No firm left behind

Cisco’s new ‘consumer-friendly’ brand is making its way to the Middle East, on the back of a US$1 million marketing campaign; at the same time, the Chinese state-owned networking and telecom giant Potevio is preparing to launch a major joint venture in the region. Is enterprise networking about to fall between two stools?

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By  Eliot Beer Published  October 16, 2006

|~||~||~|Cisco’s new ‘consumer-friendly’ brand is making its way to the Middle East, on the back of a US$1 million marketing campaign; at the same time, the Chinese state-owned networking and telecom giant Potevio is preparing to launch a major joint venture in the region. Is enterprise networking about to fall between two stools? Cisco’s new brand image, described by one (possibly rather cynical) observer as “my first logo”, is designed to make its once-daunting image less technical and more palatable to consumers (read more here). Fadi Kachkouche, Cisco’s regional marketing manager, was at pains to say the move would not impact the networking giant’s enterprise customers, although he did admit the company’s focus will very much be on the home, rather than the business from now on. Meanwhile, the little-known but apparently vast Chinese state networking company Potevio – formerly known as China Putian – is poised to launch here in the Middle East in a joint venture with Saudi backing, based in Dubai’s Internet City (main story here). According to the new CEO of the joint venture, Dr Ali Saad, Potevio’s operations are divided into five main sectors, one of these being enterprise. The other four, though, are focused very much on the telco and service provider market, currently booming in the Middle East. So where does this leave the enterprise and its networking requirements? Are regional organisations that can’t aspire to the lofty heights of telcos going to get left behind in the rush for the high-end and low-end markets? Looked at one way, it doesn’t augur well. With Cisco seemingly putting its enterprise divisions on the back burner, new entrants focusing on the lucrative carrier-class end of the market, and traditional enterprise vendors such as 3Com struggling to perform, the enterprise sector could be seen as a mature market, even here in the Middle East. This view is overly simple, though. Cisco, it is true, is facing a market which is increasingly mature, forcing it to look elsewhere in its endless quest for growth. And its ability to buy its way into enterprises, both through acquisitions and aggressive spot pricing, mean this sector holds little in the way of challenges. Potevio meanwhile is bringing an end-to-end telco solution to the Middle East, hoping to cash in on the wave of competition about to sweep the region – few enterprises will be keen to take advantage of its handset and SIM-card production facilities. But the real clincher comes when regional enterprises go under the spotlight. The public sector is booming across the Gulf, with new departments springing up and massive new investments in sectors such as education and health. The construction industry is increasingly turning to converged networks from the start of a project (helping to fuel the expansion of the telcos, incidentally) – major contracts for cabling, switches and routers are coming in from contractors around the Middle East. And for existing mainstream enterprises networking has never been more crucial, with more business being done online and greater demands for security coming in. Just in one sector, banks across the Middle East are being forced to upgrade their systems to cope with new online threats and the requirements of e-banking. One thing is for certain, anyway – if Cisco’s regional enterprise customers feel the vendor is leaving them behind, there are plenty of contenders to knock the company from its perch. It will be interesting to see how the vendor achieves this delicate balancing act.||**||

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