Cisco takes on transformation

The evolution of network communication infrastructures that become the underpinning for much more successful businesses emerged among the key themes evangelized at the recent 2004 Cisco Systems Inc. Worldwide Analyst/Media Conference.

This focus on business transformation through the utilization of networking technology is something of a major shift for an IT vendor that has focused on products and IT “plumbing.”

But such transformation comes only to the chosen few — essentially the top 100 global accounts serviced directly by Cisco, which have been exclusively identified as those eligible for the company’s network transformation services. Wim Elfrink, senior vice-president of customer advocacy, described these comprehensive services and characterized them as the means for businesses to rapidly deploy the latest and greatest in Cisco communication infrastructures. Touted as “hyper-integration” services, the effort involves Cisco’s crack teams of engineers and experts who work directly with select customer technology deployments throughout various stages of planning, design, implementation, operation and optimization of the Cisco networks.

These new architectures, which utilize Cisco’s core routing and switching, as well as the company’s Advanced Technologies including storage, security and wireless, are intended to support a businesses evolution to applications and processes, which enable new function and might also improve a company’s process efficiency and productivity. At least that’s the theory behind why a customer might choose to utilize this expansive array of technology.

The proof in the pudding extolled by Elfrink was a range of cited statistics culled from previous network transformation engagements, which touted: an average 15 per cent increase in business agility (measured by time-to-market in a company’s ability to roll out new applications, processes, business services, products etc.); an average TCO reduction of 20 per cent; and an average increase in network availability by 30 per cent.

The bottom line — from Cisco’s perspective — is the ability of network transformation services to help Cisco grab what Elfrink described as greater customer “wallet share.” He cited an anecdotal example where a Cisco engagement with an unnamed large retail customer grew from US$2 million to US$80 million, thanks to a network transformation services deal. “Transformation services are really aimed at deepening relationships with customers (and) positioning Cisco as a much more important strategic partner,” Elfrink said. He explained that the company’s global strategic accounts — the top 100, which include approximately 70 enterprise businesses and 30 service providers — are the customers for who network transformation services will be offered.

The long-awaited promise of six new Advanced Technology areas won’t be declared any time soon. Cisco’s highest percentage of business growth has been achieved in six areas of what were revealed as Advanced Technologies, which include: IP telephony, storage area networking, security, wireless technology, optical networking and home networking.

Advanced Technology markets have become key areas of future product direction and company business growth, and represent the foundation of Cisco’s forward-looking strategy. Chambers had earlier this year promised to reveal six more new areas by the end of Cisco’s fiscal year end in July.

Giancarlo was asked, during a media luncheon on Dec. 7, whether Cisco is prepared to finally declare the next six Advanced Technology businesses. He admitted that such an announcement would not be forthcoming, and further suggested the company was loath to declare its new areas for fear that competitors might likewise become highly effective entrants in these new markets. Instead, Giancarlo admitted it is more likely that Cisco will more selectively reveal new Advanced Technology businesses — on an individual basis, when the company deems the timing right.

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