Lessons for Cisco in Cius Failure

When news broke late last week that Cisco would discontinue development of its Android-based Cius, I remarked on Twitter that it didn’t take a genius to predict the demise of  Cisco’s enterprise-oriented tablet. My corroborating evidence was an earlier post from yours truly — definitely not a genius, alas — predicting the Cius’s doom.

The point of this post, though, will be to look forward. Perhaps Cisco can learn an important lesson from its Cius misadventure. If Cisco is fortunate, it will come away from its tablet failure with valuable insights into itself as well as into the markets it serves.

Negative Origins

While I would not advise any company to navel-gaze obsessively, introspection doesn’t hurt occasionally. In this particular case, Cisco needs to understand what it did wrong with the Cius so that it will not make the same mistakes again.

If Cisco looks back in order to look forward, it will find that it pursued the Cius for the wrong reasons and in the wrong ways.  Essentially, Cisco launched the Cius as a defensive move, a bid to arrest the erosion of its lucrative desktop IP-phone franchise, which was being undermined by unified-communications competition from Microsoft as well as from the proliferation of mobile devices and the rise of the BYOD phenomenon. The IP phone’s claim to desktop real estate was becoming tenuous, and Cisco sought an answer that would provide a new claim.

In that respect, then, the Cius was a reactionary product, driven by Cisco’s own fears of desktop-phone cannibalization rather than by the allure of a real market opportunity. The Cius reeked of desperation, not confidence.

Hardware as Default

While the Cius’ genetic pathology condemned it at birth, its form also hastened its demise. Cisco now is turning exclusively to software (Jabber and WebEx) as answers to enterprise-collaboration conundrum, but it could have done so far earlier, before the Cius was conceived. By the time Cisco gave the green light to Cius, Apple’s iPhone and iPad already had become tremendously popular with consumers, a growing number of whom were bringing those devices to their workplaces.

Perhaps Cisco’s hubris led it to believe that it had the brand, design, and marketing chops to win the affections of consumers. It has learned otherwise, the hard way.

But let’s come back to the hardware-versus-software issue, because Cisco’s Cius setback and how the company responds to it will be instructive, and not just within the context of its collaboration products.

Early Warning from a Software World

As noted previously, Cisco could have gone with a software-based strategy before it launched the Cius. It knew where the market was heading, and yet it still chose to lead with hardware. As I’ve argued before, Cisco develops a lot of software, but it doesn’t act (or sell) like software company. It can sell software, but typically only if the software is contained inside, and sold as, a piece of hardware. That’s why, I believe, Cisco answered the existential threat to its IP-phone business with the Cius rather than with a genuine software-based strategy. Cisco thinks like a hardware company, and it invariably proposes hardware products as reflexive answers to all the challenges it faces.

At least with its collaboration products, Cisco might have broken free of its hard-wired hardware mindset. It remains to be seen, however, whether the deprogramming will succeed in other parts of the business.

In a world where software is increasingly dominant — through virtualization, the cloud, and, yes, in networks — Cisco eventually will have to break its addiction to the hardware-based business model. That won’t be easy, not for a company that has made its fortune and its name selling switches and routers.

4 responses to “Lessons for Cisco in Cius Failure

  1. Brent Salisbury

    Good read Brad, pretty bizarre it took as long as it did to put this thing down. Sounds like product development just wouldn’t let go and admit failure. It seem like just yesterday that account teams are explaining to me how cool it is to use a shoe box smashed into your ear as a phone and a laptop replacement running 2 year old droid OS with a 30 minute battery life. To your point, if Cisco is to evolve, maintain or grow market share and even add leadership/innovation if we decide to jump into the chasm of change, it had better come a hell of a lot faster than this. The Cius product line should have been murdered along with broken and siloed business units, product lines and failed ventures than they did in this case. That said the COO model with having Moore on board and clearing out the unwilling turned their ship around pretty damn well over the past year. Guessing products report up through product dev though, not sure.

    What the hell is going to keep coffee stains off my desk now that the tablet is dead? Had to get in one joke, makes me angry they announced over a holiday weekend, so many fun jokes are being squandered. It will be as old news as making fun of the PCjr or Iomega zip drives by the time Tuesday rolls around 😦 I feel cheated. sad panda.

    • Yes, the good marketing folks at Cisco made the announcement of Cius’ demise just before the long weekend, hoping people wouldn’t have the time or the inclination to pay proper respects.

      The Cius might be gone, but it shouldn’t be forgotten. 😉

  2. It was easy to tell the product was dead months ago by my visits to various cisco offices all over the world. Plenty of iPads used by Cisco employees, but I’ve never seen a Cius used by a CIsco employee in the many visits and different offices at Cisco I’ve been to. if they can’t eat their own dogfood, no one else will either.

  3. Good point, Tony. When we visited Cisco headquarters for NFD 3, I don’t think any of the presenters had a Cius in tow.

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