LAS VEGAS John Chambers, Cisco Systems president and CEO, called himself an optimist at the company’s Partner Summit.
Chambers, in his keynote address, said that productivity, focusing on the customer and consolidation would
be three key strategies for Cisco and its partner base going forward.
“”If you look at where we are headed overall, we’ll focus on technology from the customer perspective. See how they see technology on the CEO level and on the CIO level. I am an optimist in this industry,”” he said. “”This is why I can believe you (the partners) can drive productivity in a country by three to five per cent per year, which means you in your own company must drive five per cent or better.””
Chambers said that after talking with Spain’s president, Jose Maria Aznar and U.K. prime minister Tony Blair, he came to the conclusion that if a company or country does not drive its productivity it will not drive growth. “”There is a 99 per cent correlation to this and it drives up a high standard of living,”” Chambers said.
Cisco’s productivity growth target is 30 to 50 per cent or two times more than its competitors.
Rick Reid, president of Tech Data Canada of Mississauga, Ont. agreed 100 per cent with Chambers on increasing productivity.
“”That is exactly what we are doing within Tech Data. We are trying to get more productivity per person,”” he said. “”We have been measuring this for two years and if we compare ourselves to other countries, Canada has not preformed really well in that area, but as of late we have increased that dramatically. I was pleased to here that from Chambers.””
Besides being 100 per cent customer-driven, Chambers also believes in building a strong company culture, using your own technology, and making sure all networks have a common set of quality standards as keys to Cisco/partner success.
Citing a Solomon Smith Barney report, Chambers said that the No. 1 thing for networking partners is to deliver service and support. After service and support, an end-to-end architecture and a good price and product was second and third in the report.
Cisco has changed it’s business model in the last two years from volume to value and a focus on partners is not something new for the company, he said.
Focusing on partners, he said, started 12 years ago when Cisco was part of the Internet revolution.
“”We felt that the company that did the best here would breakaway. I wish I could tell you something different, but the industry will consolidate and you can go with it or be left behind.””
He called the industry consolidation “”brutal.”” Cisco partners were no exception. Approximately, 6,600 partners were reduced to 3,400 from a few years ago. The 3,400 partners are currently certified with Cisco but, Chambers expects that another 500 or more partners will become de-certified this year.
“”I believe in being a partner for life; not for convenience,”” Chambers said. “”Partnership is an integral part of our strategy. However, there are too many partners going to market for the opportunities in the marketplace. This is why there was consolidation in the partner base. The consolidation has left 40,000 Cisco partners uncertified around the world.””
The 3,400 partners that remain Cisco certified deliver 87 per cent of Cisco’s overall business. “”This (type of performance) makes us relevant,”” said Paul Mountford, vice-president of worldwide channels for Cisco.
Murray Wright, president of Ingram Micro Canada in Mississauga, said consolidation helps Cisco in the markets the distributor plays in. “”I think it helps them focus on key players who can service the end users,”” Wright said.
Wright believes that Cisco’s strategies will help Ingram Canada in the long term.