From many comes one

Cisco joins growing trend of pooling public-sector groups to boost sales, services

Cisco Systems Inc.'s federal contract vehicles include:

  • COMMITS: Commerce Information Technology Solutions Next Generation indefinite-delivery, indefinite-quantity
    task-order contract to provide federal agencies with IT solutions.
  • ESC III: Electronic Commodity Store III offers computer hardware and software to government users.
  • FirstSource: Homeland Security Department contract provides all DHS agencies with a full array of IT
    products and services.
  • ITES-2H: Army Information Technology Enterprise Solutions 2 Hardware procurement contract.
  • NetCents: Air Force contract for network-centric systems, equipment and processes.
  • Networx: General Services Administration's new telecommunications awards to replace the FTS 2001
    and Crossover contracts.
  • SEWP: NASA Solutions for Enterprise-Wide Procurement governmentwide acquisition contract provides
    IT products for all federal agencies.
  • VETS GWAC: The Veterans Technology Services contract is the first GWAC set aside for servicedisabled,
    veteran-owned small businesses.
    Source: Cisco Systems

Cisco Systems Inc. is expanding its
Government Services unit to include
its state and local, education, and
health care services groups. The new
Public Sector Organization formally
begins operations Aug. 1, the start of
Cisco's fiscal year.

The idea is to provide more focus and
direction on government customers,
said Bruce Klein, formerly vice president
of U.S. federal sales,
who leads the new group as Public
Sector Organization vice president.
Patrick Finn has succeeded Klein as vice
president of the federal group within
the newly enlarged organization.

Under the previous arrangement,
state, local, education and publicly
funded health care services were
spread across several business lines,
Klein said. The realignment, which
was on the drawing board
for two years, is an attempt
to blend Cisco's various systems
and solutions that were previously
separate and broaden its offerings.

For example, within Cisco's United
States, Canada and Japan business
division, separate groups included
enterprise customers, commercial customers
for smaller clients, and the federal
business sector. In addition, there was a services
reseller business, which included AT&T
Inc., Verizon Inc. and Qwest
Communications Inc. "State, local, education
and publicly funded health care was mixed in
the enterprise" and "commercial groups," he
said.

And as the company integrated its voice,
text, video, mobility and security offerings,
"we saw a lot of benefit to the customer
by being better coordinated from an
organizational perspective," Klein
added.

UNDER ONE UMBRELLA

Last year, in anticipation of the new
structure, Cisco created a "gov-ed" unit
that brought together employees who
worked with clients in federal government
and education. They eventually
were transferred into the new Public
Sector Organization, along with the
state, local, and publicly funded health
care employees to serve clients in those
markets.

"So we have sales and engineers and
managers who have already worked in
that environment, but now we have
them all under one umbrella," Klein
said, although no one has had to move to a
new location.

When fully staffed, the public-sector group
will increase to about 1,500 employees ?
including a sales force, engineers and various managers. They will all help in solutions creation
and development, finance and legal
issues, reseller channels, and marketing, Klein
said. "It's a very big organization. We will have
people all over the country"
Cisco has also formed a shared-services
organization that will extend solutions across
the public sector, Klein said. For example, the
company has developed a force protection
solution that includes technology from several
systems providers.

The solution was designed for the Defense
Department to protect military bases from
intrusions and attacks, he said, but it could
also be applicable for college campuses.
"We're talking to Virginia Tech exactly about
how that could help them avoid [a repetition
of] the problems they had last year," Klein
said, referring to the April 2007 shooting
deaths of 32 students and faculty members by
a lone gunman.

The realignment also has other benefits
because it mirrors what some of Cisco's partners
have done, Klein added. "A lot of the
partner community has already organized
around a public-sector go-to-market"
arrangement, he said, citing as examples
Northrop Grumman Corp., Apptis Inc. and
GTSI Corp.

Klein said Cisco's public-sector structure is
a good model for companies with federal
clients that are looking to expand their
business.

"The way you go to market in state and local
and education is very similar to how you go to
market in federal. You have to understand
contracts, you have to understand the [request
for proposals] process, you have
to understand teaming agreements," he
said, because states and localities often have
purchasing arrangements similar to the
General Services Administration schedule
contracts. "You have to just become expert in
their regulations."

GOOD BUSINESS SENSE

What Cisco is doing makes good sense because
the federal, state and local markets are closely
linked, said Warren Suss, president of Suss
Consulting Inc., a strategic planning and federal
market research firm in Jenkintown, Pa.
"In some direct ways, the federal government
establishes networks and establishes the standards
that the state and local entities need to
follow."

Suss said the federal government is going to
become an important test bed for solutions
that will also be adopted by state, local and
commercial entities. "Processes like capture
management, proposals and the tracking of
opportunities, and opportunity pipelines and
review boards, that kind of discipline is very
transferable from the federal," he added.
Capture management involves the integration
of corporate activities to win government
contracts.

"The thing you have to watch out for is taking
a one-size-fits-all approach and using a
cookie cutter template that's developed for the
federal to try to apply to all state and local
requirements. That won't work," Suss said.

"Having a public-sector focus rather than
segmenting the public sector into its various
dimensions is something that we're seeing
more of," said David McClure, managing vice
president at Gartner government.

"This is an era in public-sector IT where
clients are looking for shared services, for consolidation,
for enterprisewide solutions," he
said. "I think that's what's driving a lot of it."

McClure cited as an example Oracle
Corp., which he said has decided to combine
its federal, state and local government, higher
education, and K-12 education sectors into a
public-sector client base. Gartner has also
done somewhat the same thing, he added.

"We're actually looking at higher ed, health
care and government from a common
research perspective," he said. "That's very
much in line with what we see Cisco doing."

But if you bring the sectors together, the
question becomes have you lost some of the
closeness to your customer base, McClure
said.

"I don't think so. What this does, quite honestly,
can strengthen your market presence
and your client understanding because you
can leverage your solutions across these public-
sector entities."

Klein said he doesn't expect to receive any
customer feedback until at least the end of the
first quarter or possibly six months.

"The whole idea is to get closer to customers,
to be more domain experts for our
customer set and to provide solutions that are
either going to help them save money or
improve their capability."

David Hubler (dhubler@1105govinfo.com) is associate
editor at Washington Technology.

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