CISCO CONTRACT RISK OVERVIEW
Cisco’s growth strategy is dependent on preserving annual spend levels and deterring attrition of licenses. As a method to support their growth strategy, Cisco uses terms and conditions to eliminate the feasibility of switching solutions or reducing annual fees. In this Cisco report, we dive into the top Cisco contract ‘Gotchas’ used to lock in customers and continually drive cost increases. The Cisco contract language that is addressed in this report include:
1. Cisco Knowledge Worker Definition
A Cisco Enterprise Agreement bundles all software, support, subscriptions, and maintenance together under one agreement. All items included in this bundle are assigned to "Knowledge Workers", which Cisco defines as anyone who "qualifies" to use them. Unfortunately, Cisco utilizes this broad categorization to drive many customers to over-purchase. This section explains how deal-makers can counteract the most common area of over-purchase in a Cisco deal by re-evaluating and redefining who their true Knowledge Workers are.
2. Cisco Renewal Increases and Caps
In a Cisco EA, there's typically no renewal language included. This means Cisco users are not protected by a certain price increase threshold should their prices change at renewal. In this section, we detail what Cisco customers can do to form an effective negotiation position and prepare for potential price increases.
3. Cisco True Forward & Verification
Through its "Verification" process, Cisco can request deployment information at any time to verify that a customer is only using what they are contractually obligated to. In the event of usage discrepancies, Cisco uses a "true forward" process to bring customers into compliance. But the ambiguity surrounding Cisco's true forward pricing leaves Cisco customers exposed to repricing and/or additional true-up fees. This section details the risks associated with Cisco's true forward contract terms.
Cisco contract terms and conditions are an integral part of their supplier strategy. Cisco will not concede to competitive terms without a strong negotiating position, because its success is tied to maintaining their standard contract language. To execute a successful Cisco deal, negotiators need to be wary of all Cisco contract risks and ways to protect their organization from future cost increases. For additional assistance on your Cisco purchase, review some of the other ClearEdge resources listed below to help plan your strategy and mitigate risk.