The Smartest $300,000 Cisco Systems Ever Spent

Sure, Cisco spends billions of dollars acquiring companies and billions more on research and development. But for a scant $312,400, Cisco may have found a way to drive enterprise demand for new switches, routers, storage, servers and collaboration software. Indeed, that $312,400 investment is driving viral buzz across the Web — and will ultimately push more folks to Internet video. Here’s the scoop.

During Cisco Partner Summit in Boston, Cisco offered 1500 partners and 62 press/analysts a free Flip video camera. The suggested retail price is about $200 (quick math: $200 X1562 users = $312,400). Sure, Cisco gave itself a volume discount (wink, wink). And not everyone has accepted the video camera. Heck, The VAR Guy still needs to pick up his.

But here’s the bigger story: Hundreds — perhaps more than 1,000 — of partners are now walking around this conference, shooting video, and posting videos (most bad, some good) to YouTube and Cisco’s private social network for the conference (called The Vibe).

What’s next? The VAR Guy predicts:

• And They Told Two Friends: The Flip video camera, which Cisco acquired a few weeks ago, is like that old shampoo commercial: “And they told two friends, and they told two friends.” Anybody who tries the Flip wants one. Imagine how buzz about the Flip is going to spread once conference attendees return home and show the Flip to family, friends and non-geeks who want IT simplicity.
• The Front End/Back End Connection: Cisco says it acquired Flip not for the device, but for the ease in which users can publish video to the Web. Brilliant. All that new video is going to drive network, storage and server upgrades.
• The New Shuffle: In recent years, Apple iPods ranked among the most popular handout at technology conferences. But The Flip is going to give the iPod a run for its money as a vendor giveaway — especially as the holiday season approaches.

For $312,400 (before volume discounts… … …), Cisco has put the Flip into some very valuable hands: The company’s most loyal channel partners. Smart move. And yes, The VAR Guy saw it coming.

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