Cisco fosters tech sales in tough economy

June 10, 2002

BY MICHAEL KRAUSS

"Adjust the rabbit ears," my brother used to say when our black-and-white RCA television set would go out of focus. I remember thinking, "Where's the rabbit?"-only to be told in a chiding tone that "rabbit ears" were the television antenna. For you youngsters, we adjusted the rabbit ears to improve reception so we could watch The Many Loves of Dobie Gillis, a simplistic early-- 1960s sitcom about relationships, and other similarly uncomplicated bits of entertainment.

A few months ago, a new state-of-the-art rabbit ears antenna appeared on a shelf outside my office. Instead of a television signal, this antenna belongs to a Cisco Aironet 350 Series Wireless Access Point.

Since my Dell Latitude laptop came with a TrueMobile 1150 Series mini-PCI card, as soon as the access point surfaced outside my office I shed the umbilical cord of my hard cable connection office network and went mobile.

Today I can send instant messages to my colleagues, collect and reply to e-mail, and search the Internet from anywhere in the office. It saves me time and makes me more efficient-two of Cisco's main selling points for installing mobile infrastructure.

Frankly, it's a great product innovation, but how do you market this kind of technology, especially in a down economy?

For answers, I dialed Mike McAndrews, director of product management for Cisco's Wireless Networking Business Unit. My first question related to the recession. Why would any self-respecting CIO want to spend money on new technology in a recession? What marketing message would motivate action?

"Sure, CIOs are stretched for budget," McAndrews said, "but if the return on investment is positive, they'll spend. Even today."

To make its point, Cisco has put together a so-called Productivity Calculator that defines the dollar savings generated by installing a wireless network. "In most cases, productivity is the key benefit to installing wireless LAN," McAndrews added.

"Our marketing challenge in this economy is changing perceptions about wireless from 'Nice to have,' to 'Gotta have: We recognize (that our clients') focus is on running lean and mean. We're showing them that wireless is a means to running lean and mean."

Cisco's other marketing challenges are all related to complexity. Take the product suite as an example: Cisco sells access devices such as the Aironet 350 outside my door. It also sells client devices; these are the cards that go into the computer so it can connect to the access point.

Then there are switches that link the various access point devices to the traditional data communications network; and finally, Cisco sells bridges that enable the rapid transfer of data over the air between buildings on a corporate campus.

None of these are simple, straightforward products. To work properly, they must be customized and configured by experts. McAndrews is responsible for building demand and creating a long-term profitable business for all these products.

One decision McAndrews made early on, in order to make these profits happen, relates to targeting. Cisco focuses on the business customer, not the individual consumer. Unlike communications equipment providers such as Lucent, 3Com and Motorola, Cisco's Wireless Networking group aims to sell to enterprises-companies, schools and government-- rather than intermediary service providers, such as AT&T, SBC or Verizon.

Cisco aims for IT managers who understand the technology. But McAndrews recognizes that new mobile technology is a hassle for harried IT executives, so Cisco also markets to business executives, using the productivity savings message to drive demand for mobility and to gently nudge the IT department into action.

Another challenge of marketing a technology product is after-sale service and support. Customer satisfaction or dissatisfaction is often a function of how effectively a technology provider responds to queries after the sale; Cisco invests aggressively here, and McAndrews feels it is one of the less well-known reasons for Cisco's success.

McAndrews also cultivates partners or intermediaries, such as systems integrators Accenture, PricewaterhouseCoopers or KPMG, who can recommend Cisco wireless products to their large enterprise clients.

"The marketing program has to be multi-- faceted," McAndrews added. "There's no one answer to how we get our message and our products marketed to our users."

Since Cisco prides itself on being the model Internet company, it makes aggressive use of the Internet as a communications channel. Said McAndrews, "The common joke within Cisco is that the answer to any question is: 'It's on the Web.'"

Other aspects that are critical to Cisco's marketing mix include:

• Media relations--Cisco executives work with the popular and business press to generate excitement for wireless LAN.
• Industry watchers--Cisco works closely with the industry analysts at Gartner, Dell'Oro, Cahner's In-Stat, Meta and Yankee, whose research reports and prognostications influence IT buyers.
• Cisco road map--Under a nondisclosure agreement, Cisco shares its product evolution plans with key customers, so CIOs will buy products today that will be supported in the future.

Why would Cisco share confidential information on its future product offerings with its top customers? After all, Kraft CEO Betsy Holden doesn't typically share the evolution of her product strategy in the cheese category with Kroger CEO Joseph Pichler years before the products are ready to ship.

"There's a lot of change going on in wireless today," McAndrews said. "We're in the center of the tornado market. If we don't give that kind of guidance and visibility to our customers, the reaction is, they are going to wait and not buy anything today."

Under the category of "other barriers," one of the biggest obstacles to installing wireless LAN equipment is security. Recent news articles have highlighted the vulnerability of mobile networks to hackers.

McAndrews lamented that many corporations don't turn on the basic security functions built into his products that would stop the casual hackers from penetrating the networks. He added that Cisco installed not one but two levels of security to block out the more sophisticated hackers.

What's more, Cisco shares the new security capabilities it's developed for its own products with industry competitors, because one bad apple can give a bad image to the entire wireless movement. So, Cisco shares its proprietary inventions for the good of the industry.

Having spent a good hour chatting with McAndrews I realized the days of my old rabbit ears antenna were long ago. Today's technology marketing programs are complicated, multifaceted affairs-more like HBO's Sex in the City than Dobie Gillis. Mike McAndrews at Cisco has figured that one out, and so should you.

Michael Krauss is a partner with DiamondCluster International in Chicago. He can be reached at michael.krauss@diamondcluster.com or news@ama.org.