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Why Cisco customers are willing to pay a premium

I think there is a more important reason to invest in Cisco Systems for hardware, it's their vision! When we buy into Cisco solutions, we invest in vision and an architecture that is often future upgradeable.

Sanford, ME:   Mon, 7/22/13 - 6:15pm    View comments

CiscoYankee GroupIt's been more than 7-years since Boston based Yankee Group published its thought-provoking DecisionNote Question and Answer Analysis:

Is Cisco Worth the Premium?

In my opinion, price and perceived value are an interesting concept. Most of us have heard the old adage "you get what you pay for." I think this saying stretches across all industries.

I often send up an eye brow when I hear this expression because sometimes it simply isn't true but, other times it is. For example, my mom drives an expensive German engineered car. She's getting what she paid for alright. She keeps paying for a car that looks impressive but, the service and maintenance costs for the frequent repairs has her questioning whether she is really getting the quality she paid extra for. My guess is that she was sold on the marketing "German engineering" and that the car doesn't deliver on quality but, does deliver on first impressions. It makes me realize how vain humans can be when it comes to important purchasing decisions and I think many of us are guilty of this.

Why are so many customers buying into the Cisco solution when there are so many cheap knock off solutions that have many of the same features? In our organization we have Cisco firewalls, routers and switches. We also have the same hardware from Enterasys, Extreme, SonicWALL, Adtran, etc. and it all works great. Why then pay extra for Cisco? Is it their support, their features, their quality, their reliability, their brand?

Keep in mind that often times when you purchase from Cisco, the hardware is the result of a company acquisition. For this reason, the quality and reliability could vary across their vast product lines. If something is malfunctioning, you will rely on your Cisco support contract to hopefully see the issue through to resolution. You may have invested in Cisco for their support, their reliability or both. I think there is a more important reason to invest in Cisco Systems for hardware:

It's their vision!

Our company has partnered with several companies for NetFlow Collection and Reporting. Cisco is at the top of the bunch and here's why; for such a massive company, I'm often surprised at the responsiveness of their engineers when we email them with questions. They respond nearly all hours of the day. Here are some other observations:

  • They participate in their own and even other vendor forums.
  • They seek us and other vendors out when they are in early development of an idea.
  • They innovate within the NetFlow and IPFIX technologies (i.e. our company's primary focus).
  • They have been able to push many new features down to older 'legacy' hardware investments made by their customers.
John ChambersFrom my perspective which certainly is not seeing the entire company, I see passion, dedication and a whole lot of smart-motivated employees. How did they create a culture like this?

I believe creating a workforce with passion starts with strong leadership. If you have ever listened to John Chambers speak, you know that he is a man with vision and he shares his thoughts and ideas in his blog. How many companies have a leader, CEO or President that blogs on a regular basis? For many at Cisco, John's passion has become contagious. I believe in the philosophy that leadership is shown by example.

When we buy into Cisco solutions, we invest in vision and an architecture that is often future upgradeable. Sure, Cisco has problems, faults and even bugs. Looking at the company from my position, I'm still very impressed.

What does Cisco look like from your perspective?

Related document:

Yankee Group: Is Cisco Worth the Premium?

Related story:

Network World:    Cisco boss talks about how SDN fits into its architecture, what Insieme is all about and why the Internet of Everything matters to IT pros

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What does Cisco look like from your perspective?

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