Cisco cuts ties with Chinese partner ZTE, after an internal investigation indicates ZTE sold Cisco equipment in Iran despite U.S. sanctions forbidding such sales. The move coincides with a U.S. Congressional report encouraging American companies to cease doing business with Chinese telecom vendors such as ZTE and Huawei due to national security concerns. The moves ignite a war of words between Huawei and Cisco, leading to speculation of an impending trade war between Cisco and other U.S. technology companies, and China.
Cisco customer California State University accepts a $22 million bid from Alcatel-Lucent to refresh its systemwide network after Cisco's proposal overshot that by $100 million. The contract covers all 23 CSU campuses, but San Jose State decides to go with Cisco anyway, handing the company $28 million for its "Next Generation Technology Project" without a competitive bid. The situation raised questions on San Jose State's motivation and the inner workings of the deal, considering the challenging financial situation facing the State of California and that SJSU is spending more for its own network than CSU is spending to upgrade the entire university system. It also set off a manhunt within Cisco for the source of a leaked internal memo taking issue with CSU's assertion that Cisco's bid was six times that of Alcatel-Lucent's.