Massa thinks big as director of Cisco's federal unit
- By Colleen O'Hara
- Sep 21, 1997
When Cisco Systems Inc. chief executive officer John Chambers recently asked Jim Massa director of Cisco's federal operations what his plans were for the group Massa replied "I want to be $1 billion in size before Cisco is $10 billion in size." Unmoved Chambers responded "Well that's all well and fine but I can buy companies and you can't."
Cisco Systems is currently a $6.4 billion company and it expects to make 12 acquisitions or minority investments over the next year. Massa meanwhile has ambitious goals for Cisco's federal group just one year after taking up his current post.
"My goal is to keep Cisco's federal business between 6 and 10 percent of Cisco's worldwide business " he said. That business stems from Cisco's popular router products but half of the company's revenue comes from other lines of business including switches and Asynchronous Transfer Mode network interface cards.Massa's other objectives are focused on his federal customers. "I want to increase the customer satisfaction rate which is already 4.12 on a 5-point scale " he said. "The other goal is to understand the customer mission. Whether it's the civilian side or Defense side agencies have a mission they want to accomplish."
Riding on the success of the quickly growing networking market the company's federal group has experienced its own success as well. Cisco's federal operation has been growing 60 to 100 percent over the past two years and although agencies' information technology budgets are not growing very fast the demand for networking products and services is still there Massa said. "The market will grow 30 to 40 percent and we anticipate growing 10 to 15 percent faster than the market " he said.
To help fuel this growth Cisco will continue to rely on its channel partners to sell to the government - something it does almost exclusively now. "There is so much demand that we could not put the resources in place [ourselves] to address it " Massa said. "We provide the product product support and consulting and look to the partners to provide the rest."
Today Cisco has more than 100 contract vehicles in place and has beefed up the number of General Services Administration schedule holders that sell Cisco products. Two years ago the company had two GSA schedule holders today it has eight in place or under negotiation. Cisco aims to ally with nontraditional partners to provide new offerings such as services leasing and maintenance. One such nontraditional reseller is Bell Atlantic Corp. with which Cisco has a reseller pact in the works.
But while new procurement laws have made it easier to buy and sell products off the GSA schedule this new environment does not necessarily mean contracting is less complex Massa said. "We expected contracting officers to be slow to adapt but they have turned out to be lions to make sure they get the best discount " he said. "It becomes very competitive and in some ways it has slowed down business."
One way the company plans to help its partners compete is through the use of electronic commerce to place and track orders. Currently about 70 percent of the company's business with partners is done through EC a statistic that will increase to 100 percent over the next year. In addition more and more agencies are using EC to place orders as well. "Cisco Federal will lead all entities in the percentage of business we do with EC " Massa said.