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Gartner Says Companies Must Act Now as Cisco Prepares Maintenance Price Adjustments; Analysts Advise Enterprises to Negotiate Agreements Before July 1 Price Alterations.



Business Editors

STAMFORD, Conn.--(BUSINESS WIRE)--June 24, 2002

Cisco Systems “Cisco” redirects here. For other uses, see Cisco (disambiguation).
Cisco System,Inc. (NASDAQ: CSCO, HKSE: 4333 ) is an American multinational corporation with 54,000 employees and annual revenue of US $28.48 billion as of 2006.
 will be adjusting its maintenance pricing fees on some of its products beginning July 1, so companies must review their maintenance strategies immediately to ensure their costs are as low as possible, according to according to
prep.
1. As stated or indicated by; on the authority of: according to historians.

2. In keeping with: according to instructions.

3.
 Gartner, Inc. (NYSE NYSE

See: New York Stock Exchange
: IT and ITB ITB Invitation To Bid
ITB In The Beginning
ITB Internationale Tourismusbörse (German)
ITB In The Business (aka in the business service industry)
ITB Intrathecal Baclofen Therapy
).

There will be price increases of 5 percent to 10 percent for older router product families (4500/4700 and 7500), as well as price increases averaging 20 percent for the newer Content Engine family. Cisco is also lowering some prices. There will be price reductions of 15 percent to 35 percent for its Software Application Support (SAS (1) (SAS Institute Inc., Cary, NC, www.sas.com) A software company that specializes in data warehousing and decision support software based on the SAS System. Founded in 1976, SAS is one of the world's largest privately held software companies. See SAS System. ) and Software Application Support plus Upgrades (SASU SASU Société par Actions Simplifiée Unipersonnelle (French: One-Man Simplified Joint Stock Company)
SASU Software Application Support Plus Upgrades
SASU Serviço de Atendimento de Situações Urgentes (Portugal) 
) programs, as well as price adjustments for other products.

"We recommend that Cisco customers extend their maintenance contracts to lock in the old rates, assuming that they can still space out payments over the life of the maintenance contract," said Mark Fabbi, vice president and research director for Gartner. "Remember to negotiate maintenance rates before making any new purchases because this is the only time the enterprise has leverage. Since these products will remain on the company's network for a period of time, take advantage of multiyear commitments to increase discount levels."

Gartner also recommends that companies investigate third-party maintenance offerings, but enterprises need to be aware of the risks.

"The enterprise is one step removed from manufacturer support with a third-party offering, so the company loses some control of the problem escalation process," said Lawrence Orans, senior analyst for Gartner. "Nonetheless, third-party maintenance can offer major savings over direct Cisco maintenance programs."

Companies should try to negotiate additional discounts for lightly configured chassis products. If enterprises use standard configurations instead of the most advanced modules, they likely overpay o·ver·pay  
v. o·ver·paid , o·ver·pay·ing, o·ver·pays

v.tr.
1. To pay (a party) too much.

2. To pay an amount in excess of (a sum due).

v.intr.
To pay too much.
 for maintenance and can use this to negotiate a better discount.

Gartner analysts said some companies are probably paying for too much maintenance.

"Not all of the enterprise's network may need the highest level of maintenance. Companies should consider reducing coverage for some locations or products to next-business-day levels," Fabbi said. "Older commodity products, in a stable environment that have a simpler software makeup, such as workgroup switches A network switch designed for LAN traffic within an enterprise. Contrast with carrier-class switch. , may not need maintenance coverage at all. Keeping a couple spares may be a more cost-effective approach."

About Gartner, Inc.

Gartner, Inc. is a research and advisory firm that helps more than 11,000 clients understand technology and drive business growth. Gartner's divisions are Gartner Research, Gartner Consulting, Gartner Measurement and Gartner Events. Founded in 1979, Gartner is headquartered in Stamford, Connecticut Stamford is a city in Fairfield County, Connecticut, United States. According to 2006 Census Bureau estimates, the population of the city is 119,261, making it the fourth largest city in the state. , and has 4,300 associates, including 1,200 research analysts and consultants, in more than 90 locations worldwide. The company achieved fiscal 2001 revenue of $952 million. For more information, visit www.gartner.com.
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Publication:Business Wire
Date:Jun 24, 2002
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