Cisco supply chain woes hit VoIP projects, too

IP telephony pros have viewed all the drama surrounding the notorious backorders that have plagued some of Cisco Systems' core networking products this year as someone else's problem. But there are signs that the Cisco supply chain woes may soon start hitting VoIP projects.

There are signs that ongoing Cisco supply chain problems could start delaying VoIP projects. The long backorders

that have plagued Cisco's core networking products are extending to equipment that is critical to VoIP projects, such as IP phones and integrated services routers.

The problems in the Cisco supply chain have mostly affected the availability of network switches and firewalls, but vendors of used Cisco gear say enterprises are coming to them looking for key equipment to complete voice over IP (VoIP) projects. And some VoIP project leaders say they are worried that Cisco supply chain delays could derail their VoIP projects.

Susan Parsons, network manager for East Bay Regional Park District in Oakland, Calif., said she recently "got this 'You're not going to want to hear this' call" from her value-added reseller (VAR).

We have a completely Cisco backbone, our phone system is Cisco -- everything is Cisco. We're pretty much held hostage by the parts …. We need to have a consistent phone and data network.
Susan Parsons
Network ManagerEast Bay Regional
Park District

Parsons is in the final phase of her three-year-long VoIP project, which would install new Cisco IP telephony infrastructure in 45 of the district's 60 sites. She needed 22 more Cisco 1861 integrated services routers (ISRs) to deliver VoIP services to some of her smallest branch offices. Her VAR told her that the ISRs she had ordered in February wouldn't ship until October.

"That's nine months -- you could give birth in that time," Parsons fumed. "We have a completely Cisco backbone, our phone system is Cisco -- everything is Cisco. We're pretty much held hostage by the parts …. We need to have a consistent phone and data network."

Because the 22 remaining sites that need the eight-port ISRs are small offices -- often supporting about a half-dozen users -- with no wiring closets or specialized cooling systems, other Cisco products would be too large, impractical and expensive, Parsons said. She has not found any other vendor offering a similar "phone system in a box" for the small office that doesn't require purchasing additional modules for all the features she wants.

"We do funding year-to-year -- from January to January, unlike other government entities that do July to July -- and a lot of times at half-year, if you don't spend the money, [city officials] say, 'We'll take it and use it somewhere else,'" Parsons said. "I'm just sitting here … and freaking out."

Cisco supply chain woes hit other elements of VoIP projects

The loudest outcries over backups in the Cisco supply chain -- believed to be caused by components manufacturers closing factories when the recession hit -- have concerned the Catalyst 2900 switch and Adaptive Security Appliance (ASA) firewalls.

But enterprises are also struggling to get their hands on Cisco's more affordable IP phones and other equipment critical to VoIP projects, according to Mike Sheldon, president and CEO of Network Hardware Resale (NHR), a reseller of refurbished Cisco gear.

"We're seeing long delays on the newest IP phones, call managers and associated switching products," Sheldon said. "All those things are heavily backordered."

A Cisco spokesman referred questions to statements by CEO John Chambers and CFO Frank Calderoni in the company's fiscal 2010 third-quarter earnings call, acknowledging the delays and saying they expected shipping times to normalize in the next fiscal quarter. The spokesman declined to specify whether these problems included VoIP equipment.

Cisco's CP-7900 phones, including the 7962G and 7942G, are seeing 30- to 120-day backorders, Sheldon said. He said customers have come to his company looking for used 7960G and 7940G phones, which are the previous generation of the CP-7900 series.

Cisco supply chain problems are also affecting the availability of the WS-X6148A-GE-45AF blades for Catalyst 6500 switches, according to Sheldon. These modules provide Gigabit Power over Ethernet (PoE) to Cisco's newer and popular high-end model of IP phones, the CP-7965G, which offers full-color display. Cisco quoted 120-day backorders on them as of last week, he said.

I haven't [heard about VoIP product delays], but it doesn't surprise me anymore.
Zeus Kerravala
Distinguished Research FellowYankee Group

"It's the only PoE blade for that chassis," Sheldon said. "If you wanted to install phones in your network using a 6500 switch, that's what you'd order."

Although Cisco's worst backorders have eased up over the past month, they remain unpredictable, he said. A long lead time could easily become longer after the order is placed, wreaking havoc on VoIP projects.

"Two and a half months into that three-month lead time, you're all geared up -- you've got your weekend install plans, your scheduled outages, and [Cisco tells] you, 'Sorry, it's going to be three more months,'" Sheldon said.

Magnitude of Cisco supply chain's impact on VoIP projects unclear

Despite these signs of delay, it remains unclear whether Cisco supply chain woes are causing widespread problems for VoIP projects. Some VARs struggling to obtain networking gear have had no problems filling orders for VoIP or other unified communications equipment.

Chris Church, technical services manager for a Cisco VAR in the Midwest, spent this past spring waiting for Cisco to fulfill his orders for ASAs and Catalyst 2900s so that he could deliver them to anxious customers. He hasn't seen anything out of the ordinary for UC or VoIP equipment.

"We haven't really been experiencing anything as far as long lead times on those products," Church said. "A year ago, it was pretty much normal to take seven to 10 days to receive that stuff, and it's generally been the same experience."

Vicki Nosbisch, president of Horizon Datacom, a secondary market reseller based in Columbus, Ohio, also said she has seen Cisco supply chain problems only with networking gear.

"We have so many different channels that we purchase equipment through, and we haven't seen any shortage on the VoIP side," Nosbisch said. "Really, the only shortages we have seen are with the ASAs."

Even if not as well-publicized, Cisco's supply chain problems are likely to affect VoIP projects because the Cisco supply chain uses similar components in both networking and VoIP equipment, according to Zeus Kerravala, distinguished research fellow at Yankee Group.

"I haven't [heard about VoIP product delays], but it doesn't surprise me anymore," Kerravala said. "The silicon manufacturers just can't spin products up overnight. It takes a while for production of this stuff … and now that Cisco wants the products, it's not like they can flip the switch."

Let us know what you think about the story; email: Jessica Scarpati, News Writer

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