Cisco Systems' third-quarter numbers for its current fiscal year reveal a company that has run its switching business aground and has become too dependent on the public sector for its revenues. When discussing the results, the company's top brass said that Cisco would be lightening its load – in terms of products and people – to …
Cisco’s data center sales sequentially declined during Q3FY11
Cisco’s much ballyhooed data center sales sequentially declined during Q3FY11.
Stunningly in my opinion, sales of the ultimate “phoenix” in Cisco’s new product reporting category – data center sales, sequentially declined by -$41 million during Q3′FY11.
This is noteworthy (again in my opinion), because it’s the first sequential quarterly data center sales decline since Cisco began reporting its new product category, which started with Q1′FY10.
Until Q3′FY11, data center and services had been the only 2 sales categories at Cisco (since it reorganized its sales reporting), to never of had a sequential quarterly sales decline.
Well . . .
. . . what did they think was going to happen when they bought Linksys? They brought a knife to a gun fight. A dull one at that.
Nothing new there then
It's several years since I got my Cisco certs and the first time I was tasked with specifying some equipment I priced up the appropriate Cisco switches and noticed that Netgear equivalents were around a third of the price. I can't help wonder how much of Cisco market share is actually down to CCNA etc being so widely recognised, and people with those certs simply recommending the devil they know irrespective of whether they represent the best choice.
The company still made a profit, and it is being cast as a problem. Have they looked outside their windows in the boardroom? The world is still enmeshed in the results of the economic collapse, and therefore many products are not selling.
Yes, they certainly can reorganize and try to do better, but to run around like the sky is falling when they are postiing a profit is almost comical.
Face the facts guys, if you are not a company creating things the people must have, and you are still showing a profit, it's okay to focus on improvement, but you are still profitable, and that is a major acheivement in this economy. This is why most mergers and acquisitions are a bad strategy. In the end, the only thing they do is cut the number of options available to the customer and further cut employment.
Idiots at Exec Level for buying Flip for half a Billion...
... then close the buisness, on realsing it was a stupid purchase, since everyone already had camera built-in to their phone.
So to recoup the half BILLION dollar losses for their stupidity, the Execs fire the staff whilst they get to keep their fat bonus cheques.
They might sell more if they dopped their prices....
Cisco make some good kit. Unfortunately, their pricing is frightening. We thinking of taking space in another data centre and would consider Nexus if they weren't so damn expensive.
Not sure I'd agree with the analysis about cheap switches...
It's not cheap switches that are hurting Cisco - it's the expensive switches that aren't moving. And when the expensive stuff doesn't move, customers that are used to single-vendor solutions stop buying the mid- and low- end stuff too.
Cisco has moved their data centre network architecture from three-tiers to two with the Nexus switches, but their competitors (Juniper and Brocade) have moved to a single tier that combines all the features and performance of Cisco's two layer model without the additional cost of the second tier. Cisco also rely on custom silicon which has allowed competitors who rely on off the shelf parts (i.e. Broadcom's Trident range) to catch up to and surpass Cisco's port density and performance.
Cisco has a competing architecture ("Jawbreaker") but they are losing out in the meantime.
More people into the wood chipper
Most companies these days have all drunk the Jack Welch grape juice and the first thing they do is layoffs. Cisco is still making a profit, just not as much as they'd like. It's a morally bankrupt position and makes "Our people shape our culture, our innovation and our success. " hard to listen to without cynical laughter. Why should a company that's not loyal to its employees expect loyalty from its customers?