There's a lot of talk in the market about data center architecture. HP has an architecture, Brocade has an architecture, Juniper has an architecture, Avaya has an architecture, Enterasys has an architecture, and so on and so forth. But Cisco was talking conceptually about architecture years ago. How is that that helping you now, from a sales perspective?
The advantage of having been down this path for a longer period of time is that a lot of what's happening now is about cultural change -- it's not just marketing. Systems are going to have to come together for a customer in all of [his] business segments, but what you see out there is a lot of ‘slideware’ that just looks like an interesting architecture. Our engineering around architecture [addresses] a cultural change.
Years ago, we talked about how it would take some time for customers to feel ready to have that architectural discussion because they'd been in a product mind-set for ages, same as the VARs were. So now that they understand the benefits of things like virtualization more, are they more receptive to that conversation?
Yes, and let me do an analogy to what happened in the voice market. One of the biggest catalysts to accelerating VoIP was organizational change. Customers starting recognizing that by separating their data groups from their voice groups, they were making sub-optimized decisions. When they brought those groups together, they were making better decisions. It's happening in the data center now. Traditionally you have very siloed organizational structures, but now you're seeing customers say they have to make better buying decisions by focusing more on the architecture vs. point products.
So that shift has happened??
It has. But it's not something that happens overnight -- it's small steps.
Another thing we hear so much about is the fact that partners are no longer selling IT to IT people, they're having conversations much further up the food chain, especially as architectural buying becomes a line-of-business decision that involves the CEO and CFO. Conceptually this is something we all talk about, but is it actually happening in the sales trenches?
It's hard to say that it's happening across the board. There are always three major pressure points that affect which way the pendulum swings. One is the cost pressure, which is always there but which changes in intensity and sometimes moves decisions up to the C-level. Another is agility. Customers want to move faster and want the IT equation to be one that helps them move faster. SaaS, for example -- a lot of the time, that's an agility decision. The third one is talent. Right now there is incredible pressure to get access to the talent needed for these market transitions, and once customers can't attract the talent they need, they naturally look to the VAR community to help them there.
Cisco's emerged from a long year of restructuring and reorganization. Is your team pretty much in place at this point?
If you ever think you're done with change, you're probably pretty close to extinction. This is a multiple-year journey for Cisco, and we're going to have to constantly evolve -- we're still in early days with the next Cisco. We have done things that some of our competitors are struggling with, including making sure we have costs in line and getting our business strategy articulated.
Are you making more decisions more quickly, as hoped?
We have greater clarity about what our priorities are and who has the power to make what decisions. We've made tremendous progress there.
Does that mean fewer people making the calls and a faster time to decision? Fewer people that need to say 'yes'?
There's a clarity of who owns what decisions. To use Americas as an example, Chuck Robbins can make the call across multiple theaters as well as what we do on the direct side of the business as well as to the partner base. We've made calls in a number of hours or days that in the past would have taken weeks. We've had a lot of people who can say no, but it was not always clear who could say yes. You do want to consult a lot of different perspectives, but ultimately there is one person who makes decisions.
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