Russian distributors will lose more than $ 100 million due to the new Cisco scheme in Russia

    Cisco Systems Corporation plans to independently deliver its products to Russia. Its subsidiary, Cisco Solutions LLC, will carry out customs clearance of equipment and sell it for rubles. Four distributors are currently importing Cisco products - OCS , Marvel Distribution , CompTek (part of Lanit) and RRC . They sell equipment to system integrators, the number of which in Russia is more than 2 thousand, of which 22 companies have the status of gold partners.

    In September, Cisco invited Russian customers to begin testing a new workflow in November 2015, one of the integrators told Kommersant. Until February 2016, the transition to a new work scheme will be completed, and customers will be able to purchase equipment directly from Sisco Solutions LLC. And the company will stop working with distributors.

    In the fourth quarter of fiscal 2015, Cisco's dollar revenue in Russia fell 38%, Cisco CEO John Chambers said on August 12. However, in rubles, Cisco's financial performance in Russia grew. According to, in 2014 the revenue of Cisco Systems LLC reached 5 billion rubles with a net profit of 404 million rubles. This is 7.4% and 1.68% higher than the corresponding figures for 2013.

    Low rates in the United States are associated with the macroeconomic situation, as well as with US sanctions against Russia, Mr. Chambers explained. According to one of Cisco distributors, after the introduction of the sanctions regime, the corporation began to demand that customers comply with it: “According to Cisco's rules, for each order, the final buyer must sign a form guaranteeing that he will have the equipment and not go to the FSB or on the shelf. Such paper must be signed by the first person of the buyer company. ”

    Transferring customs clearance from distributors to Cisco itself will increase the transparency of the process, said Hiroaki Tezuka, general director of Toshiba Rus LLC. According to him, the transition to direct deliveries to the Russian Federation will help increase sales profitability, and will also enable Cisco to work more closely with customers. “This is a positive signal for the entire market,” said Tezuka.

    But due to the termination of cooperation, Cisco distributors will suffer serious losses. “Together, distributors received $ 300- $ 400 million on the sale of Cisco, at least a third of this amount will be redistributed to Cisco, ” Kommersant ’s interlocutor estimates . The next step of the corporation may be self-service of the largest customers, among which the mobile operators of the "Big Three", the Central Bank ,Sberbank , Gazprom , he said. “The integrators are already preparing for this and are beginning to carry out Cisco substitution,” says one of the partners of the corporation. “We will offer customers alternative manufacturers, such as Huawei or Juniper .”

    According to Boris Bobrovnikov, general director of CROC, Cisco’s transition to direct deliveries will allow the vendor to influence market prices, but this will entail transportation obligations for the corporation, which will require additional investments. “At the same time, the vendor will still work with the customer through partners, thus, these changes will not be able to affect the CROC business ,” he said.

    For the Lanit holding, recently lostcontract with IBM , Cisco's intentions were another blow. The CompTek distributor included in it may lose some of the business, admits Lanita president George Gens.

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