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From: phil@amdcad.UUCP (Phil Ngai)
Newsgroups: net.dcom
Subject: Cisco Systems and dealing with small companies
Message-ID: <12538@amdcad.UUCP>
Date: Thu, 31-Jul-86 21:16:57 EDT
Article-I.D.: amdcad.12538
Posted: Thu Jul 31 21:16:57 1986
Date-Received: Sat, 2-Aug-86 09:16:50 EDT
References: <890@bu-cs.UUCP> <485@hplabsc.UUCP> <58@rpics.uucp> <838@usl.UUCP>
Reply-To: phil@amdcad.UUCP (Phil Ngai)
Organization: AMD, Sunnyvale, California
Lines: 84

In article <838@usl.UUCP> elg@usl.UUCP (Eric Lee Green) writes:
>In article <58@rpics.uucp> schoff@rpics.UUCP writes:
>>People interested in CISCO should investigate the COMPANY.  Technically
>>I see no problems, but it truely is a garage-shop operation, how
>>many full time employees do they have? (< 5).
>
>Wow. This guy must not buy any computer besides IBM, because "Nobody
>wants to buy anything from some LITTLE company, right?". It is
>thinking such as this that stifles technical innovation.... you build
>a better mousetrap, then nobody wants to buy it because you're not as
>big as Imperial Business Machines.
>
>In other words, I find it a disgusting attitude... 
>-- Computing from the Bayous, --
>      Eric Green {akgua,ut-sally}!usl!elg
>         (Snail Mail P.O. Box 92191, Lafayette, LA 70509)

I think information on the size of Cisco Systems is relevant and
here's why. When we install a service, people start using it and
depending on it to get their job done. Interruptions in service are
pretty serious because our customers depend on us to meet our
commitments just as we depend on our vendors to meet their
commitments. Unfortunately there is more to a product than great
engineering. There is manufacturing and support. All the icky boring
stuff that customers seem to demand in return for their money.

We had a very bad experience with one of our vendors. We had installed
about forty pieces of their networking equipment serving about 400
users when their equipment started failing. These were the worst kinds
of failures: in the field, intermittent, weeks or months after the
installation was completed. Our vendor recognized the seriousness of
this problem and started working on it. Eventually they isolated it to
a chip vendor which "from Jan 83 to Jun 84 delivered product which
exhibited separations or cracking of the metallization after about 500
hours of operation".

This was a big disaster for us and for our vendor. For 18 months our
vendor had been shipping booby trapped product. Of course, they went
back and yanked out all the bad chips, which must have cost them
greatly.  It also cost us in downtime while finding the problem and
then while cleaning out the system. We're still not finished. How many
dollars and how many manhours? I estimate our vendor had to correct
the problem in thousands of boxes. Assigning a cost of $10 to $50 per
box, we're talking as much as $100,000. As for us, we had about a
dozen failures. Let's assume 10 engineers unable to work for a day
each time a failure occurs.  12 * 10 * 8 * $40 = $38,400. (no we don't
pay engineers $40/hour, that's the burdened cost) And that's just the
cost in payroll terms, the cost in lost sales is harder to estimate
but surely larger.

When a company reaches a certain size they have enough experience to
know things like the fact that buying from the lowest bidder is not
enough. Companies like HP have armies of reliability and qualification
engineers to prevent just this kind of disaster.  HP, for example,
doesn't buy from just anyone who prints up a catalog. You have to
qualify to become a vendor for HP. This involves testing hundreds of
chips for weeks at a time, among other things.

This extra engineering is one ingredient that companies like mine look
for from their vendor, because the cost of failures are so high, and
one ingredient that a small company like Cisco is less likely to know
how to put in. I don't know much about Cisco, they may be a totally
together company but the odds are against it and Marty's comment about
their size is relevant.

Robert, just how well do you know the people at Cisco? Perhaps you
can address the issues I have raised in this article.

To say

>thinking such as this that stifles technical innovation.... you build
>a better mousetrap, then nobody wants to buy it because you're not as
>big as Imperial Business Machines.

shows a lack of knowledge about why companies buy products. Your
mousetrap may be more advanced technically but if you can't service it
like a bigger company can then I will have to consider the extra
(hidden) costs associated with such a product.
-- 
 Classical music audiences are like ivory soap: 99 44/100 pure (white).

 Phil Ngai +1 408 749 5720
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