Entering the hostile IBM-Cisco world

Nick Francis never shied away from controversy and he's not about to start now.

As director of marketing for Cisco Systems, Inc.'s InterWorks Business Unit, Francis was one of the most vocal, anti-IBM executives in the industry. But he quit Cisco earlier this year to do something many observers thought impossible: He went to work for IBM. But there was no love lost there, and he quit that post after only three weeks citing personal burnout and IBM's slow-moving nature. After taking most of the summer off, Francis is now forming the Madison Group consultancy in Cary, N.C. Network World's Associate News Editor Michael Cooney caught up with Francis last week to get his no-holds-barred views on IBM, Cisco and the network industry.

Q. You've been on both sides of the IBM and Cisco network planning walls. How are those two companies different?

A. The way IBM and Cisco look at the networking world is completely different. IBM has the most complete end-to-end networking story out there. But NHD's [Networking Hardware Division] biggest problem is it just doesn't have the infrastructure to deliver it. By infrastructure I mean the plumbing, like a family of scalable routers and switches. They have the 2210 [router], but there is nothing for the 2210 to seed; everything still ends at the front-end processor, and that's not really acceptable for most people looking at building intranets.

Cisco, on the other hand, has the best infrastructure or plumbing out there. But to Cisco, end to end means what's at either end of the pipe and not much else.

You can look at Cisco as the best plumbing supplier and IBM as the general contractor. But it doesn't matter how good-looking your building is if the plumbing doesn't work.

Q. Can anything be done about that situation from IBM or Cisco's perspective?

A. IBM still propagates a two- network world in the field - SNA and TCP/IP. It's area specialists [salespeople] still push the 3745 . . . a solution for customers with SNA and TCP/IP . . . when in fact they need to offer a much wider array of products to those folks. IBM still fights the "this is better than that" SNA vs. TCP/IP battle in the field, when it really should've moved beyond that by now.

Cisco of course has let IBM keep that argument alive because it benefits them. But they shouldn't be keeping that "mine is bigger and faster" argument either because, bottom line, users just don't care about how much stuff they can blast down a pipe. They want a choice of products that work. Performance is important, but it's not the last word.

IBM has plenty to do. They have a good story with their 2216 and MSS [Multiprotocol Switched Services], but they just can't deliver the message. IBM doesn't have anything to offer Internet service providers - that's a hot area where they have no presence. IBM doesn't havce an intranet story - Bay has one, 3Com has one, especially with U.S. Robotics now, and Cisco has one. NHD is big on saying they are going after markets, but there is little real action.

NHD suffers an identity crisis within IBM. They are not recognized at the corporate level of IBM. That is a probem.

Q. What could IBM do to rectify that situation?

A. Doing things like breaking the SNA business out as a separate business unit is a good idea. Making it a separate unit would possibly help IBM get it the attention it deserves. It is a profitable business. Then NHD could focus all of its energies on emerging products. As long as NHD pushes the 3745/46 as the answer to mixing, integrating or migrating networks, it isn't going to help its server busineess or other parts of the IBM world it could help.

You don't have to look very far to see how far NHD has fallen. IBM's outsourcing arm uses mostly Cisco, FORE, Ascend and others' hardware when they contract to outsource a network. They are by no means obligated to using IBM hardware, mind you, but the potential synergy is obviously there.

Typically, network plumbing is 12 to 15% of an outsourcing deal. So if IBM has a $100 million deal and they have 30% margins on it, you'd think they'd use some of IBM's own equipment. But they don't typically. There is something wrong there.

Q. So which vendor do you think has the greatest shot at controlling the data center?

A. It really comes down to a question of who controls the enterprise network. Cisco has the wherewithal but doesn't really have the full business model to pull it off. To be a full-service provider, you have to have the application, network management, service and support models in place. Cisco has been certainly growing toward that, but isn't there quite yet.

On the flip side of that is that you're going to have a segment of smaller networking players that realize they can't be everything to everybody, and they will succeed too.

Q. Which vendors are the greatest threats or competition to IBM and Cisco?

A. 3Com owns the NICs [network interface card]and LAN area. They are going to have a great ISP story with U.S. Robotics. You probably won't see them as much in the enterprise WAN area, though.

Bay is filling in the gaps between Cisco and IBM. They have been riding IBM's coattails for so long. Their new channel-attached routers should be a good move because it will help them play in the enterprise area, where they have been absent for so long.

Q. Do you think NHD would benefit from making a major acquisition?

A. NHD really hasn't been allowed from the corporate level to make any acquisitions, which really puts them at a competitive disadvantage. Would it help? I think NHD has to show some propensity for change first. I thought NHD wanted to change, which is one of the main reasons I went back there earlier this year.

Q. Well, since you brought it up, why did you end up leaving again after only three weeks?

A. Well, I think the executives who brought me back wanted change, but they didn't tell the rest of the division. I think there were some folks who just wanted to get me out of Cisco, I thought I could help NHD work with others in the industry rather than battle with them. I realized very quickly that there was going to be no changes when I came on board. They don't have the propensity for change. So I left.

What was it like to work with a group of people, essentially all of NHD, that you had been bashing from your Cisco perch?

Well, let's say it was a hostile environment.