From Cisco's massive layoffs to see Cisco's nature of the situation

According to foreign media reports, the San Francisco Research Institute Gleacher & Co analyst Brian. In a study by Brian Marshall, Cisco, a network equipment giant, is expected to make a massive layoff in the near future, with a potential job cut of 5000, accounting for about 7% of Cisco's total staff. After the layoffs, the total number of Cisco employees will drop to 73,400.

It is reported that Cisco had planned the layoffs a few months ago, and Marshall predicted that about 1000 of them would retire early and another 4000 would be laid off. Marshall said the layoffs were the third step that Cisco has taken to improve its competitiveness.

Marshall argues that Cisco also needs to take the necessary steps to formally downgrade the company's long-term financial goals and set more specific performance growth forecasts; Cisco's annual revenue growth is expected to be 12% to 17%, but its average annual revenue growth in the past 5 years has been 11%.

Aggression is larger than internal

Chambers and its leading 16-year Cisco, once a Silicon Valley myth, now falls into the abyss.

For Cisco, the four-quarter profit was lower than expected, stocks fell more than 10%, and a large number of senior executives left, these scars tolerated, and the real collapse was the blurring of the future.

After abandoning the video camera flip, Cisco will also have to kick off two acquisitions, which were acquired in 2003 by Linksys, the leading wireless router, and WebEx, the number one network video conferencing company acquired in 2007. This confirms the speculation that Cisco, a restructuring, is planning to quit some of its consumer businesses, including personal networking equipment and web conferencing systems.

If so, it certainly announces the failure of Cisco's efforts to transform its consumer business. 2006, in order to get closer to ordinary consumers, Cisco specifically modify the brand logo, with a simple "Cisco" to replace the "Cisco BAE" words, the original blue-green Golden Gate Bridge Abstract pattern also changed to adopt thicker lines, from professional, rigorous brand image, transition to simple and approachable.

There are many factors contributing to the dilemma. Internally, access to 30 "contiguous markets" fronts has led to problems of strategic loss and slow decision-making. 50 "councils" and "committees" have increased the difficulty and time cost of reaching unified decision-making. At the same time, Cisco's "finger-and-go" in related areas has turned its former partner, IBM and HP, into rivals. To this end, HP acquired 3Com, a comprehensive alternative to Cisco products to provide customers with integrated solutions, IBM OEM sales Cisco main rival Juniper network products. Prior to that, Cisco sold up to $ billions of a year through the two companies that resell its network equipment.

But what is more relevant is the evolution of the external business environment. With the rise of the merged computer and communications network Revolution, the competition for future network equipment burns Cisco's lead. And the biggest threat comes from rivals that Cisco is not unfamiliar with and who has not really noticed for a long time--Huawei Technologies, for example.

"In the past few years, Huawei's products have been neglected by customers because of their lack of stability, but the performance of Huawei's products has improved a lot in recent years through acquisitions and collaborations." In this case, the customer is certainly willing to buy cheap. "A channel trader told the global entrepreneur." Router revenues accounted for 16% of Cisco revenues in 2010, and Cisco routers ' global market share fell from 66% in 2006 to 55% in 2010, according to IDC, a market research firm. In the network security hardware market, its market share also dropped more than 10%.

Chambers is worried about the "expansion of the Web platform to support collaboration, data center, cloud transformation and video architecture, thereby deepening the global relationship with customers, partners" strategy, and stressed that "in addition to strengthening these, we will not do anything else." ”

However, in a market outside the traditional telephone network equipment supply business, Huawei, which specializes in customer relations, has listed companies and government agencies as core clients, and Cisco, both inside and outside, is struggling to withstand both internal and external difficulties.

Old game, new rules

Following the end of 2010, Huawei President Ren said, "in the cloud platform to be in a short period of time to catch up, beyond Cisco, which aims to catch up with Google in the cloud business, Huawei redefined its business structure at its board meeting this January-from traditional product-division to customer-oriented, The company's business is divided into operators, enterprises, terminals and other four major parts. Xu, the executive vice president of Huawei, also serves as the president of the newly established corporate sector. The new department is ambitious: it is expected to double its annual business sales to $4 billion trillion in 2011 and reach $15 billion in 3-5 years.

January 27, Huawei Business Department opened Sina Weibo, a change of the company's secretive style, public awareness of the new business as a strategic location. In the first half of this year, Huawei signed a strategic cooperation agreement with the Shanghai government on cloud computing, as well as a project for China Merchants Bank's telephone bank.

All this, chambers can use his memo to counter: "No other company in the network has such an accumulation of Cisco." For customers, Cisco's value is unique: A global network-centric platform that makes customers more competitive. ”

Indeed, it used to be true. Cisco certification, which covers different levels, content and direction, is an important performance. These certifications are based on Cisco products for training, all the network engineers to participate in the examination will naturally be more familiar with Cisco products. Other manufacturers can not copy Cisco products operating habits and norms, or will be accused of infringement. "When we buy a product, we have to take into account that there are a lot of people in the industry who are proficient in Cisco products, so it's easier to solve problems." "A Cisco user in the Internet industry told global entrepreneurs. At the same time, a sound certification and training system has also created more powerful agents.

But rivals also have the advantage of Cisco. At the end of 2010 's cloud computing conference, Ren stressed that Huawei was trying to change its past "Don Quixote" style of singles, emphasizing cooperation and mutual win-which is more of an ideal. Huawei has never been familiar with the cruelty of reality. In the same period a subject is more than 6 million yuan network equipment bidding project, Cisco quoted more than 5 million yuan, and Huawei only reported 1.9 million yuan. Although short-term losses can be made up from follow-on services, Cisco's listing on Nasdaq is unlikely to be easily involved in this bargain game.

At a critical juncture, Cisco's big business illness delayed decision-making. Discounting is not entirely unworkable, but Cisco needs to consult US headquarters for more than a few times, while Huawei pushes its decision power to the front by "calling for gunfire from those who hear the cannon".

In addition, the cost of manpower has led Cisco to a passive position. In the same region, Cisco's equivalent to Huawei, an engineer with a comparable annual salary of 3:1, directly results in fewer Cisco engineers than rivals. Cisco will outsource most of its after-sales service to agents, and its engineers are mainly responsible for the authorization, that is, the preliminary method of design work. In addition to some big customers, Cisco engineers usually do not go to the scene to solve the problem. This led some small and medium-sized enterprises to feel that "Huawei is more cordial, and Cisco, like the immortal, can't even see." ”

In fact, Cisco's current situation represents the inevitable experience of a High-tech company after a certain period of development. There is no doubt that Cisco is still the Internet industry's recognized technology leader, but in the slow technology turnover, High-tech easy to popularize today, relying solely on technical strength to dominate the market rules of the game is no longer applicable. In a new round of competition, clients are the classic service of services like God, perhaps more effective than the top technology.

(Responsible editor: admin)