Cisco leader John Chambers has warned partners that the unprecedented pace of change at the vendor will make them "uncomfortable", and that one in three of them will no longer exist in as little as 10 years.
At the networking giant's annual channel shindig in Las Vegas this week, its boss was in typically loquacious mood as he also opened up on the fallout of the NSA revelations and why IT vendors have been "struggling" for several years.
During the conference's opening keynote (pictured), Chambers began by telling assembled VARs that "if you agree with everything I say, I will fail". He went on to ask more than 2,000 attendees "how many of you like change?", to which much of the room responded in the affirmative.
"Now, how many of you have changed your spouse in the last year?," he quipped, to illustrate his point that, even if you claim to embrace it, "change will make you uncomfortable".
"But we have to change more in one year than we have in the last three," he continued. "A third of the companies in this room will not exist in a meaningful way in 10 to 20 years; 87 per cent of our customers will face severe revenue challenges in the coming years, and only 11 per cent will recover."
The Cisco main man outlined that only two or three of the IT landscape's current top six companies will still be tier-one players in five years' time. He stressed that his firm "has to get the inflection points right" if it is to be among the limited number of firms that prosper. He predicted that, in time, this year will be looked back on as the time when the Internet of Things really began to gather momentum.
"The IT industry has been struggling for the last 10 quarters; how many times have [we seen] companies at less than two per cent growth? This is an industry that is in transition - it is a battle," he said. The pace of change is exponential compared to what any of us have seen before. Looking back five years from now, 2013/4 will be seen as the inflection point [for the Internet of Things]. It will require us to make changes that will make you uncomfortable. And, candidly, it will make us uncomfortable."
Looking after number one
In a lively question-and-answer session following his speech, CRN got the chance to ask Chambers how he would measure Cisco against his oft-stated goal of being the globe's leading IT player. He explained that the key lies in value, rather than size.
"We are not measuring it [financially], but if we get it right, the margins will be very good as well," he said. "When you ask customers who is their number-one IT provider, they won't tell you who they buy the most from, they will tell you who provides the most value."
Following the publication of its first-quarter numbers for FY14 in November, Chambers revealed that the vendor's sales had been hurt - particularly in China - from the effects on customer sentiment caused by the NSA scandal.
But he told CRN that "we never received a government order to provide any information", and predicted that Cisco will manage the balancing act of addressing the needs of governments and customers in the coming years.
"The only way you're going to be a leader in networking... is, if you find any issues in the datacentre or anywhere else, you share it with the customer, whether they are in Europe, Canada, or anywhere else. We will take [on board] he legitimate needs of government. We will take this challenge, which requires that we have tremendous trust, and credibility in our infrastructure."
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