& cplSiteName &

Cisco Tweaks Enterprise Marketing Model

Dan O'Shea

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        ADD A COMMENT
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. 
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. 
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. 
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...?
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.
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
Ciena and ADVA separately show off the ability for their new data center interconnect gear to address a variety of distance needs.
The utility industry is keeping TDM alive, but maybe not for much longer.
Vendor CEOs make a lot of money, but we have a list of those who made more than most.
Growing security threats are set to drive critical infrastructure operators to new investment and upgrades of their internal networks.
Mike Birck guided Tellabs for more than 30 years over a span of five decades.
Light Reading’s Upskill U is a FREE, interactive, online educational resource that delivers must-have education on themes that relate to the overall business transformation taking place in the communications industry.
Wednesday, October 26, 1:00PM EDT
Security: Tackling DDoS
Gary Sockrider, Principal Security Technologist, Arbor Networks
Friday, October 28, 1:00PM EDT
Security: The Plusses and Minuses of Open Source Software
Nick Feamster, Acting Director, Center for Information Technology Policy, Princeton University
Wednesday, November 16, 1:00PM EST
SDN 101
John Isch, Practice Director, Network & Voice, Orange Business Services
Friday, November 18, 1:00PM EST
SDN & Open Source
Christopher W. Rice, Senior Vice President of AT&T Labs, Domain 2.0 Architecture and Design
in association with:
From The Founder
Light Reading today starts a new voyage as part of a larger Enterprise.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
Next-Generation Technology Beyond DOCSIS 3.1

10|20|16   |     |   (0) comments

At SCTE 2016, Huawei's Liu Jianhua speaks with Alan Breznick for an exclusive interview.
LRTV Custom TV
Hybrid Video Solutions to Change TV, Change Future

10|20|16   |     |   (0) comments

At SCTE 2016, Huawei's Ian Locke speaks with Alan Breznick for an exclusive interview.
LRTV Custom TV
Huawei Future-Oriented Giga Coax Network

10|20|16   |     |   (0) comments

At SCTE 2016, Huawei's Allen Wang speaks with Alan Breznick for an exclusive interview.
LRTV Custom TV
Huawei at SCTE 2016

10|20|16   |     |   (0) comments

Join Alan Breznick of Light Reading and take a sneak peek at the Huawei booth at SCTE 2016.
LRTV Custom TV
Assuring Network Quality in a Rapidly Changing Environment

10|20|16   |     |   (0) comments

As the rate of change and complexity increases in agile networks, the importance of introducing DevOps methodologies for integrating active test and assurance solutions throughout the full service lifecycle becomes critical to ensure that customers are experiencing the service quality they demand. The industry landscape is changing, and software-based test and ...
Telecom Innovators Video Showcase
A10 Networks on Service Providers' Industry Needs

10|20|16   |     |   (0) comments

Light Reading's Steve Saunders hears how A10 enables service providers to accelerate, secure and optimize their application delivery to drive down costs, enhance service availability, and better respond to customer requirements, so they can improve customer satisfaction, monetize their network, and grow revenues.
LRTV Custom TV
New NFV Use Cases for Cable TV

10|19|16   |     |   (0) comments

A large number of NFV use cases are focused on the enterprise domain, looking at virtualization of customer-premises equipment (CPE). To date, there has been little focus on the use cases and business case for virtualization of the video content delivery networks required to deliver unicast and streaming video to consumers. Amdocs commissioned Analysys Mason to ...
Women in Comms Introduction Videos
Meet the Future Workforce: New Faces, Expectations & Motivations

10|19|16   |   5:33   |   (1) comment

Millennials and their younger peers, Gen Z, expect more out of their network and more out of their work. Intel's Lynn Comp shares how the industry can prepare for this new generation of workers.
LRTV Custom TV
ZTE Global Services User Congress 2016 Highlights

10|19|16   |     |   (0) comments

ZTE held its 2nd Global Service User Conference in Dusseldorf on October 13-14. Representatives from network operators, leading industry analysts and ZTE senior expertsattended the event, exploring the best practice in managed services and the vision to transform network operations into the operations center of the future (OpCF) in the software-defined networking ...
LRTV Custom TV
Cliff Grossner on Cloud & Network Synergy From Carrier Service

10|18|16   |     |   (0) comments

Local carriers offer the collaborated cloud and network service that benefits from their understanding of the regulations operating in different vertical markets.
In this interview, Cliff Grossner from IHS Technology talks about how this advanced service can support business agility and flexibility.
LRTV Custom TV
VeEX: Live from SCTE Cable-Tec Expo 2016

10|17|16   |     |   (0) comments

Cyrille Morelle, VeEX's President and CEO, talks with Light Reading's Alan Breznick live from the SCTE Cable-Tec Expo 2016. They discuss DOCSIS 3.1 technology, deployments and early lessons learned. New products on display include the CX350s-D3.1, CX380s-D3.1, CX310, AT2500-3G, FX150 OTDR and MTT WiFI Air Expert.
LRTV Custom TV
Smith Micro's Carrier-Grade WiFi Component

10|17|16   |     |   (0) comments

Join Carol Wilson of Light Reading as she interviews the CTO of Smith Micro, Dave Sperling.
Upcoming Live Events
November 3, 2016, The Montcalm Marble Arch, London
November 30, 2016, The Westin Times Square, New York City
December 1, 2016, The Westin Times Square, New York, NY
December 6-8, 2016, The Westin Excelsior, Rome
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Hot Topics
Attacks Have Major Internet Sites on the Ropes
Brian Santo, Senior editor, Test & Measurement / Components, Light Reading, 10/21/2016
Verizon Wants More Data on Yahoo Breach
Alan Breznick, Cable/Video Practice Leader, Light Reading, 10/20/2016
Layer3 TV Comes to Town, Hints at Future
Mari Silbey, Senior Editor, Cable/Video, 10/21/2016
Oh Snap! Qualcomm Unveils X50, Its First 5G Modem
Dan Jones, Mobile Editor, 10/17/2016
Telecom Italia Plots Digital 'Overlay,' Not Transformation
Iain Morris, News Editor, 10/17/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
There's no question that, come 2020, 5G technology will turn the world's conception of what mobile networking is on its head. Within the world of 5G development, Dr. ...
Animals with Phones
Live Digital Audio

A vital part of increasing the number of women in comms is transforming the ways companies can support and empower women. While progressive company policies that support both men and women in achieving work-life balance are a step in the right direction, creating a company culture that supports those policies can at times be more challenging.

During this show, we'll talk to Lynn Comp, Senior Director of Industry and Sales Enabling (ISE) in the Network Platforms Group at Intel, about why those challenges exist and how companies can overcome them. She'll provide insight into how Intel has worked to create a culture that supports work-life balance, and provide steps and guidance for other companies wishing to do the same. We will also leave plenty of time to get your questions answered live on the air.