Company responds to blog reports showing discounts of 76% on Nexus switches for university.
The steep discounts that Purdue University recently received on Cisco's Nexus 7000 switches are 'unusual' and based on factors that go beyond the purchase alone, Cisco says.
Cisco this week responded to blog reports that it offered Purdue an exclusive deal that includes a 76% discount off Nexus 7000 switches. Purdue is shopping for switches for its Hansen Cluster project, which is a "community cluster" for Purdue faculty and staff looking to cost-effectively acquire computational resources.
There's also the "bake-off" process in which a customer evaluates proposals and staged implementations from bidding vendors. In winning those evaluations, Cisco is rarely the lowest-priced solution, company officials say.
Other factors, such as vendor stability, service and support capabilities and product road map, also come into play, they say. Another is the total cost of ownership over the long-term implementation of the proposed solution, a variable that determines the "value leader" vs. the "price leader," Cisco says.
"We continue to win the majority of deals by not being the price leader," Velaga says.
Nonetheless, Cisco's preparing for customers to demand Purdue-sized discounts now that the Hansen Cluster deal's been made public.
"I wouldn't be surprised if people reached out at a sales level" to request such deep discounting, Velaga says. "They do anyway."
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