Lately, I've been trying to put into perspective the "dollar amount success" for 2 of Cisco's much ballyhooed products, the Flip video camcorder and the Cisco TelePresence video solution. Since I don't have any inside information on which to make dollar amount conclusions, I've had to rely totally on what Cisco has made available to the public, for instance, during Cisco's F1Q10 earnings call, John Chambers boasted:
"To give you some additional color on our progress in this area, we talked earlier about tele-presence revenues once again growing in excess of 100% year over year, a proof point that our customers truly understand productivity and value that video delivers internally and with their own customers and partners. Other product areas that may be of interest to you from a revenue perspective including tele-presence had increases over 100% and we added approximately 85 new customers in Q1. Pure Digital’s [Lift] had revenues of approximately $50 million and CRS revenue was up approximately 7% year over year."
Interestingly (at least to me), I think I may have hit "pay dirt" with Cisco's latest Form 10-Q filed with the SEC earlier this week (page 38), which, if not offering absolute numbers, finally allows me to place some sort of "dollar amount success" on the Flip video camcorder and Cisco TelePresence products:
"While we did experience a sequential revenue increase in many of our product categories, our net product sales declined year over year across almost all of our product categories in the first quarter of fiscal 2010, except for sales of our products under the category of other, which reflected positive year-over-year revenue growth as well as positive sequential revenue growth. The year-over-year and sequential revenue increase in that category was driven by sales of Flip video cameras from our fiscal 2009 acquisition of Pure Digital Technologies, Inc. ('Pure Digital'), and increased sales of Cisco TelePresence systems."
Cisco's 1st Quarter Other Product Revenue By Fiscal Year:
F1Q10 - $481 million (page 35) +$42 million increase
F1Q09 - $439 million (page 35) -$71 million decrease
F1Q08 - $510 million (page 40) +$55 million increase
F1Q07 - $455 million (page 33)
So according to Cisco's F1Q10 earnings call and latest SEC Form 10-Q filing, Flip video camcorder revenue combined with a stunning 100% increase in Cisco TelePresence revenue produced a mind-boggling $42 million increase in Cisco revenue. All of this points out that even though Cisco makes a lot of noise about the possibilities of videoconferencing, relatively speaking, it's still a tiny business for Cisco -- so small that they bury it in the "other" category, along with the Flip, optical (which appears to be closing down) and who knows what else. Read more
Plixer International President and CEO - Michael Patterson took time out this week to assemble the following "How-to" tutorial on configuring Cisco Flexible NetFlow for NBAR exports:
"Cisco released in October 2009 an amazing new feature that ties together Cisco's NetFlow technology with NBAR (Network Based Application Recognition). NBAR performs deep inspections of flows in order to identify the actual applications being used.
"For example, H.323, Telnet, RTP, Exchange and Skype are now all identified and exported in NetFlow. Traditionally, only the source and destination port have been exported (e.g. TCP port 80) in NetFlow v5 and v9. Flexible NetFlow improves on NetFlow v9 to make NBAR exports possible, but you've got to upgrade the IOS (view Cisco's software upgrade procedure) on a router to version 15.
"NBAR integration with NetFlow has been done with Cisco's Flexible NetFlow (FNF) technology, not traditional NetFlow, and because the configurations are a bit more involved, I've documented the commands below."
NBAR NetFlow Commands
"Type in the following NBAR NetFlow commands, but keep in mind that on Cisco routers, you've got to be in config mode:" Read more
Allan Sulkin - founder and president of enterprise communications systems and applications consultancy - TEQConsult Group, blogged that third quarter shipment reports are in from the leading enterprise communications systems suppliers and according to Sulkin:
"The two market leaders, Cisco and Avaya, reported double digit growth in North America and globally for the quarter. Though Avaya narrowed the gap between itself and Cisco during the first half of the year, a very strong third quarter by Cisco will keep the system supplier in first position for North American system for the year unless something unforeseen happens this quarter.
"The two competitors are in very close battle for the global leadership position, though, and the difference between them is looking like it will be less than 1% share. The race next year will not be as close when Avaya has the added benefit of Nortel shipments (which are declining at an accelerated rate)." Read more
John Chambers was quoted during the Journal's CEO Council meetng this week:
"Selectively, we're hiring on certain projects," said John Chambers, chief executive of networking giant Cisco Systems Inc. While most of the hiring is being done in the company's 30 new business ventures, he said some new jobs still tie into the core routing and switching business. Job creation usually lags capital investments by a few quarters, Mr. Chambers said, noting that the company has done its investing through several recent acquisitions.
Cisco is well-known as being one of the best companies to work for:
However unfortunately, Cisco has now become the target of unflattering employee reviews on the popular online career and workplace community - Glassdoor.com.
So how does one verify that Glassdoor's information is really from Cisco employees? Read more
According to a Christian Brothers Investment Services notice, John Chambers has had some good paydays as the CEO of Cisco, averaging $38.78 million per year in pay during the most recent 6 years.
Forbes Special Report on CEO Compensation published in May 2007
In a letter addressed to Cisco shareholders regarding Cisco's upcoming annual stockholder's meeting which was held last week:
Chambers and his Board of Directors urged Cisco shareholders to vote NO against a proposal submitted by Christian Brothers Investment Services (backed by 804,564 shares of Cisco common stock), that pushed for a "say on executive pay" proxy resolution during Cisco's annual meeting.
One of the reasons Cisco cited for why shareholders should vote NO against the "say on executive pay" proposal was its new Stock Incentive Plan (2nd paragraph, 2nd sentence):
However, I found it quite interesting that according to Cisco's new Stock Incentive Plan as amended and restated, Cisco has absolutely no idea on how exactly Cisco's executives will benefit nor the amounts they will receive under the new plan: Read more
Last summer I blogged about why HP ProCurve was dismantling Cisco's market share on a deal-by-deal basis. Interestingly enough, The Arizona Republic is reporting this week that Cisco raised a big stink over losing its longtime Arizona customer - Gilbert Public School's $3.5 million network upgrade deal to HP.
According to the Republic, Cisco engineer - Kevin Murphy spoke at a Gilbert Public Schools board meeting and complained that the school's consultants overstated Cisco's $5 million bid by $1.2 million, apparently because the consultants had ignored Cisco's last cost estimate, which had been submitted on August 13. Read more
Am not a fan of consolidation in the networking industry, as I believe customer needs are much better served by those networking vendors whom operate as independent companies. So naturally, I'm none too pleased that HP is buying 3Com.
However, Dave Donatelli - HP executive vice president and general manager of enterprise servers and networking, spoke during an interesting webcast this week with regard to his motivations and rationale for purchasing 3Com.
In all of the content that follows below, I've combined Donatelli's visual presentation to the words and thoughts he expressed during this week's webcast, which discussed HP's reasons for buying 3Com:
"Out of the terms of the merger agreement, 3Com stockholders receive $7.90 for each share of 3Com common stock that they hold at the closing of the merger. The transaction is to be financed with existing cash. The acquisition is subject to customary closing conditions, including the receipt of domestic and foreign regulatory approvals and the approval of 3Com stockholders. The transaction is expected to close in the first calendar half of 2010." Read more
Personally, I'm now convinced that owners of the companies Cisco acquires are highly informed about the future direction of Cisco stock.
And why do I believe that?
Well, it's my opinion that when the owners of a company Cisco is acquiring accept only cash, their demonstrating they have little faith in Cisco's stock appreciating.
I mean, investment bankers are advising the owners of these acquired companies, and heck, investment bankers are usually very "plugged in" as to the merits of when to buy and when to sell Cisco stock.
For example, when Cisco used its common stock to buy Linksys and Pure Digital, the owners of the selling companies did very well by accepting Cisco stock for their shares.
Thus the creation of my thesis:
Purchase Cisco stock when Cisco's using its common stock to make acquisitions.
Consider selling Cisco stock when Cisco's using its cash to make acquisitions! Read more
Mike Volpi kept his word to his Skype investment group, he got the Father of SIP - Jonathan Rosenberg, to jump ship.
Skype announced Roseberg jumped ship from Cisco the day after our blog story published emails that disclosed Rosenberg had an interest in discussing Skype with Volpi.
Rosenberg is now Skype's Chief Technology Strategist - responsible for Skype's overall architecture and technology strategy. Read more
At least Cisco is warning Unified Communications customers about it NOT successfully offering support for Microsoft Windows 7:
"Cisco will have no liability for any delay in delivery, or failure to deliver, any or all of the planned Windows 7 support features set forth herein. Therefore, any such delay or failure will not in any way grant to Cisco customers the right to return, refund, adjust, or exchange any previously purchased Cisco products or products that customers may purchase under their Cisco purchase contracts."
Are you "rolling the dice" by deploying Windows 7 (32-bit and 64-bit) while purchasing the following Cisco UC products? Read more
The New York Times is reporting that Skype's cofounders Niklas Zennstrom and Janus Friis will become significant owners of the investment group buying a 65% interest in Skype from eBay for approximately $1.9 billion in cash (which values Skype at $2.75 billion).
Simultaneously, it now appears Mike Volpi is being kicked to the curb by the very same investment group he organized to purchase Skype from eBay!
In a fascinating development, copies of Mike Volpi's email messages that appeared within legal litigation exhibits (page 6), reveal he had absolutely no problem stepping on the toes of his former employer, Cisco Systems (which is quite interesting because Volpi was considered by many to be the most likely Cisco executive to succeed John Chambers as Cisco's CEO). Read more
Cisco CEO John Chambers was recently named one of America's Best Leaders, today however, The New York Times in a scathing article (at least in my opinion), is questioning whether Cisco shareholders will ever see a return on their investment.
According to the Times story:
Breakingviews.com correspondent - Robert Cyran criticized the eternal ebullience of Chambers:
"Mr. Chambers, who once claimed Cisco could increase sales by 50 percent a year over the long run. They’ve since grown 7 percent annually."
Cyran then lashed out at Chambers' management reorganization:
"Cisco has 59 standing boards and councils. This seems like a recipe for endless meetings, management confusion and reduced accountability."
Read more
Today George Morton - Dual CCIE #18532 Routing and Switching/Security, provided his analysis of Cisco's new worldwide CCIE count:
"I'm always surprised when Cisco announces the CCIE numbers. There's no rhyme nor reason that I can understand as to when they publish the numbers. The interesting thing is that this report shows about one month of activity and the big news is China.
"Since the last report about 32 days ago, China has had a decrease in its total number of CCIEs. Now it's important to remember if 5 pass and 6 are decertified then the net new CCIE number for the report is -1. In this monthly report the net new CCIE number for China is -9. With China leading the way for so many years this is a major shift." Read more
Last week, Avian Securities Senior Telecom Research Analyst - Catharine Trebnick said in her research note:
"In the Carrier Ethernet segment, the market is extremely competitive and according to our industry sources, pricing is in free fall. Operators are selling IPVPN with Cisco pricing at the high end and /or Adtran pricing at the low end and are keeping Juniper routers just where they are in the network, close to the core.
"This dynamic changes our original thesis, that the Juniper MX Ethernet switch would gain traction in some accounts as operators retired their CSCO Catalyst switches. In addition, our industry contacts have indicated that Cisco is pushing their ASR 9000 at very competitive prices." Read more
As a selection committee member for America's Best Leaders, Michael Useem - Professor of Management and Director of the Center for Leadership and Change Management at The Wharton School of the University of Pennsylvania (whom by the way has also personally presented programs and seminars on leadership and change to Cisco Systems), appears to of had a hand in choosing Cisco CEO John Chambers for the honor of being named one of:
According to an America's Best profile written by Useem regarding Chambers' leadership success:
When AIG, Citi, and General Motors went into tailspins after the financial bubble burst in 2008, they abruptly changed leadership. But Cisco did not, and now in his 14th year as CEO—twice the norm for large companies—Chambers has led one of the biggest comebacks of modern times.
Read more
Earlier this month, network troubleshooting and analysis solutions vendor - Network Instruments, announced GigaStor NetFlow Agent, which according to Network Instruments:
"Allows engineers to utilize NetFlow data about any device in any environment. GigaStor captures and converts packets into NetFlow data flows, pushing it out to multiple destinations simultaneously. This is especially valuable for Network Behavior Anomaly Detection (NBAD) and compliance monitoring applications."
In the Q & A below, Douglas Smith - Cofounder and President of Network Instruments, discusses the key limitations of Cisco NetFlow as well as the benefits of his new GigaStor NetFlow Agent:
1. So what are key Cisco NetFlow limitations?
| Douglas Smith: | There are several limitations that can prevent the use of NetFlow as a performance monitoring technology across an entire network. For companies using NetFlow-dependent reporting applications for NBAD, security, compliance or performance management, these limitations severely limit visibility to portions of the network. |
Four examples of limitations that can prevent the use of NetFlow as a performance monitoring technology: Read more
The new Cisco ISR G2 portfolio is priced as follows: Read more
Norwegian news is reporting that Tandberg management received financial incentives directly from Cisco in order to favorably promote Cisco's acquisition offer to Tandberg shareholders (apparently before Cisco's offer to buy Tandberg was made public):
"Before Cisco was bidding for Tandberg, had the U.S. IT giant has already signed a bonus contract with the CEO Fredrik Halvorsen, and eight other leaders in video conferencing company, newspaper Dagens Næringsliv."
It now appears that some Tandberg shareholders are none too pleased!
Furthermore, the below Q & A with Mark Roberts - Polycom vice president of partner marketing, reveals that Polycom believes its channel partners are the "actual winners" in Cisco's acquisition of Tandberg:
1. How will the Cisco/Tandberg combination affect Polycom partners? Read more
| Mark Roberts: | Polycom becomes the only independent provider of collaboration solutions with global scale. This is a huge benefit for our partners because they can now sell Polycom solutions to customers who rely on Avaya, BroadSoft, HP, IBM, Microsoft and Siemens for their UC solution. In fact, Tandberg will be tied solely to Cisco’s call management platform, representing only 11 percent of the global call management market, opening up a significant opportunity for Polycom channel partners to sell into. |
28-year-old Jennifer Leigh Harmon Easevoli bragged on Classmates.com:
"For those of you who knew me and doubted me - I made it, and I made it big.
"I am bigger and better than you thought I could be.
"I am more successful than I could have dreamed and I have had a great time all the while." Read more
VoiceCon Wireless and Mobility track planner - Michael Finneran, seems none too impressed with Cisco's definitive agreement to acquire Starent Networks in his recent No Jitter post:
Cisco Acquires Starent; No Movement on "Motion"
Finneran was particularly harsh on Cisco Motion, saying that since its launch back in May 2008, Cisco Motion architecture has been devalued to "marketecture."
However, it certainly appeared to me that Finneran was really venting his pent-up frustration at Cisco's much ballyhooed new management structure:
"Watching Cisco, you get the feeling that they have so many things going on that nothing is getting done. Certainly we don't see much meaningful collaboration between the WLAN and UC groups, and outside of rah-rah talks from Mr. Chambers, wireless is a disconnect."
Read more
Brad Reese cofounded BradReese.Com Cisco Refurbished, which enables affordable Cisco networks globally by assuring customer satisfaction with guaranteed one year warranties on both Cisco Repair as well as Refurbished Cisco.
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