Cisco Partners: Timing Was What Killed Cius

If timing is everything, than Cisco's Cius tablet was a swing-and-miss: It misread the rising tide of BYOD and the dominance of Apple's mighty iPad, and its Cius missed a key window of opportunity thanks to Cisco taking nearly a year following the launch for the Cius to reach general availability.

That was the consensus of several major Cisco solution providers interviewed by CRN in the wake of Cisco's decision to stop investing in the Cius, which Cisco confirmed in a corporate blog post late last week.

Technically, it's not a kill-off. Cisco's O.J. Winge, senior vice president, TelePresence Technology Group, said in the company blog that Cisco would continue to support Cius customers and would offer Cius "in a limited fashion to customers with specific needs or use cases."

[Related: End of the Line: The All Too Short History of Cisco's Cius ]

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But for Cisco observers who had visions of Cisco tablet dominance dancing in their heads when Cius was released two years ago, Winge's blog post is a death knell. Cisco, for its part, has already begun shifting investment dollars to key UC priorities like its Jabber platform, and Cius will now begin a long fade into obscurity.

"I think it was inevitable," said Jason Parry, practice director, unified communications for Force 3, a Crofton, Md.-based solution provider. "The response for Cius, from what we saw, just wasn't great. It was a good concept, but I think from a timing perspective, it was just a little too late. The reality is that customers' employees are bringing in iPads."

"I wasn't surprised at all," said Gary Alexander, CEO of Alexander Open Systems, an Overland Park, Kan.-based solution provider. "Apple just has too much of a head start and too much market share, that even with a great product like Cius, when you're that late, and it's such a narrow market, it's hard to bust in. I never believed they would make the progress they hoped to make. It was just a day late and a dollar short."

Brett LaCourse, senior market development manager at Teracai, a Syracuse-based solution provider, said Cius was a very small piece of Teracai's business: Roughly a dozen customers and about 100 units deployed, he said, with many of those seeded to corporate users as a way to gauge demand.

"I remember two years ago at Partner Summit, you heard about Cius in every other session, and this year, I want to say I heard about Cius exactly twice," he said. "It's just clear there wasn't much demand."

Cisco did not respond to requests for additional comment on the Cius announcement.

NEXT: Cius' Brief History

The Cius was unveiled in June 2010 as Cisco Live: a dual-camera, feature-loaded Android tablet that Cisco said would support 802.11n a/b/g/n Wi-Fi, 3G, and in the future, 4G. At the time, the feedback from Cisco channel partners was roundly positive, centered on the promise of a custom-fit, purpose-built UC endpoint for Cisco's market-dominating unified communications products and services.

But, there were problems almost immediately with getting Cius to market, starting with the fact that Cisco remained cagey on pricing, didn't indicate exactly when Ciuses would become available for partners to sell and didn't articulate an effective value proposition as to why Cisco would be a necessary enterprise alternative to the iPad.

"The things Cisco was looking to do at that time you couldn't yet do on an iPad, including the cameras and the high-def display and all that," said Zeus Kerravala, principal analyst at ZK Research. "And back then, the jury was out on BYOD -- a lot of CIOs just didn't want to do it. Now, 'don't want to' doesn't matter. They have to. So that's a big contributing factor."

It wasn't until the fall of 2010 that Cisco finally committed to a release date -- March 2011 was when Cisco partners with Master and Advanced UC designations finally got to start selling it -- and began to confirm carrier partners, including Verizon and AT&T. Though Cisco steadfastly maintained that the Cius wasn't delayed, the tablet did not hit general availability in the channel until July 31, 2011, more than 13 months after it was first announced. Pricing eventually landed at about $650-$700 per Cius unit depending on volume discounts, and that didn't include the Cius' $400 docking station.

Still, there was no shortage of Cisco fanfare. As No Jitter's Eric Krapf and others mentioned, Barry O'Sullivan, senior vice president and general manager of Cisco's Collaboration Technology Group, told an Enterprise Connect audience in March 2011 that the Cius would be Cisco's largest-selling endpoint in a year's time.

At a media event in New York in June 2011, Cisco sought to portray the Cius as being truly enterprise-centric thanks to the security features it had on board and how it was pre-validated to work seamlessly with Cisco infrastructure and Cisco partner products. There was also an emerging app dev and ISV story around App HQ, an application storefront hosted by Cisco in the cloud, that would help enterprises choose and distribute the business apps most important to their businesses.

NEXT: Cisco Cius Decision A Smart Move, Say VARs

Hard numbers on Cisco Cius sales weren't easy to come by, and partners told CRN as far back as last summer that customer interest was tepid, at best, especially with Apple's second-generation iPad having arrived. When Cisco continued to tout Cius at its Collaboration Summit in November, Cisco executives told CRN as recently as last fall that the Cius would remain a focus of what Cisco called a $42 billion TAM in collaboration for Cisco solution providers.

As late as December, Cisco was telling reporters that Cius sales had "met expectations" and that bigger- and smaller-form factor versions of the Cius were in development for the new year.

But by the time the Cisco Partner Summit kicked off in San Diego in April, the Cius was nearly invisible, and Cisco had shifted much of its key collaboration discussion to Jabber and how to quell the threat from Microsoft's suddenly-scary Lync UC platform.

"When we had Collaboration Summit in November, Cius was everywhere -- you couldn't get away from it," Force 3's Parry said. "Then, by the time we got to Partner Summit, it had basically disappeared."

The O.J. Winge blog on Cius' fate came less than five weeks later.

AOS' Alexander said Cisco's Cius decision is a smart move -- one Cisco had to make.

"The old rule of holes is: when you know you're digging yourself into a hole, stop digging," he said. "It was, 'Yeah, we made this huge commitment to Cius, but it isn't working. So let's stop digging this hole.'"

Alexander said AOS had little, if any, success with Cius, but that AOS chose not to push the tablet too hard because they didn't want it to look bad for customers if and when Cisco decided to de-emphasize it. Other solution providers were in similar situations, including Force 3, which sells primarily to federal government customers.

"We had a lot of conversations about it. We talk a lot about BYOD, and federal is a little behind that trend, so you would have thought that Cius might have been a happy answer to the question," Parry said. "But the answer from CIOs always seemed to come back to iPad. They want to use that, and they wanted things in the display and things around VDI that Cius sort of fell short on. We just had very limited demand for it."

NEXT: VARs View Cius As Indicative Of Cisco Changing

The timing of Cius to market didn't help Cisco, solution providers agreed. The hype around the device dissipated pretty quickly, especially with so many other vendors launching tablets and Apple coming to market, in March 2011, with the second iPad.

"When Cius launched we had all that anticipation. Then you had that long delay in getting it to market," Force 3's Parry said. "We lost the window of opportunity. Once iPad 2 came out, it just kind of killed that conversation for us. We were talking with customers about the [Cius] concept, but it was, 'Oh, by the way, you can't get it for a year.' People got frustrated and started to look at other alternatives."

Other Cisco partners see the Cius decision as an important admission by Cisco that, much like the company's other priorities around its restructuring, proves it's re-focusing on the right things.

"The market dictated that would happen before Cius even took hold," said Steven Reese, vice president of collaboration and security architectures at Presidio, a Greenbelt, Md.-based solution provider. "Cisco recognizes that they're starting to look like a software company and they need to go after the software market."

"It does signal a different Cisco," ZK Research's Kerravala said. "Historically, Cisco would have gone to the wall with this product -- they'd want to control the experience and think the only way to do that was by owning the device. That was one of the reasons they bought Flip, I think. But you don't necessarily have to own the device to control the experience. Being able to have your interface on the iPad reaches orders of magnitude more people."

Cisco will ultimately benefit by placing Jabber and its UC wares in as many mobile device contexts as possible. It's pointless to compete head to head with the iPad, Kerravala argued, if you don't have a better mousetrap.

"If you're not Apple, it's over. You're going to be lucky to get one to two percent market share," Kerravala told CRN. "Someone would have to make a device that's substantially better than the iPad to get anyone to even look at it. There are always a handful of people that are going to go against the grain, but from a Cisco perspective, it appears they decided, if we can't beat 'em, join 'em. Apple's no threat to the rest of Cisco's business."

"I see a day when I can dock my iPad, and it's my high-def video endpoint, and it's not a PC or a Mac," added Presidio's Reese. "So Cisco taking those dollars out of Cius and prioritizing to make the software more relevant will help make them become more relevant very quickly."

NEXT: Cisco's Attention Shifts

Cisco is hardly alone in the ranks of the tablet also-rans. HP famously killed its TouchPad tablet after only a few months of availability, and while Avaya has said it will continue to support its Avaya Desktop Video Device (ADVD), it's also touting iPad-ready UC clients. Solution providers have described the ADVD's sales as lukewarm to nonexistent.

Other non-tablet vendors with large stakes in the UC space are also making shifts. For example, Polycom recently made the first major branding change in its 22-year history, emphasizing its burgeoning software businesses while planning to divest hardware businesses such as its wireless phone unit.

Under these market shifts, Cisco has prioritized Jabber as one of its important UC and collaboration market plays.

At Cisco Partner Summit, Cisco confirmed Jabber for Everyone, an offer in which it will make presence and IM capabilities and Cisco Jabber clients available at no additional licensing cost to Cisco customers.

Cisco partners said that move is crucial to speeding up deployment of Jabber for customers, and it will help Cisco against the rising tide of Microsoft Lync.

"Jabber is the answer -- that's the product that will be offensive against Microsoft Lync, and that falls much closer into their wheelhouse. I think Jabber will be a success," said AOS' Alexander. "Microsoft is a real threat. Cisco recognizes it's a real threat. We have a lot of customers not just asking us about Lync, but saying, 'We're going to move in that direction.''"

"We're talking to clients doing Lync and asking them how they're going to incorporate a video strategy into that, and then we start to talk about Jabber on the iPad and the early field trial testing, and clients can see real benefits in capabilities Cisco is demonstrating now," Presidio's Reese said. "I'm not hearing about Microsoft making investments in the near-term to do complex intelligent video [integration] -- they're relying on Polycom to do that integration for them. Any time you have a new integration point, there's a finger to point and a place to break. Cisco can tell that story. Customers have bigger problems than what Lync can solve now."

Cisco is looking at the right ways to compete with Lync, ZK's Kerravala agreed.

"Cisco needs to walk the walk as a software company. To me, Jabber is the most feature-rich of the UC platforms for the post-UC world," he said. "Cisco spent a lot of time trying to figure out how to get this onto Android and iOS, and frankly, that's the right strategy for them. It's going to come down to Microsoft on the desktop versus Cisco in mobile. Cisco's opportunity is in things that aren't tied to the desktop."