Nowadays, it most certainly appears that I hit the "nail on the head" with the above two Network World Cisco Subnet blogs!
How so, you may ask?
Well, publicly held Cisco Gold Partner - INX, has been financially slammed (view INX filings with the SEC) by Cisco's product availability issues. For example, revealed in the INX Form 10-Q filing dated November 12, 2009 (page 22) with the U.S. Securities and Exchange Commission:
"Revenue. (in millions) Total revenue decreased by $14,083, or 19.6%, to $57,859 from $71,942. Products revenue decreased $12,763, or 21.4% to $46,813 from $59,576. The decrease in products revenue was primarily due to unanticipated product availability issues from our key manufacturer supplier, Cisco Systems, Inc., which led to an inability to complete certain projects during the quarter. We currently believe the product availability issues will improve somewhat during the latter part of the fourth quarter."
Personally, I find it amazing that a Cisco Gold Partner took a 21% hit to its product revenue because Cisco couldn't deliver product. Unfortunately for INX, Cisco's product availability issues are still a problem. For example, according to an INX Form 8-K that was filed only last week with the SEC on March 26:
"Product deliveries by Cisco Systems, the Company's primary product supplier, improved somewhat during the quarter, and net billings to customers for product shipments increased by approximately 27% compared to the third quarter, in large part due to Cisco Systems making progress reducing its larger than normal backlog related to extended lead times on certain products."
"Cisco Systems' product shipments during the quarter accelerated late in the quarter. At the same time, partial shipments of orders made up a larger than normal portion of total shipments due to continued product availability issues. These two factors together adversely impacted engineering utilization and the ability to perform certain professional services projects because of the lack of availability of the complete product set required to implement the total solution, or the required product arriving at the customer location late in the quarter."
"While we believe that Cisco Systems made substantial progress on shipping previously backordered products during the quarter, extended lead times for many products continued through the end of the fourth quarter and continue at this time."
It's also my belief that INX's issue with Cisco only making partial shipment of its orders reveals the "main cause" of Cisco's accounts receivable soaring $618 million more than Cisco's net sales increased, a very "big red flag" in my personal opinion.
