Cisco diversifies to boost Euro sales

Sales Chambers will not sell direct despite US success.

Cisco Systems chief executive officer John Chambers is hoping direct involvement with customers will help it grow its sluggish European business, as the vendor pushes sales into smaller companies and different markets.

Despite success in the US and Asia, Cisco has grown more slowly in Europe, but Chambers said he has found ways to boost sales outside the US.

'Customer satisfaction and support is the key. We are giving them a direct touch - an option for customer support with our partners, and not competing against them. For the first time in four years, European customer satisfaction is up.'

Speaking after his keynote speech at Comdex, Chambers emphasised that Cisco was educating customers and resellers that 'direct touch' does not mean direct sales, despite the massive success of its direct sales operation in the US.

He said the European management changes introduced 18 months ago have helped, and he hopes Cisco can challenge its competitors when selling to small to medium-sized businesses.

'3Com has more effective channels in Europe, especially at the low end,' Chambers admitted.

'3Com and Bay Networks have done a better job on small and medium-sized businesses, but we are now keeping up.'

Chambers admitted that 85 per cent of Cisco's sales through distribution are aimed at the enterprise market, but said steps are being taken to attract smaller businesses.

Although Cisco will acquire between 10 and 15 companies in the next year, Chambers said it will not prove as big a challenge as 3Com's $6.7 billion merger with US Robotics because Cisco has 'mastered the art of acquisition'.

Chambers claimed Cisco has managed to hold on to 94 per cent of its acquired staff, compared with an industry average of 70 per cent.