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Cisco aims to jazz up its stodgy image
Wednesday, September 06, 2006

At a Cisco Systems Inc. sales meeting in Las Vegas last month, new marketing chief Susan Bostrom took the stage to deliver an unorthodox message: Cisco, she said, was no longer just a company that provides network equipment. Instead, she said, the Silicon Valley tech giant would change how consumers communicate and view television.

For Cisco, based in San Jose, Calif., the message marked a big break from its past as a corporate technology supplier, and it's now up to Ms. Bostrom to spread this message widely. She will publicly begin that task Wednesday, when the company holds a financial-analysts meeting in New York.

At the meeting, Cisco is expected to broadly outline a plan to change its image and become a more consumer-oriented company.

"We want to share with the financial community the story of how the sizzle is back at Cisco," says Ms. Bostrom.

Under its new plan, Cisco will begin an advertising campaign and introduce a logo change on Oct. 2. The marketing drive will extend into new-product placement in TV shows and movies, as well as billboard ads at sporting events. The company's message will also creep into blogs and interactive social-networking Web sites. With the many sectors Cisco operates in -- from back-office technology to movie and music downloads -- the company wants customers and consumers to see the unifying theme: the network.

Such marketing moves are a turnabout for Cisco, which has historically been equated with just selling gear such as routers and switches, the nuts-and-bolts equipment that companies use to build networks that carry Internet and email traffic. For years, this corporate technology powered Cisco's growth: Nearly 60 percent of its $28 billion in annual revenue is generated by the sale of routers and switches.

But since the tech bust earlier this decade, Cisco's growth has slowed. To offset that, the company under Chief Executive John Chambers has moved into new terrains, from set-top boxes with its recent $6.9 billion acquisition of Scientific-Atlanta Inc. to Internet phone calling. By getting into these new areas, Cisco is aiming to enter consumers' living rooms with gear such as home-networking equipment, wirelessly networked DVD players, and services such as video on demand.

In its recently reported fiscal fourth quarter, Cisco showed signs that such moves were paying off: Scientific-Atlanta produced 7 percent of Cisco's $8 billion in revenue and the company forecast strong growth for its current quarter.

Still, the perception of Cisco as simply a mass producer of routers and switches has remained. Now as its business begins to touch consumers and others outside information-technology departments, the company wants to alter its profile. "There is a great deal of importance in how a company accurately defines itself," says Charlie Giancarlo, Cisco's chief development officer. "We need to clarify our role."

That task has now fallen to Ms. Bostrom, who was appointed Cisco's chief marketing officer in January, and it's a challenge. "Cisco is not a Sony or an Apple Computer," says David Passmore, an analyst with the Burton Group, a market-research firm. "It doesn't have the mind share that other consumer electronics or tech companies have."

Even executives with close ties to the company say Ms. Bostrom has no easy task. "It's a tough job," says Carol Bartz, chairman of Autodesk Inc. and a Cisco board member. "When your customers are the chief information officers for the world's largest businesses on down to consumers in their homes, it's a challenge to communicate a single message to a broad group."

Ms. Bostrom acknowledges that crafting the right message and getting that message out will be demanding. "I think about this a lot," she says. Still, she adds, "we've done a significant amount of research on our customers and realized there are some common messages for the various classes of customers."

Ms. Bostrom, who is 46 years old, brings years of technology and marketing experience to her job. She majored in marketing at the University of Illinois in Champaign-Urbana before joining AT&T Corp. in 1982 as an account executive. She later attended Stanford's Graduate School of Business and worked at consultancy McKinsey & Co.

After joining Cisco nearly nine years ago, Ms. Bostrom worked in the company's Internet consulting group, traveling the globe to consult with businesses on how the Internet could improve their efficiency and their bottom line. She also lobbied on behalf of Cisco's government-affairs operation. At Cisco, her consulting background was considered unusual; most other senior level executives at the company have either sales or engineering backgrounds.

Ms. Bostrom, a mother of three, has since become just one of a handful of women to crack the executive suite at Cisco, making her one of the top women executives in Silicon Valley. She was also instrumental in the creation of an effort to improve the ranks of women at Cisco.

She is known for her hands-on approach and attention to detail. A year ago, she enlisted six actors and set up a stage to demonstrate Cisco's health-care software and technology at Northwestern Memorial Hospital in Chicago. She rehearsed for a day, with the actors playing nurses, doctors and patients in scenarios involving the technology. Her presence and the presentation's detail impressed the hospital's senior executives, says Timothy Zoph, chief information officer for the hospital. He says he is now using some Cisco technology in a new women's health center that is under construction.

To craft Cisco's new marketing drive, which she began putting together in February, Ms. Bostrom focused her attention on internal talks to understand the Cisco brand and collaborated with senior level executives. As part of the effort, the company conducted brand-awareness tests with focus groups. Ms. Bostrom also worked with advertising firm Ogilvy & Mather, a unit of WPP Group PLC, which is a longtime Cisco partner.

While the company won't disclose how much the campaign will cost, Ms. Bostrom says the push will be the biggest ever in terms of reach. For the first time, Cisco plans to conduct interactive campaigns in digital communities like News Corp.'s MySpace.com and YouTube Inc.

On Cisco's own Web site, customers will be able to buy equipment, create technology partnerships and interact with other customers -- things it didn't allow before.

Internally, some Cisco executives have given Ms. Bostrom high marks for her efforts thus far. Rob Lloyd, who oversees Cisco's North American operations, says his eyes widened during the August global sales presentation where Ms. Bostrom presented her message. Many of the 15,000 employees in attendance cheered her on, he adds. "She's now reached rock-star status at Cisco," Mr. Lloyd says.

First published on September 6, 2006 at 12:00 am