The Background Behind Cisco’s Chest Pounding

Posted on: March 9, 2010
Posted in Strategy

Over the past few weeks, the blogosphere hype machine has been in a tizzy, counting down to March 9th when Cisco would “forever change the internet“. Today folks were “disappointed”—turns out Cisco didn’t really change anything (all they did was release a new core router—their bread and butter business).

As background, consumers DO NOT CARE about core routers.

So what did Cisco do? They got all the trade publications going nuts for what Cisco could possibly do. They were going to release an Apple-TV like STB, become an ISP to compete with Google, etc etc. Notice how much of the talk was around Google and Apple. More on this later.

Even Om Malik at gigaOM got this incredibly wrong.

“And lo and behold, Cisco later emailed us an invite for an event on March 9, where the company “will make a significant announcement that will forever change the Internet and its impact on consumers, businesses and governments.”

Put two and two together and you can tell that something’s up. Ah, nothing like threat of Google to get technology companies re-energerized.”

I got in a debate with Om directly after his suggestion that March 9th would hold some mega-uber Cisco announcement that would pair them up against Google. Here was my response:

“This was a poorly written article with a sensationalist headline.

Just because Goog is going to test a broadband deployment doesn’t mean that Cisco responded to somehow 1-up Google. Cisco hasn’t even been in the broadband / SP business, other than on the edge with cheap boxes aka Linksys. I wrote up more about Goog’s reasons for pulling the trigger on broadband here.

Though these economics could also spur Cisco to move, the fact is neither one of these companies is even in this market today, and each gets a net benefit from the others actions here – not a zero sum game.”

Om then sent me the following tweet, suggesting the overlap between Cisco/Google is destined to happen.

The Background Behind Cisco's Chest Pounding

Fast forward to today March 9th: Just a boring CRS-3 announcement, a platform people have known about it for years (MANY years—I personally met with Cisco about the platform back in 2005, and even then the platform was in its final architectural phases).

Yes, the new Cisco platform is a key part of the upgrade to the core internet going forward. Blah blah blah. But it’s not revolutionary, and it’s not a step-function enabler to consumers, even when it’s deployed in mass, which will be years away.

So why did Cisco announce the “we are going to change the internet forever” bit a month ago?

  1. Cisco is really trying to become a vertically integrated platform company, and this is their way of buying relevancy to the consumer. That’s the real news here. Cisco wants consumers to pay attention when they speak nownot IT managers (that was the old Cisco). Rememeber, their new tag-line is “the human network”. Cisco needs relevancy with consumers to push set top boxes, home routers, femtocells, flip HD cameras and the like.
  2. Cisco is trying hard to steal back some of the PR hype from Apple and Google—see this great CNET report about how GOOG and APPL get almost all of the limelight these days when it comes to press mentions. Cisco didn’t even make the top 10. Cisco doesn’t like this now that they are trying to sell to consumers (in past it didn’t matter because IT managers don’t care what’s in the mainstream press).

I don’t argue that Cisco will compete with Google *a little* more in the future, but the overembellished overlap with Google isn’t likely to play itself out, despite what the hype machine wants you to believe… (not a direct shot to Om’s coverage, which I like overall).

The real reason why Cisco is pushing so hard is they need YOU (the consumer) to care about their platform and strategy.

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