Cisco internal email addresses $100 million overcharge on $22 million California State University RFP
"In response to requests for a formal, internal announcement, this is the email that was just sent to the field (internal only) from Kim Majerus and Larry Payne, our US SLED AVPs."
Some of your customers may be asking you about the Network World article titled "Country's largest 4-year university expels Cisco, saves $100 million." Although you will not be able to discuss specifics of another customer's network or RFP process with your customer, we wanted you to have some background in case they asked questions.
In summary:
We responded to the CSU RFP and met or exceeded all technical requirements.
Cisco has enjoyed and continues to enjoy a strong relationship with CSU and its 23 campuses.
The alleged cost savings reported in the press are not at all familiar to those with detailed knowledge of the customer and their RFP process.
We believe they are based on extrapolation of sample configurations and standard pricing, with no consideration of the value inherent in real world TCO, Cisco product capabilities, and Cisco's technical services and support.
Put simply, there is no way that Cisco's bid was six times higher than the competition.
We remain in close contact with CSU and continue to work with them on other projects, including the recent win at San Jose State University (SJSU), one of the largest universities in the system. SJSU selected Cisco in a $28M technology enablement project that kicked off in Cisco's Q4, and a number of news articles and blogs were issued that showcase SJSU's partnership with Cisco, focusing on how they are using our technologies to deliver next generation learning on their campus. A sample of press coverage is included below.
Given the nature of the CSU business and the interest that individual campuses in the system have expressed in working with Cisco, we continue to encourage the system and all campuses to leverage state contract purchasing vehicles (WSCA and CMAS) to procure Cisco products and services. The local sales teams also continue to expand their direct relationships with all of the 23 CSU campuses, and are successfully demonstrating the value of a Cisco solution over the commodity offering from other vendors.
Our disappointment at this RFP result and the unfortunate way it has been characterized in the press has only strengthened our resolve to compete vigorously for business from CSU and other similar accounts. For your reference, here are several articles that detail our success at SJSU:
SJSU Launch Articles (focus on Cisco WebEx at SJSU):
Does the above internal email message confirm that Cisco's new sales culture believes its entitled to "define the buying agenda" of California State University (CSU), much like it did with another customer, the State of West Virginia?
