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Posts Tagged ‘Cisco’

This week, Cisco Live! kicks off in San Francisco. Live! is Cisco’s annual global user conference and it’s the place to be for anyone who wants to learn more about Cisco, or just networking trends in general. Formerly known as Networkers, the show has steadily increased in size as Cisco has grown from a small network pure-play to a massive vendor that now deals in many adjacent markets, such as servers, collaboration, cloud, security and mobility.

Recently though, Cisco’s business model and CEO have come under attack as the threat of SDNs loom large on the horizon. It seems not a week goes by that I don’t hear the chatter of how SDNs will commoditize the traditional network since the perception is that the world is embracing pure software solutions on commodity infrastructure.

My opinion is that this fear is highly over-rated. In fact, the commoditization of the network is something that’s been rumored and discussed for the past 20 years, but it’s never happened. My thesis is that most of the struggles that Cisco has faced over the past few years have been more product transition and global macro-oriented than anything, and this past quarter seems to have supported that.

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Well, it’s that time of year again. The snow is finally off the ground in most of the New England area, opening day of Major League Baseball has come around, but most importantly, it’s Interop time in Las Vegas. This year’s Interop is about a month earlier than Interop of years past, but the activity from the show seems just as high. One of the more interesting announcements I saw from the first couple of days is Gigamon’s Multi Purpose Visibility Fabric Node.

Gigamon, the market leader in traffic visibility, announced the upcoming release of the GigaVUE-HC2 modular fabric node for the Services Layer of the company’s Visibility Fabric. The modularity of the product makes pervasive visibility easier to achieve. Today, visibility requires a number of different components, such as TAPs, packet modification, high-density ports, and intelligent packet modification.

Gigamon’s new GigaVUE-HC2 solves this problem with a modular product that can make it easier to deploy a visibility fabric in a highly complex network environment. The product is a compact 2RU, rack-mountable appliance, so it can be deployed in even the densest environments.

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Why do customers pay a premium for Cisco? My research shows that Cisco owns about 75% of switching share but only about 55% of port share, showing Cisco’s obvious revenue per port advantage over everyone else. Why does this discrepancy exist? I know some of you will disagree with this, but in general, customers pay up for Cisco infrastructure because it does more stuff faster than competitive products.

One good example of this is the evolution of power over Ethernet (PoE). Years before the PoE standards were ratified, Cisco rolled out its own version of PoE that gave customers PoE capabilities, while the rest of the industry was arguing in the standards bodies. Cisco got a huge, early-mover advantage by having a solution two years ahead of the field. Then, when the standard was ratified, Cisco supported it.

Cisco has maintained this advantage as remains the only vendor with 60W POE today. There are many, many examples of this. EIGRP is a faster, better protocol than RIP; for years Skinny had more features than SIP; EtherChannel was great for port aggregation, and the list goes on. Some vendors scream “vendor lock in” and “proprietary,” but the fact is that Cisco supports all the standards. But customers prefer the Cisco version since it does more.

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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.

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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.

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The network industry has largely been focused on network transformation over the past few years. Most of the vendors, though, have been geared towards the evolution of the data center network. It’s time that businesses started looking at evolving the wide area network (WAN) as this is often where the biggest pain points is for application performance.

The WAN fundamentally hasn’t changed at all in the past 30 years, as most companies still use the traditional “hub and spoke” design with a private network technology, such as MPLS. Often the WAN has a backup connection that becomes active when the primary fails. This model has worked well for decades now, so living by the “if it ain’t broke, don’t fix it” credo has meant that most companies just leave well enough alone and haven’t done anything to evolve the WAN.

I think it’s fair to say that most network managers understand why this architecture is inefficient. It was really designed for client/server traffic, and all Internet traffic is backhauled through a central location. Also, much of the traffic “trombones” up and down the WAN links through a central hub, moving from branch to branch or even Internet to branch. This is one of the reasons we’ve been talking about WAN re-design for years now. In my opinion, though, I think it’s time to take this seriously.

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