People question how can an Internet gear vendor like Cisco
assume that companies of various hues and functions will replicate the Cisco
model. But CIO, Pete Solvik, is a convinced man. According to Solvik, "In
the past year, a common misnomer has suggested that, thriving in the new
Internet economy required a business to simply focus on deploying a web-enabled
e-commerce and customer self service solution. At Cisco, we challenge this
perception. E-business is about reinventing relationships with ALL of your core
audiences, including employees, partners, suppliers and customers, through a
variety of Internet applications to drive speed and agility to achieve higher
customer satisfaction, better financial performance and market capitalization.
Simply put, many e-commerce companies have yet to truly transform their entire
business into a complete e-business, and that is why they have not realized the
success that Cisco has realized with its own solutions. Only through enabling our Internet Business Solutions across all of our audiences, did we realize a $1.4 billion bottom-line financial impact in fiscal 2000."
Cisco religiously believes in outsourcing—be it in services
or manufacturing. Cisco works clearly in an outsourcing manner as far as
integration services for its solutions are concerned. It would rather
concentrate on its core competency—technology development and marketing. Cisco
has 12 manufacturing units, out of which it owns just two. Its Internet
Ecosystem is an alliance of players using the Internet as the medium to prosper
in the new economy. However, there are several challenges due to outsourcing,
especially in services. Traditionally, telecommunications companies have been
buying their equipment from turnkey service providers, in many cases the
telecommunications switch vendors themselves. Cisco, with its IP + vision, is no
doubt making some impact in this space. But it is Cisco’s lack of turnkey
service experience that, many feel, is the Achilles heel in an otherwise good
strategy. But Cisco executives are clear that they will never compete with their
services partners and they believe that, with open platforms in demand, even
telecom carriers would like to have independent service providers like KPMG and
Cap Gemini, with whom Cisco has Ecosystem partnerships.
"The shark" is one adjective that the industry
attaches to Cisco. It has over the last decade acquired 55 companies. It was
realized a long time ago that Cisco itself couldn’t do everything. So, armed
with a $10 billion plus war chest and a wonder kid called Mike Volpi, chief
strategy officer, Cisco has gone forward acquiring various pieces of
technologies found lacking in its repertoire. Famous prizes include Crescendo,
Stratacom, NetSpeed, Monterey, Cerrent, and Kalpana.
Of late, Cisco also has been investing on tech startups. It
has paid over $116 million for stakes in Corvis, Nunce, Uplink Communications,
and ONI, to name a few.
In addition to the above, Cisco has Ecosystem alliances with
industry leaders like EDH, HP, IBM, KPMG, Microsoft, Motorola, and Peoplesoft,
among others.
Every Monday morning Cisco country chief execs. are greeted with a long
distance call. It is their regional head asking for the country’s sales
commitment for the week. The regional head also gets a similar call from the
theater head, who gets a direct call from Chambers himself. This, with the
"Virtual Close"—a concept by which Cisco closes its books every day—keeps
Cisco executives achieving a 55-60 percent growth – year on year. Thus, Cisco
is known for its never ending workdays. Working in Cisco is satisfying but
equally challenging.
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