Cisco Is In The Midst Of Some Major Repositioning

Dan Bieler

As the digital economy gains momentum, CIOs will have to reassess and evolve their technology vendor portfolio. CIOs need to evaluate if their main technology vendors support the required new business practices and focus on crucial technologies.

Cisco has made massive investments in its portfolio and go-to-market strategies that help to sustain its role as a preferred vendor to most of its clients. We believe, however, that Cisco still has some distance to travel to transform its skillsets and business culture to become a truly strategic technology provider. The recent leadership transition offers Cisco the opportunity to redouble its efforts to strengthen its digital and customer experience skills, flatten its corporate hierarchies, and build a strong digital ecosystem of software and services partners. Our main observations when scrutinizing Cisco as a vendor in the emerging digital ecosystem are that:

  • Cisco is on the path to becoming a partner of the CIO's technology agenda.Cisco has launched programs to change its operational setup, its business culture, its compensation incentives, and its skillsets. Its willingness to disrupt itself positions Cisco well to eventually transform from a network business into a global BT provider.
  • A gap remains between top management's vision and Cisco's go-to-market pitch.Cisco's vision to transform from selling networking boxes to selling architectures, solutions, and business outcomes is spot-on. However, we still perceive a go-to-market approach focused on engineering and products. This disconnect remains a challenge to becoming a strategic technology provider.
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Huawei Analyst Summit 2011: Extending The Competition To Mobile Devices And Enterprise Solutions

Dan Bieler

During its European Analyst Summit in London, Huawei provided details regarding two crucial elements of its expanding market positioning: It outlined its intention to launch mobile devices and enterprise solutions. Although Huawei has been engaged in these activities in China for some time, it is a new and exciting step for its European strategy. Competitors should not underestimate Huawei’s ability to take business away from them in these areas.

Huawei’s mobile device range for Europe is small, but very effective. The company targets the low-end smartphone segment with a €100 device (Blaze), the mid-market (Vision), and high-end (Honour), in addition to a tablet (Media Pad). The marketing strategy is to position these devices as affordable, easy-to-use, and reliable (i.e., the “Volkswagen of the mobile devices”). All devices are touch, have fast processors, crisp screens, and retail at about €100 below competitors’ offerings. Timing is good for Huawei, given the relative weakness of the competitive landscape, especially RIM and Sony Ericsson. Initial customer feedback on sites such as Amazon.com reflects positive customer experiences.

The fact that Huawei has no consumer brand in many European countries should not be a great obstacle. Rather, Huawei could use this factor in order to involve its emerging customer base to build a brand using social networking and viral marketing. Traditional big-board advertising campaigns would be pointless: Nokia will dominate the traditional channels with its Lumia campaign in the coming months. The main channels for Huawei will be MVNOs like Fonic, consumer electronics outlets like Phone4U, as well as selected larger operators.

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