Cisco backed innovation through 2008 and took the lead from a collapsing Nortel

As the 2008 recession took hold, enterprise communications budgets shrank and most vendors lost revenue. Cisco was the exception: it gained enterprise telephony market share while Nortel, already under financial pressure, kept sliding.

By mid-2009 Nortel had filed for bankruptcy under debt and restructuring troubles. That forced it to shrink, opening an enterprise market it had long contested with Cisco.

Cisco continued to invest in its product line through the downturn, and analysts reported it consolidating its leadership position in a shrinking enterprise communications market.

In the overall market Cisco solidified its leadership with strong second-half 2009 results, while Nortel's collapse and later asset sales left customers looking to Cisco and others.

Cisco overtook Nortel to become the top vendor in enterprise telephony, growing revenue about 19% in the third quarter of 2008 while rivals lost ground.

Cisco kept investing in enterprise products through the recession rather than cutting back.

Nortel was mired in debt and filed for bankruptcy, forcing it to retreat.

Cisco's relative growth let it gain share while rivals shrank.

Nortel's customers had to shift to surviving suppliers, favoring Cisco.

A downturn is a moment to gain share from weaker rivals: if a leader keeps spending on innovation and products while a competitor is forced into retreat, the leader's relative position leaps.

Cisco retained leadership in enterprise telephony and networking through the downturn. Nortel's assets were sold off after 2009 bankruptcy, and competitors like Avaya and others absorbed pieces, but the market shakeout cemented Cisco's stronger position in the decade that followed.