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Cisco vs. the World: Rough Seas Ahead?

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Cisco Systems (s CSCO), the Wall Street darling, might soon find itself in a street brawl with not only former enemies but also allies who are turning on it. The company, which once made its living selling core infrastructure products such as routers and switches, has more recently been chasing new markets such as video conferencing and data center-focused technologies including servers. Sure, over the long term, the upside of these markets is huge, but in the near term these moves could prove to be painful. Why? Because these moves into new markets are pitting the company against one-time supporters.

It has already been skirmishing with Microsoft (s MSFT) (in collaboration and unified communications) and Google (s goog), and soon it’s going to find itself locked in mortal combat with behemoths that are going to be merciless in protecting their turf. On GigaOM Pro (subscription required), Derrick Harris points out that almost everyone has a vested interest in keeping Cisco down.

This includes Hewlett-Packard (s HPQ) and IBM (s IBM). Last week, Cisco announced a partnership with storage giant EMC (s EMC) and virtualization leader VMware (s VMW) to set up a joint venture called Acadia based on the concept that the data center is the computer. I wonder how service providers feel about using Cisco’s unified computing products now that it has made known its intentions to compete with them. (Related post: “What the Cisco/EMC/VMWare Trinity Means for Cloud Computing“)


More importantly, because these new efforts cut into the storage sales of HP, Dell and IBM, it is more than likely they are going to respond aggressively with scorched-earth strategies. Cisco’s opponents are already aligning with each other, trying to figure out ways to pulverize the company and its partners.

What do you guys think? Do you agree that Cisco is in for a rough ride? Or do you think the company’s rivals should be quaking in their boots?

10 Responses to “Cisco vs. the World: Rough Seas Ahead?”

  1. It seems that competition among Microsoft, HP & Cisco will be heating up as former partners scramble to find new solutions.

    Cisco’s acquisition of Tandberg (which should go through) will shake up the latter’s close relationship with Microsoft — because Microsoft is now dependent on Cisco-owned technology — a position Redmond can’t like. Meanwhile, Tandberg had a partnership with HP around Halo — which means HP needs a new partner.

  2. First off – cisco has a direct sales force.
    HP, IBM, msft, Dell, et al have been trying to keep cisco down or enter their market since the early 90’s. This is nothing new.

  3. Cisco are losing the plot! recent launch of 61 new products in collaboration? 30 “Adjacencies”, numerous “boards and councils”, over 400 Vice Presidents and someone at the helm that says its all about capturing market transitions early?!

    Cisco just appear desperate- confusing strategy and vision with no one at the helm and heap loads of cash to spend on companies that will not make a difference!

    This company needs to restructure- integrate (well over 50 different business units that don’t talk to one another!) and stick to core business.

    Why are people continuing to pay a premium when Cisco cannot demonstrate the value any more?

  4. They will be fine. It’s not like their rivals (IBM, HP, Dell) in the enterprise data center market can stand each other. The enterprise data center market is ripe for consolidation much like the enterprise application market. Also they are not going into this alone. Both Cisco and EMC have an awesome direct sales force which can more than hold their own.

    • john smith

      shows what you know, cisco is a partner only sales force. EMC’s core business…Storage and software around that storage is being commoditized….

      Cisco is getting a little big for their britches.