Light Reading
As it tussles with financial drama and SDN issues, Cisco's answer to both could be a marketing and pricing revamp for enterprise products.

Cisco Tweaks Enterprise Marketing Model

Dan O'Shea
3/6/2014
50%
50%

Cisco is about to change the way it does business in the enterprise market, and while its take on SDN (which is not everyone's take, by the way) is part of the pitch, the bigger part of the story might be less about technology and more about pricing, packaging and branding.

Cisco Systems Inc. (Nasdaq: CSCO) convened a media roundtable this week to discuss how recent announcements regarding its Application-Centric Infrastructure, Application Policy Infrastructure Controller and Intercloud, among others, are being aligned under its Cisco One Platform, targeted at the three infrastructure domains of datacenter, enterprise WAN, and access network. (See Cisco's ACI Gets Physical With SDN, Cisco Extends APIC to Enterprise, and Cisco Goes Hybrid With Intercloud.)

Cisco officials said they are moving the ACI and APIC SDN-related solutions, accompanying APIs, and all other existing hardware and software products targeted at these domains, into four different tiers of suites -- Cisco One Advanced Security Services, Cisco One Advanced Application Services, Cisco One Foundation and Cisco One Essentials -- that enterprise customers will be able to license from the company on a suite-by-suite basis if they desire, rather than trying to figure out which individual products they need.

"We had a bunch of products, and we're going to turn those products into licenses," Cisco President Rob Lloyd told the dozen or so roundtable attendees. "Product brands will become much less important than the suite itself, though if you want the product, we'll still sell you the product. The challenge for us will be simplification and packaging."

Lloyd said Cisco will discuss pricing and more details about the new suites and licensing schemes at Cisco Live! in May in San Francisco. He also said the company is working out how service providers can market suite licenses as part of managed services offerings.

So, why now for a marketing model makeover? The retreat from individual products almost makes it sound like Cisco is taking to heart a lot of the criticism about its abundant energy for protecting its own legacy products amid SDN's rise. Almost.

The packaging shift also could be read as a somewhat panicky response to a changing enterprise networking market and a rough patch of lowering sales.

It wouldn't be out of the question. Amid his company's recent financial slump, Cisco CEO John Chambers has blamed the networking giant's troubles on a variety of factors, including the NSA spying scandal, but perhaps he's looking in the mirror now. (See Chambers Caught in 90s Deja Vu and Revenue, Income Slide In Cisco's Q2 2014.)

More likely, however, Cisco is looking to control the conversation about what the enterprise really needs and what it doesn't (Hint: Cisco doesn't think enterprises need SDN).

In fact, Lloyd said the central role of SDN -- the separation of the control and data planes -- "is sort of losing interest" among enterprise customers, who have told Cisco that they want simplicity more than anything else.

"We haven't seen the use cases [for SDN] outside of very large software companies. We would never disagree that SDN at the very largest enterprises -- the Facebooks and the Amazons -- is underway. But, in most enterprises, there is a massive opportunity to simplify the deployment of applications. The value is if a controller can be used as a consolidation point for deploying infrastructure."

Cisco's critics usually don't need any help keeping their ire up, but that notion is likely to feed more criticism of Cisco's handling of SDN, and the already prevalent belief that the company is moving around its own deck chairs rather than joining the SDN movement in earnest. (See Cisco Watchers Blinded by SDN and Cisco CEO: It's Early Days for Virtualization.)

— Dan O'Shea, Managing Editor, Light Reading

(6)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
thebulk
50%
50%
thebulk,
User Rank: Light Sabre
3/6/2014 | 1:25:07 PM
Re: Open their eyes
I have no doubt that SDN will play a large role in some areas going forward, I think Cisco sees that taking a chunk away from their business in a time when they are already trying to figure out how to best advance in the industry. 
danielcawrey
50%
50%
danielcawrey,
User Rank: Light Sabre
3/6/2014 | 12:29:21 PM
Re: Open their eyes
Cisco saying that SDN is not important? They are at least downplaying it here. 

Look, I think that SDN will be important. The problem for Cisco is that it is a really hard sell to most companies. It's also really expensive since it is so new. But lets give it time. I don't see why networking won't become more software-specific. 
thebulk
50%
50%
thebulk,
User Rank: Light Sabre
3/6/2014 | 12:27:52 PM
Re: Open their eyes
I think they are definatly trying to get the hooks in a lot more companies for support contracts, at least that is what I saw on the service provider side, it seems like every time the company would ink a deal with Cisco over the past few years they would up the service contract, something I had not seen in the first 5 or so years in the sector. 

I could get into the whole Cisco licensing structor and its implementation, but perhaps another time...

As for them being a sinking ship, I think we don't know that yet. They are definatly taking on water, but its just too early to tell if they will be able to pump it out on time. 
DOShea
50%
50%
DOShea,
User Rank: Blogger
3/6/2014 | 12:05:05 PM
Re: Open their eyes
Yes, and Cisco's response from a product pricing model viewpoint now looks like it is thinking of ways to keep its very large customer base moving as much inventory as possible in suites rather than via single product sales, perhaps the better to increase customer reliance on Cisco service and support...?
DOShea
50%
50%
DOShea,
User Rank: Blogger
3/6/2014 | 11:58:28 AM
The morning after...
Wrote this rather late last night, and in the cold light of morning two of my word choices are gnawing at me; Cisco's move might be more accurately described as a sales and pricing makeover than a more general marketing makeover; and the incomplete "deck chairs" metaphor is maybe not as appropriate as comparing Cisco's actions to navel-gazing.

Cisco is not a sinking ship, not yet, though some in the SDN sector would like to believe that.
thebulk
50%
50%
thebulk,
User Rank: Light Sabre
3/6/2014 | 11:47:18 AM
Open their eyes
I think Cisco had their eyes close for the most part and did not see SDN come right up behind them. I can remember talking with Cisco engineers and Sales reps and one year they were saying it wasnt an issue for Cisco and the next it was all whispers and head nods about people being worried about it. 

 
More Blogs from DOS Attack
The emergence of an industrial enterprise customer for Infinera revives a long-standing question.
Optical transport vendors are finding growing business opportunities with web content firms even as their overall market shrinks.
Intel buys ARM processor assets to make it better equipped for the future of mobile equipment and SDN-enabled data center gear.
A Juniper Networks poll finds a little more than half the companies surveyed have SDN deployment plans, while the rest have none.
The 25G Gigabit Ethernet Consortium looks like a case of companies moving to establish a default standard where the standards process has failed so far.
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With CEO of SwitchCom

10|30|14   |   4:13   |   (0) comments


SwitchCom, an IT company based in Angola, recommends a variety of Huawei solutions and hardware to their customers in the energy industry.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Ethiopia's Ministry of Water Irrigation & Energy

10|30|14   |   4:08   |   (0) comments


Gosaye Mengistie of Ethiopia's Ministry of Water Irrigation & Energy discusses the collaboration with Huawei in that country.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview with Dongfang Electronics Corporation

10|30|14   |   5:46   |   (0) comments


Dongfang Electronics Corporation, headquartered in Chengdu, China, is one of China's largest manufacturers of power generators and contractors of power station projects.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview with Zimbabwe's Customers

10|30|14   |   3:31   |   (0) comments


Representatives of Zimbabwe's Ministry of Power and Development discuss the energy needs of their country as well as new areas of improvement due to enhanced ICT capabilities.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Colbún Chile

10|30|14   |   4:29   |   (0) comments


In Chile, an aging energy infrastructure was in dire need of a modern update. Claudio Valenzuela of Colbún discusses how Huawei's ICT solutions continue to provide crucial information to improve the grid and how an in-country engineer is a cricial asset.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With YuLiao

10|30|14   |   6:27   |   (0) comments


Yu Liao, chairman of the Chinese Association for Renewable Energy in Germany, discusses the role that ICT solutions play in helping to grow renewable energy resources in Germany.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview

10|30|14   |   2:54   |   (0) comments


Sifang has been working with Huawei on several projects. JingTao Wu, Assistant President of Beijing Sifang Automation Co. Ltd., believes that the cooperation with Huawei can facilitate Sifang's process of internationalization.
LRTV Huawei Video Resource Center
A Better Connected Smart Grid: Powering Laos

10|30|14   |   5:38   |   (0) comments


Representatives of Electricite Du Laos (EDL), a state-owned corporation, discuss the importance of ICT solutions in serving their country's energy needs.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Junwei Lu

10|30|14   |   4:50   |   (0) comments


Professor Junwei Lu of Griffith University Australia describes his work with micro grid technology and the future of the power industry.
LRTV Documentaries
The Next-Gen Network Disconnect

10|29|14   |   01:23   |   (0) comments


There's a lot of talk about making networks more simple with SDN, NFV and next-gen broadband technology – but what about the complexity of introducing such capabilities?
LRTV Custom TV
Grow Your VPN Service Revenue

10|27|14   |   4:00   |   (0) comments


Watch how CSP product managers can better differentiate and maximize the value of their Internet, VPN and cloud services for business services customers, by adding premium application performance visibility to their data services.
LRTV Huawei Video Resource Center
Add SmartSense to Make Your Network Ready for 4K

10|27|14   |   3:23   |   (0) comments


To make current networks ready for the coming 4K TV challenges, Huawei SmartSense solution will conveniently add experience and operation capabilities to boost telcos' future business.
Upcoming Live Events
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
February 10, 2015, Atlanta, GA
May 6, 2015, McCormick Convention Center, Chicago, IL
May 30, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
Infographics
WhoIsHostingThis.com presents six of the world's most extreme WiFi hotspots, enabling the most epic selfies you can imagine.
Hot Topics
Microsoft's Skype Embraces WebRTC on IE
Sarah Reedy, Senior Editor, 10/27/2014
FTC Slaps AT&T With Throttling Lawsuit
Sarah Reedy, Senior Editor, 10/28/2014
China's MVNOs Hit the Wall
Robert Clark, 10/27/2014
Let's Not Kill SDN & NFV With Silos
Francois Locoh-Donou, Senior VP, Global Products Group, Ciena, 10/28/2014
Wheeler Gets Down With OTT
Mari Silbey, Independent Technology Editor, 10/29/2014
Like Us on Facebook
Twitter Feed