Network World broke a story about Cisco having product problems mainly they are shipping delays for up to six months due to delays in product changes at the hardware and software level.

This is big trouble for Cisco as they are taking on the most ambitious market take down in their company history.

Here is some of what Network World broke in this story.,

Continuing product supply constraints at Cisco has some customers waiting months for key Ethernet switches, firewalls and other network gear — and those who can’t wait are turning to competitors.

Cisco customers have to wait at least a month for switches like the Catalyst 6500 and 4900s, and also are facing delays for ASA firewalls, Nexus switches, Catalyst 3560 switches and other products and accessories. Some customers report delivery lags by as much as four to six months.

The product delay problems have been a topic of discussion among financial analysts and others for months. In some cases, customers are now opting for products from competitors because they can’t wait for Cisco to deliver.

“We’ve actually cancelled orders with Cisco for [multiple Catalyst] 4948s (90 day lead time) and replaced them with another vendors switch (<2 week lead time),” posted one network/software engineer customer on the site.

Some product delays are due to changes in the hardware of the products. Shipments of Cisco’s ASA firewall are delayed until late June because of a chipset change on all ASA products, another customer posted.

This situation led to competitor Sonicwall winning some firewall business that would have gone to Cisco, another posted. Others are opting for used gear from suppliers offering overnight shipping.

Cisco is aware of the problem, which it apparently views as a good one to have.

“As we mentioned during our last quarterly conference call, we have experienced longer lead times on several of our products,” a company spokesperson wrote in an e-mail reply to Network World. “This was the result of increased demand driven by the improvement in our overall markets. And, similar to what is happening in the entire industry we are seeing some product lead time extensions stemming from supplier constraints. We continue to build upon our strong relationships with our suppliers to proactively manage our supply chain and minimize any potential impact to our customers and partners.”

But some analysts say the situation could backfire on Cisco.

“While an unexpected surge in demand that creates supply could be seen as a good thing, I think Cisco hasn’t yet realized how the market dynamics are shifting,” says Mark Fabbi, vice president and distinguished analyst for Enterprise Communications at Gartner. “In the past their customers would be unhappy — but they would wait. Today, it is increasingly common for them to say fine — if Cisco can’t supply Juniper or HP will. I’ve dealt with a number of clients that have come to this conclusion due to supply chain delays. Cisco is no longer the only game in town and not managing their lead times more appropriately will just drive business to their competitors.”

My Angle on Cisco Here

This is just another point that Cisco has to execute on their hype of their marketing and PR machine. Their last recent announcement really rubbed people the wrong way when they promised to Change the Internet Forever. Now it appears that Cisco can’t even fulfill delivery promises – these are the important things a company has to do – ship product and collect cash.   Breaking promises on poorly executed PR is one thing but breaking promises with customers is another.  This is a big issue for Cisco.

Expect the competition to jump all of Cisco for this.  This will lead to a big opportunity for Juniper Networks, HP, and others to come in and take some business away from Cisco. Cisco needs to put some of those marketing dollars into building product verses running wild and crazy PR campaigns.

Although Cisco has $41 billion in the bank in cash, they are are changing as a company and money can’t buy you speed. Ex Cisco executive Doug Gourlay pointed this out in a post about how M&A can hurt a company. It will show up with an impact to their product plans.

How Cisco is changing is underscored by the recent acquisition to get more into video. Cisco just got the approval to close on the Tandberg acquisition which highlights the big push that Cisco is taking in this idea of a end to end Cisco network.  With these grand visions the reality is that product delays and incompatibilities across Cisco’s platform will be the norm in the short to medium term.

Trying to do a complete refresh for a company the size of Cisco is very challenging. The opportunity for folks like Juniper, Alcatel, HP, and handful of others is very good. Juniper is taking advantage of this (recently bought Ankenna Networks) and HP bought 3Com for high end switches and HP OEM’s QLogic for other datacenter switches.

At some point Cisco’s customers got to be pissed off.