|
|
ONLINE FEATURES
Book Reviews
BW Video
Columnists
Interactive Gallery
Newsletters
Past Covers
Philanthropy
Podcasts
Special Reports
BLOGS
Auto Beat
Bangalore Tigers
Blogspotting
Brand New Day
Byte of the Apple
Economics Unbound
Eye on Asia
Fine On Media
Green Biz
Hot Property
Investing Insights
Management IQ
NEXT: Innovation
NussbaumOnDesign
Tech Beat
Working Parents
TECHNOLOGY
J.D. Power Ratings
Product Reviews
Tech Stats
Wildstrom: Tech Maven
AUTOS
Home Page
Auto Reviews
Classic Cars
Car Care & Safety
Hybrids
INNOVATION
& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip INVESTING Investing: Europe Annual Reports BW 50 S&P Picks & Pans Stock Screeners Free S&P Stock Report SCOREBOARDS Hot Growth 100 Mutual Funds Info Tech 100 S&P 500 B-SCHOOLS Undergrad Programs MBA Blogs MBA Profiles MBA Rankings Who's Hiring Grads | |
AUGUST 9, 2004
By Peter Burrows A Downside to the "Cisco Standard" [Page 2 of 2] "IMPRESSED WITH THEIR INTEGRITY." This all stems from an $8 million contract the city of San Jose awarded to Unisys (UIS ), the big mainframe-maker that has now become a computer services company. When telecom giant SBC Communications (SBC ), another contender, complained about problems with the bidding process, the city council began an investigation to see if Unisys had received unfair advantages. In the process of looking into SBC's allegations about Unisys, the San Jose City Council also grew concerned about Cisco's role in the process. While San Jose Chief Information Officer Wandzia Grycz publicly declared that Cisco had no role in defining the proposed network, a long list of e-mails and other material led the city to decide that the government's dealings with Cisco were inappropriate. San Jose city officials decided to cancel the Unisys contract. It will put the work back out to bid -- with no stipulation that the gear must come from Cisco. A final report on the flap is expected Aug. 9. While city auditor Silva won't say whether Grycz or anyone else will be fired or reprimanded, he says it's doubtful that Cisco will come under fire. Rather, he commends Cisco for providing dozens of e-mails between the company and city tech staffers. "It's unfortunate that they're getting some bad press," says Silva. "Had it not been for their openness and willingness to share information, we couldn't have done this investigation the way we did. I was extremely impressed with their integrity." Mayor Gonzalez also denies any connection to political contributions from Cisco executives totaling $13,000 to his campaigns since he was elected in 1998. While Cisco is a hometown company and a major political force, Gonzalez insists he had no involvement with the contract -- and that he's not in the pocket of any of tech's local powerhouses. TURNED DOWN COLD. He says John Chambers, Cisco's CEO, personally appealed to him earlier this summer to change the zoning on some Cisco commercial property that Cisco had purchased but never developed. Instead, Cisco wanted the land to be rezoned, so it could be used for the still-booming residential market. When Gonzalez refused the request, Chambers accepted the answer and let it drop, says Gonzalez. "Sometimes Cisco gets what they want [with me], and sometimes they don't," he says. So what's it all mean? Certainly, Cisco's dominance is in no danger. Even Gonzalez says the winning bid will likely include some Cisco gear -- simply because the company is such a major player. But if more controversies like the one in San Jose pop up, Cisco may have to do some hard thinking about the extra responsibilities that come with its dominance. "There's an industry joke that goes: How many Cisco salesmen does it take to make a sales call?" says Wilson, the JMP analyst. Answer: "One to meet with you, one to bring the donuts, one to schmooze your secretary, and two to meet with your boss." In most cases, that's just good old-fashioned capitalism. But when a company is so dominant that government buyers start giving it business it hasn't even bid for, Cisco may have to find ways to hold itself to a different standard -- or risk losing that rep as tech's squeaky clean monopolist.
 Burrows is BusinessWeek's computer editor
BW MALL
SPONSORED LINKS
Buy a link now!Get BusinessWeek directly on your desktop with our RSS feeds.  Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | |
 Copyright 2004, by The McGraw-Hill Companies Inc. All rights reserved.Terms of Use | Privacy Notice |
Printer-Friendly Version
