US network equipment maker Cisco's development in China has been hit again

Absrtact: Cisco, the US network equipment maker, has suffered a heavy blow in the Chinese market. Cisco had been removed from the government procurement list yesterday, according to the official website of the central Government Procurement center of China's State Government procurement agency, which means Cisco could lose a lot of political

Cisco, the US network equipment maker, has been hit hard again in the Chinese market. Cisco has been removed from the government procurement list, which means Cisco could lose a large number of business clients, according to the official website of the Government Procurement Center, a central government procurement agency, in Beijing yesterday. Industry experts pointed out that this is the "Prism Gate" the continuing impact of events, with the increasing importance of information security in various countries, the future trend of Chinese government procurement of domestic enterprises will become more and more obvious.

Cisco Outs

Yesterday, Beijing Commercial newspaper reporter Log in to the central government Procurement network, noted that the latest procurement list has been the traces of Cisco, especially network switches, network routers two categories are not Cisco products in the column. You know, Cisco in the network equipment market is a leading enterprise, this is really a sad exit.

In fact, according to a British Reuters analysis of the changes in China's government procurement list over the past two years, the number of items on the government procurement list has increased by more than 2000, with a total number of nearly 5,000, but the increase is almost entirely local, while the number of foreign technology products approved for the purchase list has slipped by 1/3.

Among them, Cisco is the first to be the first. According to Reuters, a total of 60 Cisco products were on the list of China's central government Procurement Center in 2012, a figure that plunged to zero in the 2014 procurement list. In response, Cisco's official response to the Beijing News reporter did not explain the specific reasons, saying only that "Cisco's foothold in China is very robust".

"It's not hard to understand that Cisco's exit is largely due to China's consideration of its information security strategy, which has been involved in the world since the Prism gate was exposed, and has even been questioned about ' Accomplices ' suspicion, so countries including China began to increase the vigilance of US enterprises such as Cisco, more attention to national network information security, so reduce the use of Cisco network equipment, the Government procurement list to remove it is also understandable. Xiang, a communications expert, said in an interview with the Beijing Business Press.

China's regional performance frustrated

Observers pointed out that the government procurement of this vane after the issue, China's big state-owned companies and local governments, which soon will be in the market for their own livelihood, are likely to follow suit, as a result of which Cisco is expected to suffer a significant loss in the Chinese government's corporate sector, which is clearly a traumatic experience for Cisco in transition.

Beijing newspaper reporter in carding cisco in recent fiscal quarter of the financial time to note that, despite the fiscal year 2015 in the second quarter (as of January 2015) net profit growth of 67.7%, the main reason for the good figure is only 1.4 billion U.S. dollars in the same period last year, and prior to this, Cisco net profit has been falling for five

Of these, in the last six or seven seasons, Cisco's performance in emerging markets such as China and Russia has been sluggish and stagnant, dragging down overall performance growth, although Cisco has not given its specific revenue earnings figures in the Chinese market, but Cisco's CEO Chambers has repeatedly cited emerging markets as underperforming.

It's worth mentioning that Cisco's executives in recent years, including CEOs, have repeatedly clarified publicly that Cisco is not a part of the U.S. government's "Prism" program, and that it has not "door" the Chinese government and consumers on its routers. This also can be seen Cisco because of "prism door" incident in the Chinese market face pressure. This has been removed from the Chinese government procurement list, and naturally to its development in China worse.

Domestic trend

In Xiang's view, with the implementation of the national information security strategy, more and more American brands will be marginalized in the government procurement list, even as Cisco is excluded. In view of this, other foreign brands still on the procurement list may have to be careful.

At the same time, government procurement will tilt to domestic brands to support, this is not only for information security considerations, on the other hand, Huawei, ZTE and other domestic manufacturers in the network equipment manufacturing, software services and solutions and other areas of competitiveness is also increasing, and gradually get rid of dependence on foreign products.

As early as last May, the Central government Procurement center made clear that all computer products were not allowed to install Microsoft's Windows 8 operating system. In addition, the Central government Procurement Center also excludes Intel's McAfee Security software, Symantec, Kaspersky and other foreign products from the procurement list.

Experts pointed out that in the policy-oriented and market environment favorable environment, domestic manufacturers should seize the opportunity to further promote product and technological innovation, enhance their independent competitiveness, with a view to the future to fully free from the dependence of foreign giants.