Vyatta Patterns Discount on Cisco’s 64% Gross Margin

We have to admit this is pretty creative marketing from a small company that has an uphill fight in the same space as huge Cisco Systems. Actually, it’s creative for any company, for that matter.

Belmont, Calif.-based Vyatta, an open-source-based networking startup whose Community Edition 3.0 software was a finalist last year in eWEEK’s Excellence Awards competition, has a new deal available: For a brief time, it’s offering to sell its subscription services for a percentage that matches Cisco’s gross margin, as revealed in its latest quarterly earnings report.

Vyatta marketing guru Dave Roberts has decided that Cisco customers are way overpaying for their networking hardware and software and services, and that he’s not going to take this lying down.

On May 6, Cisco reported a dip of 24 percent in its sales, but it still showed a 64 percent gross profit margin in its quarterly report.

“That’s a very high gross margin,” Roberts told eWEEK. “If you’re a Cisco investor, you love that kind of gross margin, for sure. If you’re a Cisco customer, however, you really don’t love it; this means that 64 cents of every dollar you spend with Cisco is simply gross profit. And it is gross, all right.”

So Roberts has decided to fight fire with fire.

“We have announced the ‘Gross Profit—Sweet Savings’ promotion,” he said. “All week, we’ll be accepting registrations for the promotion. When you register on our site, we’ll send out a special discount code via e-mail, good through Friday evening [May 8, Pacific time].

“Cisco announced a 64 gross margin; our customers will pay 64 percent of list price for a Vyatta subscription [a 36 percent discount]. All the terms and limitations are spelled out on the registration page.” Here’s the link.

If you happen to be in the market for some competitive networking gear, check out Vyatta and take advantage of this “window of time” sale. And good luck!