Posted by: rosler28 | July 31, 2007

Cisco news and rumours: good and bad?

Well I’ve been back a couple of days now so I’m just catching up with the news, the first company to catch my eye was Cisco. Some I thought was good news for Cisco, maybe some bad.

The good:

I’ve written a few times that Cisco is one of the few large networking/software organisations to understand the importance of web2.0 within the enterprise. Evidence of this can be found in the many words of John Chambers but also in money with the acquisitions of Tribe, Five Across and Webex. An interesting rumour comes from TechCrunch today suggesting that Click.tv technology may be integrated into Cisco technology. If true I’d put this down as an intellegent purchase from Cisco. Click.tv gave users and content providers the ability to add notes onto video. Although video isn’t used a tremendous amount in the Enterprise at the moment I’m willing to bet within five years video within a company intranet will be huge. Click.tv could be the technology that enhances and catorgorises the video content.

It’s only a rumour but if it turns out to be true it’s a smart move by Cisco as they would be well ahead of the Enterprise technology curve.

Now for the Bad:

Cisco are the blue ribbon marketeers in the Enterprise technology field but I don’t understand their rebranding of Linksys to a Cisco badge. Cisco is exclusively an Enterprise only brand, consumers don’t buy Cisco. Because of this I think Cisco branded products carry a heavy premium, Cisco manage their resell channels well and they don’t have price conscious consumers and retailers discounting their equipment. This hasn’t been the case for Linksys who as a business unit are much more adept at understanding the consumer technology market which tends to be much more price sensitive and competitive.

So I’m not sure what the rebrand would achieve:

  • Cisco is almost unheard of within consumer markets so I doubt re-branding to Cisco will generate any competitive edge within the consumer technology market. Perhaps Cisco make the case that consumers can be enterprise quality at home?
  • Rebranding away from Linksys allows a loyal market to change technology provider. Consumers tend to stick with a single networking brand at home. Purchasing a Linksys router leads on to buying a Linksys wireless access points and file server etc etc. There may be a short blip as consumers feel dislocated from the Linksys brand.
  • For me though the most damaging problem has to be the potential for Enterprise customers to seek reductions in Cisco premium pricing. I know many network teams who believe that the technical differences between a similar Linksys and Cisco product is small – almost too small to justify the large price differentials. However they have not taken the risk because if a Linksys switch were to fail they feel exposed to executives, with the rebrand it will be a Cisco switch that fails thus removing the exposure for the network team.

Product ranges that could be affected: LAN switching, small office routers, WLAN and perhaps most importantly Linksys has a small IP phone PBX that competes with Call Manager Express, I wonder if Cisco will be brave enough to rebadge the Enterprise type Linksys product or merely retire them and concentrate the former Linksys brand on specific consumer products. I think this could be a kind of difficult thing to do but as I said before if anyone can pull off product marketing Cisco can.

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