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AI World Conference & Expo · Boston, MA · December 11-13, 2017

Posts Tagged ‘Cisco CEO John Chambers’

Cisco held its annual user conference, Cisco Live, last week under the cool but sunny skies of San Francisco. This Live was the 25th Cisco user event (formerly know as Networks) and the largest to date with an estimated 25,000 in attendance and hundreds of thousands attending over the web. Before I was an analyst, I attended Networkers as a way of sharing experiences with other network professionals, as well as learning about what’s new in the world of Cisco and how it might benefit my company as well as my own career. As an analyst, I look at the company through a different lens, but the interaction with the audience was just as or more valuable when I was an IT professional.

As is the case with all large tech vendors, there’s no single point to take away from an event like this, but rather a number highlights based on what you’re looking for. To me, here were my key takeaways.

By far, the biggest news last week from Cisco’s channel event, Partner Summit, was the Intercloud announcement, where the company outlined its vision for a world of interconnected, federated clouds.

Part of the overall cloud strategy for Cisco involves building its own cloud services that could be bought by businesses directly and potentially compete with its channel. That caused some to wonder if Cisco will stick it to its resellers and take the business direct, effectively cutting its channel partners out of the loop. It seems like every year that I hear rumors that Cisco would become more aggressive with its channel partners, but this year it seemed the noise was louder than ever. In fact, I had a conversation with another analyst, whom I’ll leave unnamed, who was convinced that Cisco had been building a secret group inside the company that would enable Cisco to become its own, global systems integrator that would obviate the need for such a large partner organization. Think of it as Star Wars Attack of the Clones meets IBM Global Services.

Credit: REUTERS/Robert Galbraith
Credit: REUTERS/Robert Galbraith

For a couple of years now, Cisco CEO John Chambers has been proclaiming that Cisco will be the world’s No. 1 IT vendor. This proclamation has been met with mixed reactions as the IT community has many large, incumbent vendors already. Over the years, though, Cisco has proven to be the master of market transitions by moving into markets with large incumbents and quickly grabbing a leadership position. Voice and servers are two examples where many thought Cisco had no shot, and now the company stands as the dominant provider in both.

All eyes were on Cisco last Friday, December 7th as the company held its annual Financial Analyst conference in New York. Cisco, the undisputed 800-pound gorilla in networking, has been rapidly transforming itself into a broader IT company. At the event, CEO John Chambers made the bold claim that the company’s goal is to not just be an IT company, but indeed the No. 1 IT Company. Chambers did clarify that this would be accomplished by improving overall value as an IT partner versus total revenue. Chambers also re-affirmed to investors that the long-term growth target remains 5%-7% and that gross margins would remain constant during that timeframe. So summarizing the “Cisco plan” – No. 1 IT company, long-term growth of 5%-7% off the already massive $46B or so in revenue, and steady margins – makes it a pretty bold statement to throw out there.

I do, however, think Cisco has a good shot at reaching these goals, for the following reasons:

Yesterday, Silicon Valley’s biggest shopaholic, Cisco, added to its wireless portfolio when it announced the acquisition of a small company that develops Wi-Fi analytic technologies called ThinkSmart Technologies. ThinkSmart is a Cork, Ireland, based technology company that uses the information it gains from Wi-Fi networks to collect intelligent information such as time of day, traffic patterns and dwell times for mobile users.

There were no financial terms announced, so it’s a safe bet this was a relatively small acquisition primarily meant to add the technology into existing Cisco products.

I like this move by Cisco for a number of reasons. One of them is that it’s based overseas, so Cisco can use part of the huge war chest of cash it has in Europe. Company CEO John Chambers has strongly stated that it would continue to invest in Cisco, but the amount of U.S. investment it does will be limited until the Obama or incoming administration (if different) grants a repatriation holiday on bringing foreign cash back into the country.

Cisco kicked off its annual user conference, Cisco Live on Tuesday, June 12th. As it has for the last 10+ years, the event kicked off with a keynote from CEO John Chambers, which is normally one of the highlights of the event. I’ve seen a lot of Chambers keynotes over the years, and there have certainly been many of them, but I felt the keynote lacked some closing punch.

The keynote started out with a bunch of BMX bikers doing stunts to fire up the crowd. It was a very cool attention grabber, and not as cheesy as the roller-skating “Cisco Inferno” of a few years ago. The actual keynote started out with Chambers talking a lot about market transitions and the importance of catching them at the right time. This isn’t a new pitch for Chambers. He’s been talking about the importance of market transitions now for several years.

But this year he took a slightly harsher line on it by saying that “market transitions wait for no one,” and that companies that didn’t catch them would basically die. I believe this has been the key driver to Cisco growth over the past two decades as they caught many transitions, such as the move from hubs to switches, bridges to router, switched voice to VoIP, and the list goes on and on. It’s an important message, particularly for Cisco’s SP customers that have historically been slow to catch transitions.



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