Exchange rate fly in Cisco's ointment

Exchange rate fly in Cisco's ointment

A $10 million below budget performance on anticipated exchange rate variations against the $US has marred an otherwise excellent six-month performance for Cisco Systems' local arm.

Gary Jackson, Cisco Systems' managing director Australia and New Zealand, said the exchange rate performance was "a worry" and, should the Australian dollar drop to US57c, it could start to impact on the local lower-end switching market.

Cisco has already increased prices twice to combat the problems associated with the Australian dollar's performance. Jackson said he hoped these would be the last required to deal with the exchange rate issue.

He attributed some of the good result to an improved relationship with small resellers, which has helped "spread out the low-end switching numbers". Over three-quarters of Cisco's Australian business is conducted through channel partners such as Express Data, LAN Systems and Tech Pacific.

Changes in the channel model have, he added, been a key contributor to the company's success.

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