The price of becoming an Expert just went up a little. Effective August 1, 2011, the price of the CCIE lab is being increased by $100US across the board to be $1500. The email that candidates received this morning:
As of August 1, 2011, the price of the CCIE Lab will change from $1400 to $1500 USD*. Your lab fee will be processed 90 days before your scheduled lab date. Since payment for your lab will be processed after this date, you will incur the new price. While you can cancel your lab date without cost, we hope you will continue on with your certification exam to certify that you are one of the most expert networking professionals in the world.
As an administrative change, the timing on this is just about right. The Cisco fiscal year begins on August 1 every year, so we are now officially in FY12. Revenue increases usually get recognized in a new accounting period for reasons that I’ve managed to forget since my last accounting class in college. Suffice to say that tying the lab price increase to the beginning of the fiscal year isn’t all that unheard of.
Why increase the price at all? What am I getting for an extra 7%? All valid questions. Allow me to speculate:
1. A Weak Dollar. It’s no secret that the US dollar isn’t doing so well against other foreign currencies, like the Euro. I’m not a Harvard Economist, so I’m not going to delve into areas that I know nothing about. However, the price difference between the two currencies could lead Cisco to believe that the customers paying for the lab in denominations other than the US Dollar aren’t getting a fair shake. Or, it could mean that other candidates are looking at the US labs as a bargain compared to Brussels and Dubai. That would mean they could start booking labs here as opposed to there and start overloading the seating available here for US students. It’s happened before, so I wouldn’t be that surprised to see it again if the candidates believed the price difference was that great. By raising the lab to $1500, Cisco is essentially resetting the level so that everyone is fair again.
2. Layoffs. Yes, I know that within the next two weeks, Cisco is looking at about 6,500 layoffs from all over the company. This includes 2,100 people who opted for an “early retirement” package in lieu of a furlough. Why would this have an impact on the CCIE lab? Because I have it on good authority that once of those 2,100 retirees was a CCIE proctor. Typically, most labs run two proctors. One shows up early to get the lab up and running for the day and run the candidates through the morning instructions. The other proctor ends the lab and collects materials. Depending on the time differences, the first proctor may not even be around when the lab ends. Only having one proctor available for a site means a lot of overtime for that poor soul. More likely is the idea that a new proctor will need to be brought on board, so increasing the price of the lab makes sense from the perspective of training a new guy in how to be mean and paying a chunk of his/her salary in an environment where pennies are going to be pinched pretty soon.
3. Technology Refreshes. Before any candidates out there have a heart attack, notice I said “technology” and not “blueprint”. There is a lot of interesting technology coming in the future for the CCIE lab. Mark Snow hinted at some of it in his Cisco Live 2011 recap post. The plan going forward is to port all the lab workbooks to the CCIE Lab Delivery System that the R&S lab uses now. This costs money. Also, Cisco wants to start introducing more troubleshooting tasks in the actual configuration section now that the Open-Ended Questions have been removed. This isn’t cheap. In addition, Cisco is working on varying the lab tasks slightly among different versions of the exam, for instance asking a task to be configured one way on a version and the same task to have a slightly different configuration in another version. This kind of development takes time and (you guessed it) money. So, by adding another $100 to the lab price, they can effectively pay for the development of these new technologies without having to increase revenue from another source. By making sure the CCIE lab can generate enough revenue to fund its own development, you never have to worry about another business unit getting involved and deciding how things are going to be run.
The CCIE lab isn’t cheap. Not by a long shot. Between the lab costs and the flights and the hotels and the rental cars, even one trip is a fairly costly adventure. Adding another $100 onto that may not seem like a lot up front. But the psychological effect can’t be understated. The lab is now a nice round $1500 amount. For those footing the bill themselves, this is another wallet-sized portrait of Benjamin Franklin that they have to part with. In the end, all the pain and suffering is worth it, even that of your poor bank account. I think the price increase will fund some great new advances in the lab and hopefully do away with the 3-ring binders for the workbooks and usher in a new age that uses technology to full advantage. If this increase is due to currency parity, then the additional revenue that is brought in after the currency markets stabilize will be useful as well. Just don’t expect the price of the lab to go down anytime soon, if ever. Because if there’s one thing you can count on, it’s the cost of the CCIE lab always being a fistful of dollars.