The Hod Hasharon-based company sells both the chipsets that PoE-enable switches from the factory and midspans, which are devices for retrofitting a PoE capability onto switches already in the field.

It sells its silicon to most switch vendors other than Cisco, which buys instead from rival Linear Technology. Cisco also has its own PoE retrofit capability, which has been a major obstacle to PowerDsine’s progress in the Cisco user base.

In the longer term, PoE chips will clearly hold the lion’s share of the business and wireless access points and IP phones proliferate within enterprises, requiring power where it isn’t always available, and all switches start shipping with PoE capabilities as default.

Until then, however, the money is in PoE-enabling an installed base of non-PoE switches, and this is where PowerDsine has been encountering problems in Cisco environments.

If a Cisco customer wanted to introduce PoE in their network, they could either rip and replace their existing switches with new PoE ones or deploy Cisco’s Catalyst Inline Power Patch Panel in their wiring closet to PoE-enable their current switches.

The Cisco product carried out the same function as a midspans. It was, however, expensive, inefficient and developed before the 802.3af standard for PoE was ratified, said Igal Rotem, CEO of PowerDsine.

Whether going for a new PoE switch or deploying the Patch Panel, the customer was looking at anywhere between $180 and $200 per port to deploy PoE, compared to a PowerDsine midspan price of $40, Rotem went on.

While the PowerDsine product was clearly the cheapest way to move to PoE, however, deploying it in a Cisco environment endangered the warranty on the switches. And with Cisco enjoying between 50% and 60% of the worldwide Ethernet switch market, that meant a significant chunk of the market was effectively off-limits to the Israeli company.

2005 was a year of rapprochement between PowerDsine and Cisco, marked first by the PoE vendor becoming a Cisco Technology Developer Partner for its WLAN portfolio in April, then for its VoIP products in June. Then finally, in November Cisco announced it was end-of-lifing the Inline Power Patch Panel over the course of this year and encouraging customers to migrate to one of PowerDsine’s midspans.

This means Cisco switches can now be fitted with midspans from PowerDsine to support Cisco IP phones as well as its wireless APs. It also means Cisco can penetrate Avaya PBX accounts with its IP phones, added Rotem.

He explained that previously Cisco has made no headway in such accounts, as Avaya offered its own IP phones to attach to its IP PBXes, deploying one of its power blocks alongside each phone to provide them with electricity.

However, at $50-$70 per phone, that works out rather more expensive than deploying a midspan in front of their data switches and powering the phones that way, which in turn opens the way for Cisco to pitch its phones as an alternative to Avaya’s in that account.

Cisco’s decision to ditch its own pre-standard PoE retrofit technology in favour of PowerDsine’s is clearly a huge fillip for the midspan vendor. It is also very interesting in what it says about Cisco’s changing priorities.

Where previously it would have nudged the customer, through discounts and other commercial benefits, toward buying a brand new PoE switch and, failing that, insist that they use Cisco technology for the retrofit, it now makes the retrofit option considerably cheaper in order to ease the sale of more IP phones. One might almost say it is prioritising one of its Advanced Technologies over its core switching business.