Channel Marker

May 9 2011   8:58PM GMT

What’s up with Cisco?

badarrow Barbara Darrow Profile: badarrow

VARs want to know what’s up with Cisco Systems.

Cisco’s decision to axe its Flip digital video camera business two years after spending $600 million on it strikes many VARs, including those on the SearchITChannel.com channel advisory board, as an indication of big problems.

The networking giant, which printed something like 35 corporate priorities on employee badges, is truly at sea, they said.

“Cisco seems to have no idea of where or what they want to be,” said one advisory board member on this quarter’s teleconference.

Face it,  if you have more than a half-dozen priorities, you have no priorities at all.

At least  Cisco got the memo. Literally.  In early April,  CEO John Chambers sent out a memo outlining changes aimed at fixing what’s ailing the networking giant.

Money line from Chambers:

“…Today we face a simple truth: we have disappointed our investors and we have confused our employees.  Bottom line, we have lost some of the credibility that is foundational to Cisco’s success – and we must earn it back.”

That confusion stems from Cisco’s scattershot approach. Cisco wanted to rule in low-end Web conferencing, in home routers, in high-end teleconferencing/video, in data center servers. In the process, it lost sight of its bread-and-butter network hardware business. You know, the business that actually kept the lights on?

To be fair, not everything was a bust. Cisco has some pretty good traction with its Unified Computing System (UCS) data center hardware. But partners also said the vendor is still struggling to make sense of other efforts including its four-year-old buyout of Webex .

“Are they a services company? A hardware company? A consumer electronics company? No one there seems to know,” said another advisory board member.

How about that high-end “immersive” telepresence push? Broadcast networks are no doubt thrilled with that product placement loot,   I, for one,  never tire of watching Jack Donaghy talk to Jack Donaghy via Cisco telepresence on 30 Rock. But how many companies are really paying for this expensive toy?  Just a few weeks ago, Cisco launched its own containerized data centers.

Partners get that Cisco needs to focus in on what matters. It’s just too bad that Flip’s innovative cameras –not to mention $600 million –got lost in the process. These VARs wonder if Linksys, the pioneer in quality low-end wireless routers for homes and small businesses will meet the same fate. They agree with analysts who say Cisco killed Flip to show Wall Street that it can concentrate on its core business.

 But Cisco is still flogging a lot of stuff way outside its comfort zone and left its cash-cow networking hardware business vulnerable to Hewlett-Packard, Alcatel-Lucent  and others for far too long.  That has proven to be a very expensive mistake.

Cisco is certainly not alone in this attempt to be a jack-of-all-trades. HP’s hydra-headed product strategy befuddles its own best partners. HP says it’s  beefing up its smartphone/consumer electronics push with WebOS. And, insists that HP is the only company that can provide soup-to-nuts data center hardware across server, storage, networking silos. And don’t forget enterprise services. And enterprise software. And the omnipresent “cloud.”

“This corporate strategy reeks of the investment advice people get that says they must diversify their portfolios,” said a third member of the board. “You want a little of everything to hedge your bets but the reality of that strategy is that the more you spread things around, the thinner and thinner your efforts get,” he said.

One annoying sign trouble at Cisco is the company’s near desperate insistence that every press and analyst call (or partner call for that matter) use the widely detested Webex.

(Note to Cisco: There is zero value for people not on your payroll to be corralled into a conference call at which some mid-level exec reads PowerPoint slides and is unwilling or unable to go off script.)

Even as I typed this, I initiated and took part in a LogMeIn “Joinme” Web conference. We got on, did our thing, and were done in minutes..without having to download software or figure out audio. When was the last time a Webex session was that easy? You don’t remember either, do you?

Here’s hoping that Chambers meant what he said when he talked about prioritization. He listed five major Cisco priorities:  the core routing, switching and services; collaboration; data center virtualization and cloud; architectures; and video.  

Some say that that list is still a couple priorities too many.

Remember, a jack of all trades is the master of none.

Let us know what you think about the story; email Barbara Darrow, Senior News Director at bdarrow@techtarget.com.

Check out more IT channel news on SearchITChannel.com and follow us on Twitter!

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