• Great articles on other sites
  • RSS Great articles on other sites

  • Enterprise IT, Featured, News - Written by on Tuesday, June 12, 2012 11:41 - 12 Comments

    Cisco issues 9.2 percent Aussie price rise

    news Networking hardware giant Cisco has slapped a blanket 9.2 percent price increase on all of its products and services in Australia, giving its customers and partners just one month’s notice of the price rise.

    The company’s Australia and New Zealand financial controller Jill Allen announced the changes in an email, seen by Delimiter, to the company’s Australian sales team last week. “Cisco is giving 30 days notice of our intention to increase prices by 9.2% for Cisco Products and Technical Services,” Allen wrote. “This price increase is effective 9th July 2012. Orders received on or after this date will be processed at the revised higher price.”

    “I would ask that the Partner Team communicate this to our Gold and Silver Partners and also ask that any account manager whose customer buys directly from Cisco ensures their customers are informed of this price rise. This may result in customers bringing forward their purchase. Please ensure customers understand that all sales are considered final. Please note also that quotes produced over the next 30 days are valid until 6th July 2012 only.”

    Cisco spokesperson William Oei confirmed the legitimacy of the email. “This decision is the result of our regular business review processes that we conduct periodically and takes into consideration a number of factors. In the past, this process has also lead to reduced prices when certain conditions are met,” he said.

    The news comes as Cisco has recently been growing its revenues and profits in Australia. In the company’s local financial report filed with the Australian Securities and Investments Commission for the year ended 30 July 2011, the company detailed local revenues of $1.24 billion for that period, up 10.5 percent for the period from $1.12 billion. Local profits for that period were $7.3 million, compared with a loss of $13.07 million the previous year. Cisco’s major expenses in that period was the cost of purchasing its goods from its US parent, at a cost of $834.31 million in 2011, and employee-related expenses ($272.39 million).

    Cisco’s price rise also comes at a sensitive time for corporations selling technology-related goods and services in Australia.

    In late April, Communications Minister Stephen Conroy confirmed the Government would hold an official parliamentary inquiry into the issue of technology companies marking up goods and services for Australia, following a long-running campaign by Federal Labor MP Ed Husic. Husic has been raising the issue in Parliament and publicly since the beginning of 2011 (he was elected in the 2010 Federal Election), in an attempt to get answers from technology giants such as Adobe, Microsoft, Apple and others as to why they felt it was appropriate to price products significantly higher in Australia (even after taking into consideration factors such as exchange rates and shipping) than the United States.

    The Chair of the Committee investigating this issue, Nick Champion, said last month: “Australians are often forced to pay more for IT hardware and software than consumers in overseas markets. The Committee’s inquiry aims to determine the extent of these IT price differences and examine the possibility of limiting their impact on Australian consumers, businesses and governments. The Committee will look into the cost of computer hardware and software, including games, downloaded music, e-books, and professional software, to name a few. The Committee is looking forward to hearing from the companies who set these prices and the consumers and businesses that purchase their products.”

    I’m betting that Cisco’s Australian prices were already more expensive than its US prices, and that the company’s new price rise this month comes on top of already hefty premiums paid locally. Along with Oracle, Cisco is one of the enterprise IT companies globally already known for its expensive gear — and now it’s even more expensive.

    Personally, I find it hard to see a 9.2 percent price hike on equipment that is worth hundreds of thousands — and sometimes millions — of dollars legitimate. Up to five percent in one month? Customers could probably weather that. 9.2 percent over 18 months? That could probably also be weathered. But 9.2 percent in a single month is a little bit extreme. If I were a Cisco Australia’s partner or customer (and that’s a lot of people), right now I’d doubtless be a little frustrated with San Jose.

    It’s also not the best look for Cisco Australia’s new chief Richard Kitts, who has only been in the role since March this year. On the other hand, at least we know that Kitts is serious about the “profitable growth” which he cited upon being appointed to lead Cisco Australia in January.

    Image credit: Cisco

    submit to reddit


    You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

    1. Joe
      Posted 12/06/2012 at 11:48 am | Permalink | Reply

      Plenty of alternatives to Cisco people, don’t get robbed just because our economy is strong!!!

      • Posted 12/06/2012 at 12:04 pm | Permalink | Reply

        I hear HP’s ProCurve is doing quite well. There is a great deal less competition in the market now that Nortel has broadly exited.

      • Joe
        Posted 13/06/2012 at 12:23 pm | Permalink | Reply

        I didn’t want to name names, but since everyone is doing it then please try ADTRAN. :-)

    2. Daniel Myles
      Posted 12/06/2012 at 1:04 pm | Permalink | Reply

      Another resource to use for my IT Price Inquiry submission :) Will have to do some further digging though.

    3. Dan
      Posted 12/06/2012 at 2:30 pm | Permalink | Reply

      Let’s see how this shapes up when Parliament takes the IT industry to the cleaners. I bet it will quickly become ammunition for any supporters of the “Aussies get ripped off” brigade.

      I think anyone who has thought about grey imports will take a closer look at that option now if they haven’t taken the plunge already

    4. Nobby6
      Posted 12/06/2012 at 4:04 pm | Permalink | Reply

      Juniper has been growing in this region, I guess in 30 days time, they will grow a little faster.

    5. Posted 13/06/2012 at 3:49 pm | Permalink | Reply

      I don’t understand why they don’t just have a global price book. I work for a company that manufactures network equipment and we have one price across the globe. Aside from local taxes such as customs duties everyone pays the same.

    6. Zwan
      Posted 14/06/2012 at 7:13 am | Permalink | Reply

      Clap clap clap. Cisco just painted a bullseye on their forehead.

      Maybe they didnt realise that there is a parliamentary enquiry

    7. snerd
      Posted 14/06/2012 at 10:49 am | Permalink | Reply

      Hahaha – people still buy Cisco at list price?

      • Posted 15/06/2012 at 11:34 am | Permalink | Reply

        Sure, no one ever pays list price, but at the same time I doubt Cisco will increase their end-user discounts in line with this price hike…

    8. Sean Doyle
      Posted 15/06/2012 at 11:04 am | Permalink | Reply

      I really dont understand this, Australia’s price list is already at least 20% higher than the rest of the world. Also the explanation given to this is very poor, all I can decipher from this is that they want to make more profits.

    9. Robert Collins
      Posted 06/07/2012 at 11:39 am | Permalink | Reply

      Good time to consider Huawei perhaps ?

    Leave a Comment


  • Get our 'Best of the Week' newsletter on Fridays

    Just the most important stories, one email a week.

    Email address:

    Follow us on social media

    Use your RSS reader to subscribe to our articles feed or to our comments feed.

  • Most Popular Content

  • Enterprise IT stories

    • Super funds close to dumping $250m IT revamp facepalm2

      If you have even a skin deep awareness of the structure of Australia’s superannuation industry, you’ll be aware that much of the underlying infrastructure used by many of the nation’s major funds is provided by a centralised group, Superpartners. One of the group’s main projects in recent years has been to dramatically update and modernise its IT platform — its version of a core banking platform overhaul. Unfortunately, the $250 million project has not precisely been going well.

    • Qld’s Grant joins analyst firm IBRS peter-grant

      This week it emerged that Peter Grant, the two-time former Queensland Whole of Government CIO (pictured), has joined well-regarded analyst firm Intelligent Business Research Services (IBRS). We’ve long had a high regard for IBRS, and so it’s fantastic to see such an experienced executive join its ranks.

    • Westpac dumps desk phones for Samsung Android mobiles samsung-galaxy-ace-3

      The era of troublesome desk phones tied to physical locations is gradually coming to an end in many workplaces, with mobile phones becoming increasingly popular as organisations’ main method of voice telecommunications. But some groups are more advanced than others when it comes to adoption of the trend. One of those is Westpac.

    • Ministers’ cloud approval lasted just a year reverse

      Remember how twelve months ago, the Federal Government released a new cloud computing security and privacy directive which required departments and agencies to explicitly acquire the approval of the Attorney-General and the relevant portfolio minister before government data containing private information could be stored in offshore facilities? Remember how the policy was strongly criticised by Microsoft, Government CIOs and Delimiter? Well, it looks like the policy is about to be reversed.

    • WA Govt can’t fund school IT upgrades oops key

      In news from The Department of Disturbing Facts, iTNews revealed late last week that Western Australia’s Department of Education has run out of money halfway through the deployment of new fundamental IT infrastructure to the state’s schools.

    • Turnbull outlines Govt ICT vision turnbull-5

      Communications Minister Malcolm Turnbull has published an extensive article arguing that the Federal Government needed to do a better job of connecting with Australians via digital channels and that public sector IT projects needn’t cost the huge amounts that some have in the past.

    • NZ Govt pushes hard into cloud zealand

      New Zealand’s national Government announced a whole of government contract this morning for what it terms ‘Office Productivity as a Service’ services. This includes email and calendaring services, as well as file-sharing, mobility, instant messaging and collaboration services. The contract complements two existing contracts — Desktop as a Service and Enterprise Content Management as a Service.

    • CommBank reveals Harte’s replacement whiteing

      The Commonwealth Bank of Australia has promoted an internal executive who joined the bank in September after a lengthy career at petroleum giant VP and IT services group Accenture to replace its outgoing chief information officer Michael Harte, who announced in early May that he would leave the bank.

    • Jeff Smith quits Suncorp for IBM jeffsmith4

      Second-tier Australian bank and financial services group Suncorp today announced that its long-serving top technology executive Jeff Smith would leave to take up a senior role with IBM in the United States, in an announcement which marks the end of an era for the nation’s banking IT sector.

    • Small business missing the mobile, social, cloud revolution iphone-stock

      Most companies that live and breathe the online revolution are not tech startups, but smart smaller firms that use online tools to run their core business better: to cut costs, reach customers and suppliers, innovate and get more control. Many others, however, are falling behind, according to a new Grattan Institute discussion paper.

  • Blog, Enterprise IT - Jul 5, 2014 13:53 - 0 Comments

    Super funds close to dumping $250m IT revamp

    More In Enterprise IT

    Blog, Telecommunications - Jul 5, 2014 12:12 - 0 Comments

    What should the ACCC’s role be in guiding infrastructure spending?

    More In Telecommunications

    Analysis, Industry, Internet - Jun 23, 2014 10:33 - 0 Comments

    ‘Google Schmoogle’ – how Yellow Pages got it so wrong

    More In Industry

    Blog, Digital Rights - Jun 30, 2014 22:24 - 0 Comments

    Will Netflix launch in Australia, or not?

    More In Digital Rights