Faced by increasing pressure from low-cost Asian competitors, Cisco plans to move away from selling individual devices and become more of a complete systems provider, chief executive John Chambers said yesterday at the company's annual analyst conference in Santa Clara.
Chambers, who expects competitors to focus on individual, low-cost products, said that Cisco's differentiation would come from offering comprehensive product lines.
The networking giant intends to "articulate the value of technology not just in terms of cost of ownership, but to create productivity for the customer that allows him to drive productivity", Chambers said.
To underline this long-term vision, Chambers promised that Cisco will publish product roadmaps up to three years out.
The focus on complete systems rather than individual products is part of an ambitious growth strategy unveiled last May.
In an effort to expand into new markets, Cisco is slated to double the number of product introductions in the current fiscal year, relative to last year.
This should help the company to become the largest player in six to 12 markets, such as voice communications and home networking.
Cisco has not yet disclosed all the markets it will be targeting with future launches, claiming that doing so prematurely would tip off the competition.
The focus on solutions is a smart move, according to Curtis Price, programme director at analyst firm Stratecast Partners, because few competitors will be able to keep up with Cisco in that area.
"You have this technology avalanche. Users are trying to figure out how to match the applications to their needs," said Price.
But the analyst warned that the move will also force Cisco to compete with some of its consulting partners like EDS and IBM Global Services.
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