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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."

Hershey, PA:   Thu, 11/1/12 - 3:33pm    View comments

Update 11/20/2012:

Network World

SJSU sidestepped sole source documentation in Cisco deal

(Instead evaluated Cisco pricing in other western US contracts to justify not bidding $28M project)

Update 11/9/2012:

Wired.Com: Cisco VP Vows to Make Hunting Secret-Leaker his 'Hobby'

Business Insider: Cisco Exec Vows To Hunt Down Leak

Silicon Valley BizBlog: Cisco roiled by leaks

Techdirt: Cisco VP Threatens To Stalk Memo Leaker... Driving More Attention Than Original Memo

GIZMODO: Manhunt - Scary Cisco Executive Vows to Make Finding a Whistleblower His Personal "Hobby"

Dow Jones All Things D: QOTD: Plumbing Problems at Cisco

Stacey Higganbothan at GIGAOM: Cisco VP who is a former CIA officer will make finding leaks his “hobby”

The Register: Cisco sets ex-CIA spook to hunt down leaking staffer

ZDnet: Cisco VP turns hunting memo leaker into new 'hobby'

BetaBeat: Cisco VP Goes Tony Soprano on Employees: Tracking Down the Company’s Memo Leaker Is ‘Now My Hobby’ Cisco boss, and former spook, makes finding leaker "a hobby" - You ain't seen nothing like the Mighty Quinn

Update 11/8/2012:

Network World: Cisco VP to memo leaker: Finding you is now 'my hobby'

Update 11/6/2012 - 4:14pm:

"Cisco puts the groceries on your table every two weeks, not Brad Reese or other Slander Sheet Journalists."

Cisco internal email vows to hunt down the sources of confidential memo leaks to Brad Reese

Update 11/6/2012 - 10:22am:

Cisco's internal email message takes on a new meaning with Wall Street Analyst note today:

Cisco's salesforce is now compensated on profit contributions, not just bookings

Update 11/2/2012:

Request for Public Records-Cisco & ALU

Cisco internal email addresses $100 million California State University RFP overcharge

Internal Use Only


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):

SJSU WebEx Portal

SJSU WebEx is Here!

Silicon Valley/San Jose Business Journal Article (focus on Cisco infrastructure):

San Jose State partners with Cisco on $28M IT infrastructure upgrade

If you have any questions or would like to discuss further, please contact Greg Semler or Renee Patton.


Kim and Larry

Cisco contact:

Renee Patton
US Public Sector Director of Education
Strategic Relations Operation

Telephone: 408-526-6072

What's your take?

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?

Related stories:

SJSU sidestepped sole source documentation in Cisco deal

Cisco internal email vows to hunt down the sources of confidential memo leaks to Brad Reese

Cisco's salesforce is now compensated on profit contributions, not just bookings

SJSU didn't bid Cisco project

Business Insider: Cisco Explains Its $100 Million Foul-Up

Alcatel-Lucent to transform IT network of largest US university system

CSU confirms Cisco RFP


Cisco network really was $100 million more

Country's largest 4-year university expels Cisco, saves $100 million

SJSU Launches Major Tech Initiative

Did Cisco's new sales culture ripoff the State of West Virginia?

Cisco discounts Nexus 7000 switch -76% to win Purdue University's Hansen Cluster bid

Again, what's your take?

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