Did Deloitte's Q&A destroy Cisco's single vendor network marketing strategy?
Cisco CEO John Chambers gives Cisco 'mediocre marks' on defining and helping customers implement an overall IT security architecture - he says it's still piecemeal in approach.
Cisco paid Deloitte for the survey. Then Cisco published a 7-page Q&A of its webcast held on February 23, 2012 announcing the results of the Deloitte study:
In my opinion, Deloitte's answers to the Q&A pretty much destroyed Cisco's single vendor network marketing strategy:
Q. Doesn't having a single vendor network impose a greater business risk by encouraging "lock in"?
A. This is one risk of many which should be considered. "Lock in" is a financial risk, and should be understood in the context of "switching costs". If the switching costs are lower than the assumed total enterprise risks, then "lock in" should not be the primary factor.
My assessment: Deloitte concedes that a single vendor network (i.e. "lock in") does indeed impose a business risk.
Q. Good question came thru -- even in a single vendor solution the IOSs and configuration syntax can be different significantly enough to mimic that risk recognized in a multivendor solution. EX - IOS and IOS XR --- if folks have to learn a new IOS, why not take that opportunity to introduce a new vendor, say Juniper?
A. The most important factor in understanding the tradeoffs is to assess the operational risks of using different products and vendors. The survey found there are generally higher risks between vendors than between products from the same vendor.
My assessment: Deloitte does NOT deny the operational risks of using different Cisco IOSs and configuration syntax.
Q. I follow the idea behind the airplane analogy, and that a holistic approach is appropriate. Airplane components are manufactured separately by different manufacturers, based on specialties - the passenger seat manufacturers don't also make the wings and control panels. Isn't there value in specialization?
A. Yes - but this is crucial - as long as the components are engineered to work together, which is not necessarily the case with networking products.
My assessment: Well, why would an nonincumbent vendor recommend its products to an enterprise when those products wouldn't interoperate with the network of that enterprise? I mean, Deloitte's answer is total FUD.
Meanwhile earlier this week, Network World reported about Cisco CEO John Chambers:
"He gives Cisco 'mediocre marks' on defining and helping customers implement an overall IT security architecture - he says it's still piecemeal in approach."
Q. I saw Jim Duffy at @NWW wrote "So buyers and designers of multivendor networks don't know how the equipment will work together or what the implications and risks will be of their decisions? Yet, they do know all about that when it comes to procuring gear from a single vendor." How do you respond to this reporter?
A. The key issue is: equipment designed & produced by different vendors will likely be more complex to integrate and present interoperability challenges; complexity inevitably raises operational risks.
My assessment: Will likely? How come Deloitte did NOT say that it will?
Q. If the risk is with the configuration of the devices, then how is the risk different between single vs. multivendor networks? A single vendor device can also have totally different configurations.
A. True, the interoperability challenges also exist with 'single vendor' networks, but the survey found that these issues are exacerbated with additional vendors in the network.
My assessment: Deloitte admits that Cisco's products have interoperability challenges.
Q. In the Gartner paper on multivendor networks, they claim that support contract costs can be reduced by as much as 95%. Have you found similar results in your research?
A. No, we did not.
My assessment: So Deloitte, what exactly did you find in your research? Nice sidestep!
"Maintenance Services: The cost of maintenance is highly variable among vendors, and the mission-critical nature of the products involved. From our interviews, it is clear that savings on maintenance are readily achievable as organizations take advantage of other vendors' offerings that include more-comprehensive lifetime warranties and site license maintenance that takes into consideration the economies of scale when servicing high-volume products within an infrastructure. The savings we observed ranged from roughly 40% to as much as 95% less than what was previously paid for Cisco's SmartNet services for similar infrastructure and coverage."
Q. Is this Deloitte study 100% financed by Cisco? Is it a really impartial view?
A. Deloitte performed the survey for Cisco, and remained independent throughout the process. Cisco was not involved in the interviews, the analysis, or the development of the conclusions.
My assessment: Deloitte confirms that its study was 100% financed by Cisco.
Q. The term "Risk" seems nebulous in this discussion. Are you saying there will be higher total cost with a multi-vendor environment, or that there is just a risk of a total higher cost?
A. As stated in the paper, "risk" involves much more than costs, and involves the potential for business services disruption, incursion of direct costs to restore services and recover from outages, lost revenue, reputational damage, marketplace brand damage, etc.
My assessment: Nice sidestep by Deloitte. Obviously, its admitting there will be NO higher total cost with a multi-vendor environment, only risk.
Q. What's the percentage of customers having multivendor network?
A. The sample of customers surveyed for this report involved approximately half with multi-vendor networks.
My assessment: Well, if half of the customers surveyed have only a single vendor network, won't that automatically create a favorable survey that supports a single vendor network?
Q. Lots of businesses are not very good at quantifying a business cost of downtime -- did your subjects have costs already calculated?
A. It was a mix, but yes some subjects did have numbers already calculated before being approached for this study.
My assessment: So what percentage of the customers surveyed did Deloitte calculate costs for? I mean, that definitely throws into question the results of the study.
Q. Are there any concrete examples with specific numbers of savings available? It would help to get a feeling about the value.
A. There is an explicit example in the paper that highlights the correlated risk. The cost of mitigating that risk is dependent on the customer's appetite for risk and what they spend to mitigate it.
My assessment: So Deloitte admits it has no specific numbers of savings available!
Q. Do the multiple versions of Cisco IOS cause interoperability, management issues and add complexity causing risk?
A. The survey found there are generally higher risks between vendors than between products from the same vendor.
My assessment: Deloitte admits that multiple versions of Cisco IOS cause interoperability and management issues.
Q. What about the risk of being with a single vendor and if it goes 1)bankrupt or (2) loses its key engineers or (3) ties you into its architecture and makes you pay higher prices over time?
A. This is one risk of many which should be considered. "Lock in" is a financial risk, and should be understood in the context of "switching costs". If the switching costs are lower than the assumed total enterprise risks, then "lock in" should not be the primary factor.
My assessment: Once more, Deloitte admits that single vendor network (i.e. "lock in") creates a financial risk.
Q. With ALL of the Cisco acquisitions and numerous operating systems (Classic IOS, IOS XR, IOS XE, NX-OS, VoIP), can't you consider Cisco a multi vendor in and of itself.
A. Cisco invests significant time and resources in integrating our technology portfolios, but also in testing and validating the solutions to absorb risk for the customer.
My assessment: Nice sidestep!
Meanwhile earlier this week, Network World reported about Cisco CEO John Chambers:
"He gives Cisco 'mediocre marks' on defining and helping customers implement an overall IT security architecture - he says it's still piecemeal in approach."
Q. Is Cisco's product portfolio (N7Ks, N5Ks, N3Ks, Cat6Ks, Cat4Ks, Cat3Ks) not in essence a "multi-vendor" environment due to the extreme differences in hardware and software capabilities? Each of the products came from separate "beginnings" and we have not seen the merging of IOS/NXOS functions and features we expected.
A. In the 'old world' at Cisco that would be a true statement. About three years ago, at our customers' request, Cisco moved from building products independently to architecturally. What that means is that although individual products have unique features, there's a higher level of features that span across the products (Called BN Network Services). Those services extract what has typically been very granular (and hard to use) features to a level that is far more consumable by our customers. The end result is those various products now work better together and bring unique value as a system to our customers.
My assessment: Nice sidestep!
Meanwhile earlier this week, Network World reported about Cisco CEO John Chambers:
"He gives Cisco 'mediocre marks' on defining and helping customers implement an overall IT security architecture - he says it's still piecemeal in approach."
Q. Have you done any work to measure the difference in time to resolution of networking issues with a single vendor environment vs. a multivendor environment?
A. Measuring and analyzing data for problem resolution time for certain classes of networks would require a specific study.
My assessment: Nice sidestep!
Q. How many IT vendors does Deloitte utilize?
A. Network design information for specific enterprises is not being made available as part of this study.
My assessment: Nice sidestep! It was a direct question Deloitte, how many IT vendors does Deloitte untilize?
Q. Is it arguable that multi-vendors for security products may be better than a single vendor with a single viewpoint on security?
A. This is unlikely. Multiple vendors used for security also present a proportional increase in potential security threat targets.
My assessment: Cisco CEO John Chambers appears NOT to agree with Deloitte. How so?
Well earlier this week, Network World reported about Cisco CEO John Chambers:
"He gives Cisco 'mediocre marks' on defining and helping customers implement an overall IT security architecture - he says it's still piecemeal in approach."
Q. Please elaborate on how your research differed from the multivendor network Gartner report that was mentioned?
A. In Deloitte's opinion, the Gartner report was primarily focused on the financial aspects of product costs, and did not focus as much on operational complexity or business risk.
My assessment: Well, why did the Deloitte survey not focus on costs? I mean, is Deloitte admitting that the Gartner report is correct in its cost findings?
Q. Two of the top issues we see in the way of better managing the network are a lack of overall skills and also that the tools available to manage the network could be much, much better. Even in a single vendor network these are issues, but are amplified in multi-vendor networks. What do Cisco's customers on the panel see here? And what can be done to raise the standards here?
A. The survey found that network management complexity is modestly impacted by using network products from multiple vendors, but not significantly. Existing standards are effective, but network management products can always be improved to enhance manageability and reduce the reliance on highly trained support staff.
My assessment: Deloitte admits that network management issues do NOT increase as a result of multi-vendor networks.
