Dell 3.0 Takes Center Stage at DEW

Austin, Texas:  The critical question arising from the inaugural Dell EMC World event — at least for me, an IBM, HP/E and Dell/EMC/VMware investor — is what makes Dell’s prospects any brighter than those of its two main competitors, IBM and HPE, and the trio of enterprise vendors offering more limited portfolios — Cisco, Oracle and Lenovo? IBM has seen its sales shrink for the last 17 quarters, HPE is just shrinking, and the other contenders can only offer partial solutions — predominantly networking and datacenter servers, DBMS software and appliances, and devices, respectively. From its humble roots in Michael Dell’s college dorm room, the company has scaled the PC heights, added servers, storage, software, networking, security and services and, with the completion of the EMC acquisition, is now grappling with the IT industry’s largest acquisition and largest debt load. It has also added significant resources in enterprise storage (disk, flash and software-defined), virtualization (VMware), cloud (Virtustream, Pivotal and ECS), networking (SDN/NSX), all-in-one appliances (VCE) and security (RSA). Of course there is a lot of overlap too, and while the combined companies may point out the differences, many others will be concerned about the similarities. We’ve already seen signs of tighter focus — i.e. the sales of the enterprise content division, services and software units, and the (lower-than-expected) SecureWorks IPO — and the first workforce reductions, 2,000-3,000 jobs are expected to be cut, out of 140,000. On the good (?) news front, Dell moved into top spot in server shipments for the most recent quarter, while HPE held on to top spot in revenues; shipments grew 2% year-over-year, while revenues edged 0.8% lower. Even better, EMC was named a leader in integrated systems, and the acquisition should strengthen that position, although Gartner cautions that uncertainty will plague the new Dell-EMC-VMware combination that brings ‘multiple overlapping and competing integrated system strategies under one roof.’ The results were equally ambivalent for enterprise storage, where revenue was flat while shipped capacities shot up 12.9%; EMC tied for first place with HPE ($1.6 billion each) while Dell came in third place with a revenue increase of 14%, up to $1 billion. Prior to the acquisition EMC was pushing a software-defined everything strategy, and it’s unlikely that focus will change under new ownership. The current evolution of IT is offering customers a couple of choices in pursuit of shrinking data centers, lower CAPEX and OPEX and the ability to leverage the cloud: some form of do it yourself versus an all-in-one solution, and hardware versus software lock-in (and that at the end of the day, there’s no getting away from software lock-in), Manuvir Das,...

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SDCU: Software Defined Cisco Unshackled
Oct12

SDCU: Software Defined Cisco Unshackled

Much like IBM, HP/E, Oracle and Dell, Cisco’s past — and a big slice of its current revenue pie — is based on proprietary hardware solutions that have made it an industry powerhouse for the last few decades. And much like its peers, it has seen the market move to non-proprietary and increasingly software-based solutions that cost less while providing customers with more agility and flexibility. The dilemma has been how to respond to market trends while keeping investors [including me] and analysts looking for higher sales and margins happy? IBM, which has sold off most of its hardware segments, outlasted HP to regain top spot in the IT vendor sweepstakes, but has recorded falling revenues for the last 17 consecutive quarters. HPE has been putting its enterprise house in order, but also spinning a lot of FUD about under-performing units and its future. Oracle’s hardware revenues dropped close to 20% last quarter. And Dell, which went private to get out of the quarterly anal probes also known as earnings/shareholders/analysts hell, bought EMC and while that could move it ahead of IBM, it could also cripple the company as it tries to manage the industry’s biggest merger, along with the biggest debt load. In its last quarter, reported in mid-August, Cisco had revenue growth of 2% and record non-GAAP EPS which grew 9%; for the fiscal year it had revenues of $48.7 billion, up 3%, and non-GAAP EPS grew 8%. “We had strong performance in security; data center switching, collaboration and services as well as continued success in the transition of our business model to software and subscriptions,” said CEO Chuck Robbins during the earnings call. Transition of our business model to software and subscriptions: the new Cisco intends to be very different from its proprietary hardware roots. Robbins said the product deferred revenue related to their recurring software and subscription businesses grew 33% in Q4. “Our momentum here is strong and we’ll continue to accelerate this transition.” At the same time it announced its Q4 and fiscal 2016 results, the company also announced it plans to lay off 5,500 employees [out of a total workforce of 70,000]. Margins in software services are higher than hardware because they bring recurring revenue and there are “fewer people involved on the cost side,” said Roger Kay, an analyst at Endpoint Technologies Associates. [IBM, HPE, Oracle, and Dell could be the next to shed workers, according to analysts.] In June IDC noted that Cisco’s networking stranglehold was continuing to loosen, down from 60.7% of the Ethernet switching market in 2015, and 61.8% in 2013. For the first quarter of 2016, Cisco saw...

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Cisco: Cloud Optimization A Big Problem, Bigger Opportunity
Sep21

Cisco: Cloud Optimization A Big Problem, Bigger Opportunity

A new Cisco-backed IDC study — Cloud Going Mainstream: All Are Trying, Some Are Benefiting; Few Are Maximing Value — reports that while the majority of the business world (68%, up 61% from 2015) is moving quickly to the cloud, only 3% are optimizing their cloud efforts, creating a services opportunity the networking giant wants to address. Cisco’s Business Cloud Advisor Adoption Report is intended to help organizations ‘determine their own cloud adoption level and associated business benefits relative to their industry peers—by industry, company size, and geography’; in addition, the company — and partners — is rolling out a new set of Cloud Professional Services. Based on primary market research conducted with executives responsible for IT decisions in over 6,100 organizations across 31 countries that are successfully implementing private, public and hybrid clouds in their IT environments, this is the most extensive cloud survey ever, said Fabio Gori, Senior Director and Head of Cisco Cloud Marketing (and double the size of last year’s inaugural study). He told IT Trends & Analysis that the fact that only 3% of customers in the world have strategized cloud in a strategic manner was a little surprising, but the biggest suprise was the “lack of alignment between IT and line of buisness”. While not a surprise, this IT/LOB culture clash is the biggest issue holding everything back, he said. “That misalignment is the number one reason why our clients are not being successful moving to the cloud.” That’s where BCA and Cisco’s cloud services can help customers accelerate and simplify their multicloud journey, said Cisco’s Erik Vogel, Senior Director, Advanced Services. [Multicloud was another important finding in the study: the 3% have embraced hybrid: 95% use private cloud, while 92% use public cloud.] In addition to IT/LOB misalignment, the other significant obstacles to achieving greater cloud maturity are the skills gap, and legacy siloed organizational structures, according to the survey. Another major challenge — like digitalization and analytics — is speed, added Vogel. “One of the key things client are telling us, we’re not fast enough.” So anything Cisco can do to help accelerate their journeyy to the cloud is a big benefit. “As this global cloud adoption study reveals, most organizations are still attempting to optimize their cloud strategies, but the 3 percent of organizations that have reached the highest level of adoption are reaping the most benefits,” said Robert Mahowald, Group VP, SaaS & Cloud SW, IDC, in a prepared statement. “It also underscores that multicloud environments are the default scenario among a majority of companies worldwide, and successfully managing multicloud is a key attribute of mature cloud strategies.” Much...

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Dell Joins Cisco in Hyping DT Security
Jul27

Dell Joins Cisco in Hyping DT Security

Right after Cisco’s call for a threat-centric approach to securing the digital transformation (DT), Dell has released a survey finding that while everybody (97%; the other 3% were recovering from ‘Luddite Life’ celebrations) is investing in digital technologies, 85% say security teams can better enable DT initiatives if they are included early in the project, and 96% say ‘securing digital technologies poses challenges including lack of resources, risk of a security breach, finding the right balance between security and employee productivity, and loss of control.’ Dell’s survey of 631 US, European and Australian IT decision-makers with responsibility for security found an interesting disconnect: while 89% of respondents recognize digital transformation is happening in their industry, only 50% believe it’s happening in their organization. Yet 72% express active projects in mobile, with 68% involved in cloud projects and 37% in IoT, the usual suspects in formal digital transformation projects. This disconnect is because DT is not like other transformation initiatives, said Jackson Shaw, Senior Director, Product Management, Dell Security. Digital transformation tends to be a top-down strategic initiative, that starts initially at the board or C-level, he told IT Trends & Analysis. “DT as a process originates really high in the organization and the line of business really sees it as their slice of heavenly pie,” agreed Bill Evans, Senior Director, Identity and Access Management, Dell Security. One of the challenges that we see, where it happens organically from the bottom, that’s where security gets left out, he added. Strategic or not, DT can be derailed by security, said Shaw. While security often is seen as a barrier to digital transformation and brought into the process too late to make a meaningful impact, security teams can serve as enablers in helping the business adopt digital technologies when included early in the planning process, according to Dell. Security is at the heart of digital transformation, agreed Cisco’s Ben Munroe, Senior Manager, Product Marketing. Of necessity — and having absolutely nothing to do with the company’s core business — he maintained that “Security must start with the network.” A key reason why security is too often looking in at DT from the outside has to do with the traditional view of security as the Department of No, said Evans. “We see security as enabler… it has to step up and become an enabler, the Department of Yes.” “Digital transformation is bigger than just IT and security,” said Shaw. “It’s used by organizations to transform themselves, to become more customer centric.” DT can pay huge dividends, according to a survey commissioned by CA: 45% reported increased customer retention rates; while 44% also recognized...

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Cisco: from CLI to cloud

With DNA, Cisco is prepping for a future where network devices can be managed from the cloud. At last week’s Cisco Live, I heard about how Cisco is working to change how network devices will be managed in the future. This will be a gradual evolution, rather than a sudden blockbuster change, but will require some adjustment for traditional networking administrators accustomed to CLI. Network admins are accustomed to configuring and devices one at a time and devices performed tasks locally. Of course, they have communicated with other peer networking devices using protocols such as BGP to exchange routing information, but the network has been fundamentally a distributed system of independent devices. Some centralization is possible with network automation tools that perform configuration settings on many devices, or more recently, SDN controllers such as Cisco APIC or OpenDaylight, which have started to create an architecture that coordinates a large part of the network. To read the complete article, CLICK...

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