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Oz unchanged by Cisco reshuffle

Oz unchanged by Cisco reshuffle

Despite causing the US channel considerable alarm, Cisco Systems' reorganisation of around 11 technology groups will have "no effect" on Australia, Cisco officials said.

The changes, effective immediately, will see Cisco create one engineering unit that will encompass 11 separate technology groups and one marketing unit.

The 11 new groups will respectively target access, aggregation, the IOS operating system, Internet switching and services, Ethernet access, network management, core routing, optical, storage, voice and wireless.

After more than 20 rapid-fire acquisitions, Cisco claims the move will see the consolidation and improved integration of product development, and will prevent separate engineering groups from developing the same technology.

Cisco had previously been organised around three market groups: commercial, enterprise and service provision.

Kip Cole, channels manager of Cisco Systems Australia/New Zealand, told ARN the new model "changes nothing" in the way the company engages with the channel in Australia.

"In the US, when you talk about those [engineering] teams, you're talking about people who are building the products," says Cole. "In Australia we don't do that."

Cole claims the only effect the changes will have on Australia is that products will come to market faster. Radiata, the Australian wireless developer Cisco bought last year, will continue with research and development, but Cole claims the technology will be sent to the US before it is manufactured.

Cisco: What the Australian channel said

There are major alarm bells going off. If they're getting more product focused, that's good for us. As capable as Cisco are, I don't think they can have a national presence and can offer [an adequate] level of integration and service - they simply don't have the feet on the street." David Tse, Logical's general manager of marketing, Asia Pacific.

"In Australia, they are keeping the same structure that they currently have - enterprise, systems integrators and some special arrangement with Telstra. It could have been very interesting dealing with 11 different people as opposed to three." Peter King, Getronic's national marketing manager for managed services (Gold partner).

"With a product focus, it may have an effect on [Cisco's] people in Asia, but not down here. The bottom line is it won't affect us." Kent Brooks, managing director of NetStar.

Cisco: The US perspective

Meanwhile, analysts and resellers in the US say Cisco Systems' reorganisation may streamline the company, making it more efficient, but it's unlikely to return the vendor to its glory days.

Cisco's revenue grew tremendously over the past four years, skyrocketing from $US6.4 billion in fiscal year 1997 to $22.3 billion in fiscal year 2001. But the fuel for that growth - a torrid buying spree from well-funded Internet startups and telecommunications players - is gone. A reorganisation can help the company, but it will not affect the slowing demand for Cisco's products, industry pundits warned.

There's a lot of Cisco gear on the market without buyers, resellers say. Failing dot-coms and Internet service providers are dumping gear on auction Web site eBay for whatever they can get for it. Some of it still in the original, unopened boxes that Cisco shipped it in.

"Word on the street is that there's more Cisco inventory out there than anything else," said Rohi Sukhia, president of Tradeloop, an online trading community for resellers. "You can buy used Cisco equipment for pennies on the dollar," he said. "It's no wonder they're having trouble selling new stuff."


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