The Future’s Looking Bright(er) For Cisco

SAN DIEGO: It’s been a wild run-up to Cisco Live, June 7-11, with executive shakeups, acquisitions, product announcements and a communications forecast predicting that the future should be very bright over the next few years for networking’s powerhouse. Of course its competitors, alternative technologies, customers and a wonky economy will have their say in just how this will all play out, but as the old saying goes, so far, so good.

Named as John Chambers replacement on May 4 (to be effective July 26), incoming CEO Chuck Robbins is wasting no time putting his stamp on the organization with sweeping management changes. Last week he named the 10 members of his leadership team (with more to come): Pankaj Patel, EVP, Chief Development Officer; Kelly Kramer, EVP and Chief Financial Officer; Rebecca Jacoby, SVP, Operations; Francine Katsoudas, SVP, Chief People Officer; Hilton Romanski, SVP Chief Technology and Strategy Officer; Karen Walker, SVP, Chief Marketing Officer; Chris Dedicoat, SVP, Worldwide Sales; Joe Cozzolino, SVP, Services; Mark Chandler, SVP and General Counsel; and Dr. Ruba Borno, VP, Growth Initiatives and Chief of Staff.

“Our strategy is working, and with the leadership team I’m announcing today, I’m extremely confident we will move even faster, innovate like never before, and pull away from the competition,” said Robbins, in a prepared statement.  “This is a remarkable team, with a diverse set of experiences, expertise and backgrounds to accelerate our innovation and execution, simplify how we do business, drive operational rigor in all we do, and inspire our amazing employees to be the best that they can be.”

His former bosses, co-presidents Rob Lloyd and Gary Moore will leave the company late next month. Padmasree Warrior, Chief Technology and Strategy Officer, and Edzard Overbeek, SVP of Services, will move into strategic advisor roles, effective immediately and stay through the transition, although Warrior is rumored to be on her way out too. Wim Elfrink, EVP for Industry Solutions and Chief Globalisation Officer, will retire effective July 25.

was also quick to act in making sure departing executives did not come back to haunt them by joining their competitors. Moore and Lloyd reportedly signed separation agreements and general releases from effective July 25, which included a one-year noncompete agreement, saying they will not work for a total of 29 competitors or risk losing benefits. The list includes: AWS, Arista Networks, Dell, Ericsson, HP, Juniper Networks, Microsoft, Nokia, VMware, Check Point Software Technologies, FireEye, Fortinet, Symantec and Palo Alto Networks.

A day prior to the executive shuffle, Cisco announced it intends to acquire Piston Cloud Computing, which will ‘help accelerate the product, delivery, and operational capabilities of Cisco Intercloud Services, according to a blog from Romanski. He said that paired with the recent acquisition of Metacloud, ’s distributed systems engineering and OpenStack talent will further enhance their capabilities around automation, availability, and scale.

On May 29 it completed the acquisition of Tropo, a provider of a cloud API platform that makes it simple for customers and developers to embed real-time communications within their applications. Embrane, a provider of a lifecycle management platform for application-centric network services, was acquired on April 1.

Rumors were also circulating recently about Cisco buying Nutanix, the hyper-converged infrastructure startup. That rumor was squashed in mid-May by CEO Dheeraj Pandey, who said Dell would have “a front-row seat” if they ever decided to become part of another company.

It was a very busy few days, with the day before the Piston acquisition (June 3), Cisco announcing new 802.11ac Wave 2 solutions, including access points and controllers. Rad Sethuraman, Senior Director of Product Management Mobility Services, announced the extensions in a blog, along with additions to the Catalyst switching family:

Cisco Aironet 1850 Access Point:, an entry-level 802.11ac Wave 2 access point that offers faster client performance — enabled in part by multi user, multi-in, multi-out (MU-MIMO) — and offload to wired network with 2GbE ports;

-Cisco 8540 Services Controller, a highly scalable and service-rich platform that supports 802.11ac Wave 2 for large campus wireless deployments, offering up to 40Gbps of throughput and support for 6,000 access points and 64,000 clients;

-Cisco 5520 Services Controller supports 802.11ac Wave 2 for medium-sized to large campus wireless deployments, offering up to 20Gbps of throughput and scalability for 1500 access points and 20,000 clients;

-Cisco Catalyst 6840-X Series Switch, based on the Catalyst 6K DNA, offers smart and simple network operations, support for high-bandwidth with up to 2x 10G/40G uplinks, and is the smallest MPLS aggregator and Instant Access controller in the Catalyst family; and,

-Cisco Catalyst 3850 10G Series Switch, with 1RU fixed aggregation that features a programmable data plane, enabling the deployment of software-defined networking services, and supporting high-bandwidth with 10G downlinks and 10G/40G uplinks.

To cap it all off, Cisco released its 10th annual Visual Networking Index at the end of May, with all sorts of upbeat predictions for the next few years, including that will triple from 2014-2019. “It took 32 years – from 1984 to 2016 – to generate the first zettabyte of annually,” said Doug Webster, VP of Products and Solutions Marketing, in a prepared statement. “However, as this year’s Visual Networking Index forecasts, it will take only three additional years to reach the next zettabyte milestone when there will be more than 2 zettabytes of IP Traffic annually by 2019.”

There were all kinds of detailed forecasts, including IP will account for 80% of global IP traffic by 2019, and that more than 66% of global IP traffic will originate from mobile connections, including Wi-Fi, by 2019. Other findings included:

-More Internet Users – As fixed and mobile networks grow and expand, more people will have network and Internet access. In 2014, there were 2.8 billion Internet users, or 39% of the world’s population of 7.2 billion. By 2019, there will be about 3.9 billion Internet users, or 51% of the world’s projected population of 7.6 billion (Source: Population Division of the Dept. of Economic & Social Affairs of the United Nations).

-Proliferation of Devices and Connections – 24 billion networked devices/connections are expected to be online by 2019, compared with 14 billion in 2014; globally, there will be 3.2 networked devices/connections per capita by 2019, up from 2 per capita in 2014.

-Faster Fixed Broadband Speeds – Globally, the average fixed broadband speed will increase two-fold from 20.3 Mbps in 2014 to 42.5 Mbps in 2019.

-The Internet of Everything () and Growth – The IoE trend is tangible growth as connections will more than triple over the next five years (growing to 10.5 billion by 2019); the connected health consumer segment will represent the fastest connections growth at 8.6-fold (54% CAGR) from 2014 to 2019; the connected home segment will represent nearly half (48%) of connections by 2019; and, annual global IP traffic will grow 15-fold over this same period—from 308 petabytes in 2014 (0.5% of global IP traffic) to 4.6 exabytes by 2019 (2.7% of global IP traffic).

-North American IP traffic will grow 20% CAGR, 2.5-fold, by 2019; and,

-overall business IP traffic, which includes web, backup, VoIP, etc., will double between 2014 and 2019.

This sure looks like its shaping up to be a good time to be a networking vendor, especially for Cisco. Of course networking budgets are not growing anywhere near as fast as networking demands, so this is also shaping up like the epic battle between the immovable object vs the irresistible force. Something will have to give.

DISCLAIMER: Cisco is looking after airfare and hotel; it’s also in my stock portfolio.

 

Author: Steve Wexler

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