Cisco in the News

11 Nov 2012

Cisco has been in the news lately.

Leadership Changes:

SVP Marthin De Beer announces Rowan Trollope as the new head of its Collaboration Technology group. Trollope will be replacing OJ Winge who replaced Barry O'Sullivan last summer. Cisco's collaboration business is suffering from flat or declining sales. In the fourth quarter, Collaboration saw an 8% decline.

Why the business is down isn't clear. Telepresence was hit, or perhaps it is due to Skype.

Video Interoperability and Skype

Cisco had the opportunity to buy Skype, but passed on the deal. At the time the firm was rapidly exiting consumer services which included distancing the Linksys brand and abruptly shutting down its Flip camera acquisition. However, the firm is gravely concerned that Microsoft and Skype together pose a serious threat.

Skype uses proprietary protocols. It always has, and there's no indication this will change. Cisco commissioned a study that concluded government should intervene when products are anti-competitive or undermine industry standards. There is very little controversial about the report itself - it states that interoperability helps the market and end users. What's odd is to be hearing it from Cisco as it is generally the target of such concerns. Cisco only recently joined a video interop consortium (OVCC, though never showed interest with UCIF). It's Telepresence Interoperability Protocol (TIP) was only opened after decree from the EU Commission in exchange for its approval of Cisco's acquisition of Tandberg.

The big miss with Skype is it isn't just a consumer service. Microsoft integrated Skype into Windows 8, and has recently reorganized its Lync product under Skype. Microsoft and Lync combined is a powerful one-two punch that will be difficult to match.

Two vendors have cracked Skype interoperability: Vidtel and Blue Jeans. Vidtel works with channel players and provides seamless integration between most video technologies and can even traverse firewalls. Blue Jeans is similar, but aimed directly at end users and features an elaborate calendaring front-end.

Related: Wah! Wah! Mommy, Skype won't play with me.

CSU Loss

Cisco has also received its share of unwanted attention regarding the 23-campus California State University (CSU) network. This story keeps getting worse for Cisco. First, the award went to Alcatel-Lucent which will be replacing 3,316 Cisco Catalyst switches. That was bad enough, but then it was revealed that the Cisco bid was $100 million more - the statewide ALU bid was $22 million.

The bad news didn't stop there. The San Jose campus was the only CSU school not to participate in the project and gave the business directly to Cisco. The public institution awarded Cisco, also based in San Jose, a $28 million network upgrade contract without seeking any competitive bids. This has put considerable attention on both Cisco and CSU San Jose.

Making matters still worse, internal memos about CSU were leaked. Cisco VP of Services Mike Quinn, a former CIA officer, has made it his mission to identify the source of the leaks. He wrote, "I will now make (finding) you my hobby...ask around (and) you will find out that I like to work on my hobbies."

Now how Cisco deals with such internal matters should be an internal matter. The problem is Cisco has put its own internal culture on display as a blueprint for a collaborative culture. "Trust is more important than ever and moving forward, global collaborative teams will be bonding via video." One might conclude that an angry VP on the hunt could put a damper on its environment of trust.

It's been a rough few weeks at Cisco. On a more optimistic note, registration has opened for CiscoLive this June, and the company unveiled a new strategy to take on patent trolls with "strongly worded" legal claims.


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