The WSJ reported on Cisco's lackluster performance and it should not be surprising. Cisco through its long history of acquisitions has once too often overextended itself into areas that just don't pay off. Instead of delivering to its core business customers--better, faster, cheaper, easier to use and maintain--they took a different road hoping for growth.
Again, I ask why does large enterprise think that Cisco is best in class when they always aren't and while they may be the most expensive in their class--there is a difference. The WSJ reported: "The competitive market is requiring a faster roll-out of newer, lower-margin products, which means Cisco has to sell two to three times as many units to get the same revenue."
Contrast that with another vendor's latest reporting. Adtran Chief Executive Officer Tom Stanton stated:
For the quarter our combined growth areas grew 51% over the previous year, allowing the company to achieve its fourth consecutive quarterly revenue record. Moreover, each of the individual segments within this category achieved new records. Broadband Access saw revenue growth of 42% over first quarter 2010, led by the continued success of our Total Access 5000 platform. Our Internetworking category grew 48%, fueled by channel expansion and growing acceptance of new applications. Optical Access grew an impressive 86%, driven by the increasing demand for mobile data. We are pleased with the long term prospects of the markets we serve and our company's position to deliver positive results.
I spoke to Gary Bolton, VP Global Marketing at Adtran and Gary told me that Adtran is focused on sustainable growth in broadband, mobility and cloud services. Gary reminded me that Adtran is a company that grows organically and is committed to long-term sustainable growth. Adtran's efforts to add UC and UTM through the acquisition of Objectworld and a partnership with Sonicwall are part of Adtran's growing portfolio for meeting enterprise needs.
Competitively speaking, how long will it take Cisco to not have to sell two to three times as many units to get the same revenue? IF the WSJ analysis is correct then Cisco has to sharpen their pencils and their axes too.
