Cisco’s response to the clock signal failure should send a ‘signal’ (no pun intended) to all customers. The time has come for the old and expensive way of doing business (vendor lock in with HW + maintenance support) to go away. Despite the massive recall of Cisco’s (and now, Juniper’s) routers, switches and firewall appliances that suffer from the dreadful clock signal failure bug, Cisco’s technologies are proven to work. But, their model is hardware based, and its systems lock in customers for years. A smart strategy if you are Cisco shareholders, but is that what customers want?

To be fair, Cisco has offered to replace the HW for free, but with a catch. The free HW only applies to customers with a SMARTnet contract (or if within the Warranty period). If you purchased your HW 3 years ago, or don’t have a current SMARTnet contract, you’re out of luck. Partners once again have to walk on egg shells and justify unplanned costs to their customers. A clear example of the anxiety caused by the separation of CAPEX & OPEX, to everyone.

Here’s why their “proactive replacement” response falls short of a true service:

  1. It comes with conditions. Asking customers (without an active SMARTnet contract) to “buy” new HW (especially, that which run into thousands of dollars) out of the blue and without any budget whatsoever, is a shocker. What is a bank with 100’s of branches across the country supposed to do? Try convincing a CIO these days to pull a few thousand dollars out of their hat for HW or support contracts. Good luck with that.
  2. It comes with additional cost for customers. Expecting customers to buy SMARTnet contracts (priced per HW to be precise) and insure themselves against an impending failure in future, itself is a sign that legacy vendors have no real skin in the game. In modern IT deployments, customers prefer to insure their data – not HW. Data is the new gold in IT; service is the enabler.
  3. It passes the “buck” to partners. Passing the cost of onsite replacement to partners exposes the true reality of IT today. HW has commoditized so much, that it likely costs Cisco next to nothing to replace it free of charge. While the complexity involved in planning an upgrade, executing changes without disruption, hardening configurations and optimizing/restoring performance to original levels is no small task and continues to command a premium. Partners that undertake this proactive replacement activity will see a hit to their margins, especially on mid-to-large and more complex deployments. The SMARTnet fee (10-20% of HW) will barely cover the cost of engineer truck rolls, config changes, migration windows for optimization, etc. We have seen that movie before.

There is hope on the horizon for partners and customers. While legacy vendors have proven yet again that the value in networking has shifted from HW to Service (knowledge and labor), innovators are pushing the boundaries even further by offering turnkey Network-as-a-Service (NaaS). A partner or customer is no longer required to buy any HW, SW or Maintenance contract. For a single monthly or annual fee, they get everything: 24/7 monitoring, best-in-class performance, proactive troubleshooting and optimization, software upgrades and free term based refreshes. No unforeseen costs, ever. Moreover, harnessing advances in Artificial Intelligence and Machine Learning in the service model allows vendors to pass on operational cost savings to partners and customers. KodaCloud’s AI driven Wi-Fi as a Service for example is offered as a 100% Opex solution. No inventory to buy, no SW licenses or support contracts. Proactive monitoring and remediation helps partners preempt critical failures, helping them earn their customers trust. Offering Wi-Fi as a Service helps customers do more with less, and lets them stay on top of business and technology needs. Most of all, Network-as-a-Service (NaaS) puts the ownership of the network back to where it belongs – the vendor. And the customer benefits are fairly transparent – business continuity and investment protection. Not another clever vendor lock-in scheme, disguised as proactive support.

Sincerely, KodaCloud

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