Guards are changing at Cisco and Nortel

Guards are changing at Cisco and Nortel

After weeks of rumours circulating in the channel, Cisco Systems has confirmed its long standing director of channel operations Liz Lawson will be leaving Australia to take up a position with the vendor in Singapore. The revelations come at a time when plummeting share prices and a raft of sackings have left the channel wondering what's going on within the walls of the country's largest networking vendors.

Lawson leaves Cisco after effectively turning the vendor's revenues from 80 per cent direct sales in 1996, to around 80 per cent through the channel in 2001. The confirmation ends speculation that Terry Walsh, Cisco's Australia/New Zealand MD, was the one to be heading north.

Sources in contact with ARN had indicated Walsh would be replaced by a duel role with Rick Ferguson, current manager of Cisco's Commercial Division, taking one of the positions. It is a rumour categorically denied by Cisco who suggested that wires were crossed and names mixed up.

In her new role Lawson will be responsible for replicating her channel efforts on a regional scale therefore being accountable for all Cisco channels across the Asia Pacific region. It is a position Lawson is looking forward to.

"I look forward to it as a challenge, its going to be an adventure," Lawson told ARN.

Lawson attributes growing Cisco's channel from under 100 partners buying directly from the vendor when she joined in 1996 to over 1,300 active partners operating in a two-tier distribution model as one of her biggest accomplishments.

Cisco took its channel sales from single digit millions to triple digit millions in Australia during Lawson's reign as channels director. With Lawson finishing on May 4, a new channels director is expected to be announced within the next few weeks.

Meanwhile, Cisco's outspoken CEO John Chambers has announced the company would be laying-off around 8,500 staff, or 18 per cent of its work force, which is about 500 more than previously stated. It is not known at this stage how many Australian staff will be retrenched, according to a local Cisco spokesperson.

The rationalisation news in network vendor ranks is not restricted to Cisco. Quarterly results announced in the US this week by rival vendor Nortel Networks showed that despite meeting analyst's lowered expectations for the first quarter ending March 31 the Canadian vendor is set to lay off an additional 5,000 employees.

The proposed cuts to be made by mid-year take the total number of employees shed by Nortel to a total of 20,000, adding 5,000 to a round of layoffs announced in March.

Nortel reported revenues of US$6.18 billion for the quarter compared to revenues of $6.32 billion for the same period in 2000 the company said in a statement. Reduced capital spending by service providers and corporations was cited for the lowered results.

While first quarter revenue was down 23 per cent and 2 per cent in the US and Canada respectively, Nortel's business grew 38 per cent outside North America.

According to Elizabeth Lovett, marketing communications manager at Nortel Networks Australia, local cuts have yet to be finalised. However, she was able confirm industry reports the vendor's Australian operations was undergoing considerable restructuring around what the vendor has tagged to be "high growth" areas. The extent of this process and its effect on Nortel's channel remains to be seen.

Joel Martin, research manager, mCommerce and Communications at research firm International Data Corp (IDC) claims the bulk of networking vendor's staff cuts have been limited to the US.

"The layoffs aren't happening in Australia they are primarily things that are going on in the US, we have seen a few people here loose their jobs but it is nothing like what is being seen in the US," Martin said. "Outside of the US it is more of a hiring freeze"The worrying indicator for the channel though, according to Martin, is that due to the generally higher cost of networking equipment a lot of companies are not looking at purchasing this technology any time soon. This will be offset by a heightened activity in the SME, but as consumers become more wary of new technologies the sales process will be more demanding he added.

Photograph: Cisco's Liz Lawson

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