Friday, April 29, 2011

Cisco - Growth, Competition, Challenges, Options

After the Gartner report (They said, that when you bring 2nd vendor it won't hurt the operations and also reduce the opex by 15-60%) there is lot of hot discussions/exchanges between Cisco and competitors.

Competitors say "Good Enough" Networks, while Cisco rebuts the "Good Enough" aggressively in its blogs, webcasts and all sort of communications. Here

In my personal opinion, I'd still think the Core / Mission critical portion of Network to keep single vendor. Rest of the domains can be mixed/dual vendors. My biggest justification would be "Operational Reasons". After all machines/boxes can deliver what they can based on the "Human" who manages/configures them.

In my 12 years of experiences I can summarize almost 90% of outages are due to Human Error/Factor. It could be a wrong command, accidental modification or unknown config etc etc. We've all sorts of MOP (Method Of Procedures), SOP but still "human factor" is a critical aspect of operations.

For Cisco, if I do a quick SWOT,


Strengths:


* Networks = Cisco for most of the managers/sr mgmt. (Well known brand, established relations)
* Excellent channel partners & technology partners
* Well known/proven support
* Strong financial position & Excellent staff

Weakness:


* Giant and not fast to new changes
* Highly complex/complicated partner/support structure can put off SME's/Small enterprises
* Price.. (Too expensive for minor tasks)

Oppurunities


* Data Centers & new growth areas in IT area
* Mobile Networks. More and more networks are going all-IP. But this itself is a challenge too
* Build Cloud, Security in the network boxes

Threats:


* Intense competition from new entrants as well as IT vendors. Margin pressures (Juniper still can maintain 60% margins while Cisco margins are no where near where they're in 2000)
* Changing business models in Telco's/Large enterprises (Managed Services where operators are purchases based on Mbps/Transactions. Mobile giants like Ericsson, ALU, NSN are building their own high end routers and ALU is the 2nd player in the market  right now)
* Missing the reality at Ground and coming up with new products like UMI (Strictly not a threat but this is where they'll loose if they don't stop)

So in a nut shell , Cisco can still deliver and be what they used to be in 2000. But it takes a lot of effort from top mgmt, change of mind set and most importantly establishing direct relation with customer. Cisco is taking steps in the right direction (atleast now) and will not be surprised if they offer it's own managed services as part of advanced services arm.

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