Chambers: I Will Fix The Carrier Problem

In an exclusive interview with CRN at the Cisco Partner Summit here, Chambers said Cisco's solution provider partners complaining about service providers selling product at below cost have a valid complaint and that he will deal with the problem personally.

"There is a valid point here," Chambers said. "There are two players who are doing that and are violating our agreement with them. I will work with them to fix it, even if that costs me the relationship."

"I say I'm going to fix it, and I'm going to back it up," Chambers added.

Chambers said the service providers' practice of selling Cisco gear below cost is bad for all parties involved. "Neither my own partner that's getting squeezed on the margins, nor the service provider who installs it, nor Cisco win in that scenario," he said. "We all lose."

Chambers said the problem won't be fixed overnight, and could take six months to a year to be resolved. "I think it's better not to play tough," Chambers said. "Drawing a line in the sand causes people to behave inappropriately. If the [service provider is not winning and Cisco is not winning and our value-added partner is not winning, everybody needs a change."

Chambers said he and other Cisco executives will meet with the service providers and come up with a solution. He said he doesn't want to have to force the situation, but he will if he needs to. "My commitment to the partners is that [Cisco will fix this," he said. "I am committed to getting it fixed."

Chambers said solution providers and service providers need to work together. "The service provider is really after the transmission," he said. "Most of them don't make [money on the attachment, etc. They are after the transmission. And they don't make money on the services, so if there is a way for all three of us to work together, that's the ideal scenario."