Page 3 of 7
From the partner perspective, particularly among the Cisco Gold and Silver partners, going back over the last couple of years, you hit some air pockets, you needed to restructure, there was the supply chain challenge, all of which made it a little frustrating to be a Cisco partner. But, they didn't defect. They didn't defect to HP in large numbers, to Juniper in large numbers; you kept their business. How will you reward them for their continued investment in Cisco and what will they see over the next few years?
Well, I think the most important thing is that we've never varied off of consistency. Every time throughout that, even though you rightly said well look at all the challenges, what people forget is that we see market challenges one, two, three, sometimes four quarters ahead of everyone else.
Fast forward to today. Oracle, IBM, Juniper, HP, Dell. What is their year-over-year growth? Negative 2, negative 3, negative 4, negative 5, negative 8 percent. And remember two quarters ago when Intel said we don't see the problems in enterprise spending and the global environment that Cisco's seeing? Four months later, they miss a quarter by $1 billion. There may be no reward for being transparent, but that's who we are as a company. Through all of this, we didn't falter. We led the industry.
We told you we were going to beat Juniper. Now they're on the defensive. They're really being challenged now. Avaya, who was going to out-execute us in collaboration, make no mistake: they are struggling. We're beating them very bad. And Hewlett-Packard, which said we were going to exit the data center a year after we got into it, well, there's 22.5 percent market share in North America in UCS for us, and it grew at 58 percent last quarter while our peers grew in single digits. Perception-wise, we hit some rough sledding, we clearly did. We needed to change. But our competitors went through the same and did much worse. There's not a challenge I'm aware of that our peers didn't have to go through too.
Look at our competitors from 15 to 20 years ago. You remember the "four horsemen": Cabletron, Wellfleet, SynOptics, Cisco and probably 20 to 40 other companies. How many exist today? All gone except for Cisco. You could say the same about 10 to 15 years ago. All gone, except for Juniper, and right now, Juniper is questionable. And five to 10 years ago, remember it was Alcatel-Lucent, Nortel, Ericsson, Siemens, and they were going to eat our lunch. They said we couldn't spell telephony. Well, we might not have been able to spell it but we got 65 percent market share in business and IP telephony. And more recently, all these competitors who said they were going to pull away from us? We're about 70 percent market share in switching again, and margins are back to where they were, plus or minus 1 or 2 percent.
If a partner had bet their future on any of the peers I just mentioned, would they have a future today? I'd have to challenge you that it would be extremely stressful. Consistency, industry leadership and innovation. If we do our job right, you haven't seen anything yet.
So what does the future hold? We're going to try to move from the No. 1 communications company to the No. 1 IT company. We are the best advisors for our customers, what's happening now has never been more right down our mainline. IBM had that opportunity for the mainframe era. Other companies had that with the mini-computer, including my former company Wang and DEC, and you don't remember a lot of them today because they didn't transition. Later there was Microsoft, Intel and Dell; they were a classic combination. But now, we're at the Apple model vs. Android. We provide the products, hardware and software. Even in an area like UCS where Intel said you could not add additional memory. We clearly did, to the x86 chip. We are company that like any company has weaknesses and flaws, but our strengths have allowed us to break away.
Back to the numbers. In the last quarter, we grew 4 percent. The market had us growing at 4 to 6. Oracle was down 2, IBM down 3, Juniper down 4, HP down 5, Intel down 8, Dell down 8. Tell me: which partner do you want? We're the most partner-centric and loyal, and we're the best growth opportunity for them on top and bottom line together. That doesn't mean we don't have to change -- we clearly do. But, it means that if you partner with Cisco, you partner with a company that doesn't lose. When we need to reinvent ourselves, we do.
I'll be very candid with you: Who do you think has done a better job over the last 15 months? Name one person that's even come close from our competitors.
NEXT: How Does Cisco Become The Top IT Company?
<< Previous
|
1
|
2
|
3
|
4
|
5
|
6
|
7
|
Next >>
