Wall Street: Cisco’ Investors Need a Switch…Additional Perspective

April 7, 2011 — 1 Comment

If you sell, you should be reading Wall Street…that is, if you want to call on decision makers.  This morning’s article on Cisco is important information if you resell Cisco, especially when your clients start asking, “Should we stay with Cisco?”  Statements like:

  • …shares languishing at 1998 levels
  • …the company’s problems run much deeper than a few disappointing quarters
  • …a byzantine management structure
  • Mr. Chambers…seems to be repeating mistakes.

These are tough accusations.  In Rolfe Winkler’s article he notes that most of Cisco’s revenue comes from core networking, and Juniper is taking market share.  Is the product bad?  I don’t think so – core networking is a commodity business and Cisco has been the long standing champion and has delivered strong networking technology – still does.  I can’t comment on the reasons why market share is slipping – perhaps Wall Street has a good handle on this.  However, my video recorded just about one hear ago – The History of the Channel stands out in all of this.  The reseller must have a value proposition that does more than point to a vendor’s product.  Recent Cisco acquisitions and their move away from security over the past decade (which I see is starting to rekindle) have put resellers in competition with their other vendors (like HP), but have not given them discontinuous innovation to take to market (such as Unified Communications eleven years ago).  This has placed the Cisco resellers in the middle of Geoffrey Moore’s Technology Adoption Life-Cycle, where margins are at their nadir, and competition – it’s zenith.  What is the solution?

Your value proposition must proceed the product sale.  Helping clients solve business problems is a business level sale.  Technology is used to help solve the problem, but only after the theory has been sold.  None of this depends on a vendor brand…their brand “stamps” stability on the solution once that phase of the project comes into play.  So what should resellers be selling?  Risk mitigation, ROI, Efficiency, competitive advantage…the same 4 things I’ve been writing about for years.  It’s your brand that matters at the start of the sale, and your position as an adviser will largely determine which product gets the budget.

I’d love to hear your comments on this article!

© 2011, David Stelzl

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One response to Wall Street: Cisco’ Investors Need a Switch…Additional Perspective

  1. 

    Cisco makes a fanatstic product, I have always been happy with my purchases. I even buy used and refurbished Cisco routers and switches.

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