment has long been recognised as accounting for 98 per cent of the Internet's core plumbing. Last week, Cisco president and chief executive John Chambers said the networking business environment was being challenged like never before because of the economic slowdown, which inevitably led to decreased capital spending by service providers and enterprises. That situation pushed Cisco to announce a workforce reduction of 8,500 - about 17 per cent of its head count - and the write-off of about US$2.5 billion in inventory. Frankie Sum, Cisco's managing director for Hong Kong operations, said the networking equipment market in Asia, excluding China and India, would continue to be depressed 'over the next six to nine months'. In a recent report, Gartner analysts Mark Fabbi and Jay Pultz said: 'The problems Cisco is experiencing are not entirely outside of the company. 'Cisco continued to build up inventory and staff for too long in the wake of signs of a softening market.' They said Cisco viewed itself 'as immune to the problems that befell Lucent Technologies and others, and could have taken advantage of its competitors' distresses'. They said the new directions Cisco was pushing - such as voice-over-Internet protocol - 'have been slow to take off, and competitors are more successfully attacking in certain product areas'. Those areas included high-end routing, where Juniper had swiftly gained ground by as much as 35 per cent within two years, and in broadband remote access routing, where Unisphere competed with its switch that offers a processor-based routing and high-speed data access system in one box. Mr Judd said: 'Unlike Cisco, which operates in all segments of the data networking industry, companies like Unisphere and Juniper are focused only on parts of the networking business. 'That means we don't stock product because we make product to order.' Although he agreed with Cisco's conclusion the company had been affected by the slowdown in spending by service providers, Mr Judd said: 'To be honest, that situation is mainly because service providers have decided to spend their money with other partners, such as Unisphere.' He cited TelstraSaturn, a company that combined the New Zealand operations of Telstra and Austar United Communications. IP-based services for TelstraSaturn's fibre-to-the-building deployment use Unisphere's ERX edge router, while the network's core routing uses products from another Cisco competitor. 'A lot of investment has already been made in the networking core in Asia, where Cisco products dominate. Now, the game is at the network's edge, also known as 'the last mile', where service providers want differentiation and new revenue-generating services. Broadband remote access is where investments will continue to be made amid the overall market slowing down. This is the boom market,' Mr Judd said. On the mainland, Unisphere claims it has sealed deals with almost half the country's 31 rural and urban telecommunications authorities (TAs). Beginning with Beijing Telecom last July, Unisphere's mainland customers include Changsha TA, Hangzhou CATV, Jilin TA, Jitong Networks, Ningbo TA, Urumuchi TA, Weifang TA, Weihai TA, Wuhan TA, Yichun TA, Zhenjiang TA, Zibo TA and Anhui TA. 'These customers have selected Unisphere's ERX-1400 edge routing switch to meet the growing needs for next-generation broadband IP services across China,' Mr Judd said.