IBM launches Cisco support price war

Cisco is less than thrilled that IBM has launched what appears to be a price war in the market for Cisco hardware maintenance contracts.

Cisco is less than thrilled that IBM has launched what appears to be a price war in the market for Cisco hardware maintenance contracts.

Big Blue, a Cisco partner in New Zealand since 2000, told Computerworld last week that it was able to offer contracts for up to 90% less than “competitive offerings”.

Cisco New Zealand channel manager Suzanne Hansen says while Cisco is happy to see IBM, an established global partner, promote Cisco in New Zealand, “not knowing all of the details of its new service offerings, our concern would be that its discounting of network services will devalue the importance of this support”.

IBM says its offering, which can be as low as $166 a year for a contract looking after two Cisco Catalyst 2950 switches with 48 ports each, is the equal of any of its competitors in terms of back-up and support.

The service, branded Netserv by IBM, has been available since mid-2000.

“After an exercise re-evaluating the failure profile of the equipment, we revised our prices down,” business development executive Gary Elmes says.

He says according to IBM’s information, comparable services to the $166 Cisco Catalyst Netserv package come in at around $1200 to $1800.

“Savings for enterprise backbone equipment such as the Catalyst 6500 series are typically less, but can still be up to 20%.”

Willem Bos, competitor Logical’s IT and services general manager, says the two Catalyst 2950 and 48-port example cited by IBM is below the minimum service level Logical offers.

IBM’s $166 offering involves next-business day response “and Logical doesn’t have an equivalent standard offering; our minimum level of service is for business hours only, with guaranteed on-site response of less than four hours.

“Few of our customers can afford downtime of 16 to 30 hours as per the IBM offering, but where the equipment is not supporting critical business operations, Logical would suggest a service level of a guaranteed eight-hour response with full spares support, which would cost approximately $200.”

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