Come November, Cisco will raise the price of some older Catalyst switch models by as much as two-thirds to motivate customers to buy newer technologies, according to published reports.
Network World says it has Cisco documents that show the company plans to raise the price of select Catalyst 3000, 4000 and 6000 switches, as well as associated accessories and complementary products, by as much as 67 percent.
While the price increase could prove painful for some, Cisco wants end users to instead buy products such as the Catalyst 6500 Supervisor 2T and the Catalyst 4500 Supervisor 8E – newer models that have greater capabilities.
Increasing prices to motivate buyer behavioral changes is different than the end-of-life strategy plied by other vendors. For instance, Microsoft announced more than a year ago that it would discontinue sales and support for Windows XP in April 2014. The event will force users to upgrade to a newer version, such as Windows 7 or Windows 8.1.
Solution providers and some vendors often complain that customers will not buy managed services and cloud products because the ROI is no different than conventional on-premises equipment and software. If a company can get five years use out of a server that is paid off in three years, why would anyone pay for a hosted server that comes with endless recurring fees?
Conventional wisdom is product prices should go down as new technologies supersede their value. The Cisco model may show other vendors and solution providers that raising prices in certain instances will produce a more beneficial result.