Cisco has narrowed its quote protection window to as little as a week, in a move it says reflects the “supply-driven market reality no vendor can avoid”.
In an email to partners sent on 7 March, Cisco confirmed its quote price protection periods for Compute and Non-Compute hardware have been reduced to seven and 14 days as of 8 March, respectively.
Shared with IT Channel Oxygen by multiple partners, it was attributed to the networking giant’s SVP of Global Partner Sales Tim Coogan.
The missive follows on from one Coogan fired off last month confirming it had opened the door to post-PO price hikes and cancellations up to 45 days before shipment on Compute orders.
In the latest communication, Coogan acknowledged that some partners had asked how to respond when customers bring up competitor pricing.
“The short answer is this: Every major vendor is raising prices,” Coogan wrote.
“This is not a competitive pricing decision — it is a supply-driven market reality that no vendor can avoid. Your credibility with customers depends on you having honest conversations and setting realistic expectations with them. We are committed to giving you the pricing transparency to do that.”
When it comes to renewals, Software and Services lines classified as “New” will have a price protection expiry date of 14 days from quote approval date, Coogan added.
”I know this has not been easy. You are navigating these conversations with customers every day, and I don’t take that lightly. We are going to keep communicating as openly and as quickly as we can,” he concluded.
“It’s chaos, if I’m honest”
Talking to IT Channel Oxygen, Futurum Group analyst Alex Smith Cisco’s latest move will “put pressure on sellers and customers to move fast”.
“Customers who are not aware of the supply crunch won’t understand this, and some frustrations will be inevitable. Partners will be on the front lines receiving these frustrations,” he said.
Rob Quickenden, CTO of Cisco partner Cisilion, voiced sympathy with how Cisco is dealing with a situation analysts are now saying could spark a rise in bankruptcies in the channel, meanwhile.
“It’s chaos, if I’m honest,” Quickenden told IT Channel Oxygen.
“But from a Cisco standpoint, they’re being really open and transparent, which is a positive – we’ve had to ask for information from other vendors.”
Quickenden suspected Cisco will be lenient in the event quotes have to be re-issued.
“We’ll make sure the customer has always got an up-to-date quote,” he said of the shortened quote window.
“If there’s a variation, we’ll tell them. No-one’s saying there will be a change in price, and from what I understand from having worked with Cisco in the past, they will be open and honest [and won’t change the price] if they can avoid it – If something’s gone up by $1 they’re not going to bother passing it on.”
Quickenden labelled the lengthening of lead times a “bigger concern”.
On its earning call earlier this week, HPE CEO Antonio Neri said that DRAM and NAND now make up “over half” of the bill of materials cost of a traditional server.
HPE is also now reserving the right to hoist prices post-PO, in a trend that has ruffled feathers among partners.
“Customers we have spoken to have said, ‘well, it’s all a bit of scam really – it’s just a way to put up prices,” Quickenden said of the current shortages.
“But we’ve got to believe what they tell us about the state of where things are like. Cisco in particular are on a big comeback at the moment, so why would they make this up?”
IT Channel Oxygen has approached Cisco for additional comment, and will updated accordingly.
Doug Woodburn is editor of IT Channel Oxygen
