Posts Tagged ‘Interop’

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.

It’s been an interesting past few months for Cisco’s CEO John Chambers. The company’s stock has had a nice run over the past year, rising from $17 to $27, but recently has fallen to a little over $23. The company has continued to drive well above industry average margins, making Cisco one of the most profitable tech companies out there. But Cisco recently announced it was laying off about 4000 workers. One could say that he’s a lot like Katy Perry in the way they dance (remember “Cisco Inferno” to kick off Cisco Live a few years ago?) and that “he’s hot and he’s cold, he’s up and he’s down.”

Cisco has been criticized for being late to articulate its vision of the evolution of the data center, but yesterday, the first full day of Interop, Chambers had another up moment. After a six-year hiatus, the CEO of the world’s largest networking company finally made a return to the main stage at Interop.

In theory, software defined networks (SDN) are this generation’s next “big thing” in networking. The promise of SDNs is to decouple the tight linkage between the physical infrastructure and the software running the network. This can help cloud providers manage their networks better, allow for true multi-tenant networking and aid in the movement of virtual machines. It’s so hot right now that almost every mainstream network vendor has an SDN strategy, as has given rise to many startups.

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