There's no doubt that the way technology is procured, deployed and managed is at a tipping point. The network boundary...
By submitting your email address, you agree to receive emails regarding relevant topic offers from TechTarget and its partners. You can withdraw your consent at any time. Contact TechTarget at 275 Grove Street, Newton, MA.
is blurring and that's impacting lots of people in many ways.
One of the parties that's being impacted is Cisco. For years, they've been the leading supplier of network equipment for businesses. However, they've been under significant pressure recently.
HP's acquisition of 3Com was completed last year, forming the new HP Networking organisation that has been aggressively targeting existing Cisco customers. HP's enterprise gear now includes lifetime warranties in many cases and can match Cisco feature for feature. So, Cisco's main competition has a robust product offering and is hunting the Number 1 position.
The rapid shift towards cloud-based solutions is changing the way internal networks are designed and managed. For the last 20 years, connectivity has been focussed on enterprise resources being located inside the firewall. Storage arrays, application servers and other business essentials needed connectivity. That was based on ethernet and fiber technologies. Clients accessed those tools locally, only hitting the Internet when they needed something extra.
Today's world is changing. Applications and storage arrays can be rapidly deployed outside the firewall. That means that internal connectivity is less important with the focus placed on the external pipe. Consequently, Cisco's large clients are now going to be cloud providers who aggregate services for multiple clients. That will mean two things. Cisco will likely be selling fewer devices and the functions those devices carry out will change.
Cisco knows this - over recent times, their fastest growing market segment has been telecoms. But in that market they face stiff competition from many other players. Similarly, they're under fire from a number of competitors in voice, security and even their consumer division. On the consumer side, they announced the closure of the FlipVideo business, purchased only two years ago and on the eve of releasing a new streaming video IP camera for consumers.
Clearly, Cisco understand the pressures they face. They see that consumer markets are more of a business driver than ever before. Consumers, for a long time, have had home internet connections that are at least as fast as those they enjoy at work and, in many cases, superior. If Australia's National Broadband Network is established there will be even greater pressure to build networks that have to deal with distributed clients accessing distributed applications and storage.
John Chambers, Cisco's CEO, said in a recent announcement that "As we move forward, our consumer efforts will focus on how we help our enterprise and service provider customers optimise and expand their offerings for consumers, and help ensure the network's ability to deliver on those offerings." That recognition of the changing market is important but faced with the rapid change that's taking place and the increasing competition it will take a very robust and nimble Cisco to maintain market share, much less increase it.
There was a time when it was said that no-one ever got fired for buying IBM. And for a a long time, the same could be said of network engineers and managers with regards to Cisco. But now there's viable competition for Cisco in every market they play in.