Cisco Systems Plays The Field

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Cisco Systems Plays The Field

By Shannon Henry

Michael Carpenter photo Cisco's Paul Cantwell

Cisco Federal in Herndon, Va., makes a whopping 92 percent of its revenue through its 400 and counting integrator partners.

If the whole corporation, which in 1996 reaped $4.1 billion in revenues, follows that lead, San Jose, Calif.-based Cisco could well become the No. 1 customer for systems integrators.

Paul Cantwell, Cisco's director of federal government channels, said the federal division will announce significant new partnerships with three integrators over the next few months as it steps up its integration strategy even more.

The imminent partnerships are aimed at expanding Cisco's reputation as a General Services Administration schedule player. Cisco is a pre-eminent developer of technology products such as routers and switches that are used by companies worldwide to shuttle data around communications networks.

"[Cisco CEO John] Chambers says the next phase of growth for Cisco will be supported by global systems integrators," Cantwell said. "Integrators are critical to our success."

Simply put, the integrator needs Cisco for its name and high-quality hardware. Cisco needs the
integrator to put together the whole network and make it work. "One relies on the other," said Cantwell, who joined Cisco four months ago after cutting his teeth on jobs at Digital Equipment Corp. in Maynard, Mass., Sysorex International Inc. of Mountain View, Calif., and Chantilly, Va.-based Government Technology Services Inc.

"Cisco is a marquee name," agreed Douglas Schmidt, managing director of corporate finance at Legg Mason Wood Walker Inc. in Baltimore. "Clearly, if you have any systems integration or networking capability and you're selling Cisco, you're getting good margin service work," he said.

The Cisco federal partnering strategy has been fired up lately by new technologies tied to the Internet and increasing demand in voice and data communications. "The network has become such an important part of the government," Cantwell said.

Cisco will form a joint venture with just about any company that its customers want. Integrator partners range from Plano, Texas-based Electronic Data Systems and Unisys Corp. in Blue Bell, Pa., to telcos AT&T in Basking Ridge, N.J., and Sprint of Kansas City, Mo., to distributors such as Chantilly, Va.-based Comstor and Tech Data Corp. in Clearwater, Fla.

If the customer wants a huge global integrator that's fine; if it wants a regional company, that's available, too. In the federal market alone, Cisco has about 400 partners.

"Ride around the Beltway and write down every company that has three letters and we're doing business with them," said Cantwell. "We're not fickle."

The alliance strategy is indicative of current business trends, especially toward outsourcing. Few companies are trying to do it all. "Industry wants to stick to what it does really well," Cantwell said. "The market is demanding it."