IDC CEMA Telecommunications Newsletter July 2008   IDC CEMA (Central & Eastern Europe and Middle East & Africa) http://www.idc-cema.com/

<< Back to main page Business Help from Equipment Vendors Andy Hicks, Senior Research Analyst, Telecommunications, IDC CEMA Recently several IDC Telecoms analysts attended Cisco's annual Emerging Markets conference in London. Throughout the discussions of regional strategy and target verticals, it became increasingly clear that Cisco, still best known for heavy network equipment, is committed to organizing itself around business transformation, a shift that holds the promise of increased consulting benefits for clients in emerging markets. Business transformation sounds like the marketing tag line for services companies like Accenture and Wipro, both Cisco partners. And indeed many of Cisco's new strategic priorities are focused on traditional solutions provider targets like process improvement, systems integration, and a slate of market segments much broader than their traditional core technical audiences. In some ways Cisco is becoming a solutions provider, albeit one with extensive hardware and software product lines. Despite its increasing focus on processes and industry-specific solutions, everyone we spoke to at Cisco was adamant that it would not follow IBM on the road from hardware vendor to IT body shop. Cisco is confident that it can continue to produce innovative, high-value products rather driving revenue through services. Nevertheless, its increased focus on vertical market business cases, products that need to communicate with multiple corporate systems, and the growing complexity of its offerings all indicate that Cisco requires some native solutions capacity even as it remains dedicated to training its partners to do most of the work on established products. The company's official services departments do provide the expected range of services for the usual types of fee structures. For players in emerging markets, however, "leapfrogging" may be a way to get guidance from senior Cisco figures - or equivalent services from other equipment vendors - at a lower cost: just parlay a lack of legacy infrastructure or a major new infrastructure project into a high-profile sale that the vendor can't afford to see fail. Cisco seems likely to devote substantial resources to making sure that the first implementations of their new products are successes before they begin to transfer the resultant best practices to solutions partners. Clients have a better chance of receiving this top-level support from equipment vendors if their projects incorporate at least one of the following factors: First Implementation(s). As we note above, Cisco will devote its best and brightest to making sure that the first implementations of a new product can become case studies, and thus will provide support not only on technical issues but also on business processes. New Market. Cisco sees huge market potential in the CEMA regions and will do what it takes to be known as a major solutions provider here. Proof of concept projects in target industry segments will also be "too prominent to fail." Governmental Involvement. Cisco's emerging markets leaders admire the hunger for innovation they see in many across these markets. Regardless of political system or social structure, many CEMA governments recognize the importance of IT modernization to their countries' economic competitiveness. Equipment vendors will bend over backwards to land transformative, countrywide projects. Size. All other things equal, bigger clients will always get more attention than smaller ones. Ask for it. Put the experience of the big vendors to work by making business transformation part of the negotiations from the beginning. Expenditures on infrastructure can bring ancillary benefits in management structure, communication practices, and operational efficiency, among other things. -- -- -- -- -- -- -- -- -- -- -- -- IDC offers data-backed strategic advice for service providers operating in CEE and MEA through its Central and Eastern European and Middle East and African Carrier Transformation Strategies series and through customized research and consulting engagements. For more information, please contact Tatiana Hinova (thinova@idc.com; +420 221 423 140) or John Gole (jgole@idc.com; +420 221 423 140.) << Back to main page

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