Cisco’s CEO Predicts 40% of Companies Will Die

 JULY 8, 2015

Posted in: NEWS

In a recent address to Cisco customers, CEO John Chambers predicted that more than two-thirds of companies currently in existence will not remain viable within the next 10 years.

Jonathan Berr, in his “CBS Money­Watch” article, stated, “According to Chambers, who’ll step down this summer after serving 20 years as CEO, companies face a stark choice of either changing with the times or have change foisted on them that they may not like. Firms need to focus on operational rigor, simplicity and developing the right culture.”

This statement also succinctly sums up the state of business in the federal contracting market. In 2000, the federal contracting spending was at $220 billion. The aggressive spending pattern started and finally topped out at $550 billion in 2010, with a steady decline to $462 billion in 2014.

That being said, the federal market remains as the world’s largest customer — buying more services and products than any other entity in the world.

The last few years have been game-changers for contractors of all sizes, from the large corporations like Lockheed Martin and Northrop Grumman to the small five- and 10-person businesses serving both the Department of Defense and civilian agencies.

While the acquisition strategy of lowest-price-technically-acceptable (LPTA) has been a strong deterrent for vendors at some agencies, the overall tighter budgets and “do more with less” mentality has forced the changes in every program, including cyber, health, defense and intelligence.

This affects every stage of federal contracting, from updating a market strategy, through business development, capture and the Request for Proposal response process.

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