The Cisco Way

• Cisco Itself as the Solution

People question how can an Internet gear vendor like Cisco

assume that companies of various hues and functions will replicate the Cisco

model. But CIO, Pete Solvik, is a convinced man. According to Solvik, "In

the past year, a common misnomer has suggested that, thriving in the new

Internet economy required a business to simply focus on deploying a web-enabled

e-commerce and customer self service solution. At Cisco, we challenge this

perception. E-business is about reinventing relationships with ALL of your core

audiences, including employees, partners, suppliers and customers, through a

variety of Internet applications to drive speed and agility to achieve higher

customer satisfaction, better financial performance and market capitalization.

Simply put, many e-commerce companies have yet to truly transform their entire

business into a complete e-business, and that is why they have not realized the

success that Cisco has realized with its own solutions. Only through enabling our Internet Business Solutions across all of our audiences, did we realize a $1.4 billion bottom-line financial impact in fiscal 2000."

• Will Never Compete with Service Partners

Cisco religiously believes in outsourcing–be it in services

or manufacturing. Cisco works clearly in an outsourcing manner as far as

integration services for its solutions are concerned. It would rather

concentrate on its core competency–technology development and marketing. Cisco

has 12 manufacturing units, out of which it owns just two. Its Internet

Ecosystem is an alliance of players using the Internet as the medium to prosper

in the new economy. However, there are several challenges due to outsourcing,

especially in services. Traditionally, telecommunications companies have been

buying their equipment from turnkey service providers, in many cases the

telecommunications switch vendors themselves. Cisco, with its IP + vision, is no

doubt making some impact in this space. But it is Cisco’s lack of turnkey

service experience that, many feel, is the Achilles heel in an otherwise good

strategy. But Cisco executives are clear that they will never compete with their

services partners and they believe that, with open platforms in demand, even

telecom carriers would like to have independent service providers like KPMG and

Cap Gemini, with whom Cisco has Ecosystem partnerships.

• Acquire, Invest, Partner–Will Do Anything For
  
  Critical Technology

"The shark" is one adjective that the industry

attaches to Cisco. It has over the last decade acquired 55 companies. It was

realized a long time ago that Cisco itself couldn’t do everything. So, armed

with a $10 billion plus war chest and a wonder kid called Mike Volpi, chief

strategy officer, Cisco has gone forward acquiring various pieces of

technologies found lacking in its repertoire. Famous prizes include Crescendo,

Stratacom, NetSpeed, Monterey, Cerrent, and Kalpana.

Of late, Cisco also has been investing on tech startups. It

has paid over $116 million for stakes in Corvis, Nunce, Uplink Communications,

and ONI, to name a few.

In addition to the above, Cisco has Ecosystem alliances with

industry leaders like EDH, HP, IBM, KPMG, Microsoft, Motorola, and Peoplesoft,

among others.

• Virtual Close–Burning The Midnight Lamp

Every Monday morning Cisco country chief execs. are greeted with a long

distance call. It is their regional head asking for the country’s sales

commitment for the week. The regional head also gets a similar call from the

theater head, who gets a direct call from Chambers himself. This, with the

"Virtual Close"–a concept by which Cisco closes its books every day–keeps

Cisco executives achieving a 55-60 percent growth — year on year. Thus, Cisco

is known for its never ending workdays. Working in Cisco is satisfying but

equally challenging.