Page 4 of 5
We in many ways caught the market transition on data center virtualization, and our large peers, by surprise. Much like we did when Nortel, Lucent, Alcatel, Siemens, Ericsson said 'Cisco, you really don't understand telephony, you really don't understand this market.' We didn't do bad. We became the number one player, probably five times the market cap.
The data center in this market has similar characteristics. Make no mistake about it, they see us coming -- this time we're not going to sneak up on anybody -- but this really is the breadth and depth we offer to our partners that no one else does. We are a partner-driven organization. Our other peers, you don't hear that from any of them.
So at the heart, are we perfect? No. Do we occasionally make mistakes? Absolutely. And I want to apologize for the lead times last year and communications with the partners. We clearly hurt them and hurt ourselves and hurt our customers, and it look us too long to fix it. But if you look now, all the lead times, with very few exceptions, are within range where want it, and we've got a different process that, while there'll occasionally be bumps during the year or surprises from a supplier, I think you'll watch us handle it differently. We didn't just handle the transaction, we had a systemic issue. Did we make a mistake? Absolutely. Did it take us too long to fix it? Absolutely.
How often are you meeting with partners?
Pretty often. When I'm on the road, it's probably a partner a day, minimum, and sometimes large groups of partners. Candidly, just like we did at the WEF and then in the U.K., I met with industry analysts who knew the partners and they talked about what we needed to do differently with our partners. I used to go there to sell, and try to get out without getting scalped, and now I go to listen: what are we doing right, what do we need to change.
That's one of the fundamental changes that I think is occurring not only at Cisco, but I think business organizations and governments worldwide. We're moving from command-and-control, which, candidly, we're really good at doing and which I love. But we're moving to collaboration, teamwork, social networking capabiliites. First, I think it's inevitable. I think work will come to virtual teams -- that's where productivity is going to occur. But the cool thing about it is, it sells a lot of networking stuff. These transitions are all enabled by video, cloud, Videoscape, security, wireless -- they all come together, and it is about changing the business model.
Not only are we pretty good about the market transitions, but if you watch, we're always one to three quarters ahead of our peers on market transitions. They say, 'We're having no problems there.' They do. And occasionally, we'll just miss. But it's not too often, [and] if we do miss, we'll get back on. Cisco's track record in that is unequaled, and while we have a lot of limitations, that's not one of them.