Where next for Cisco?

The networking giant used its recent techie get-together in London to discuss where it will place its bets in the coming years

Throughout its nigh on 30-year history, Cisco has had an enviable habit of placing its bets sagely when it comes to new technologies and new markets.

From its inception in 1984 as a router maker, its journey to become a $40bn-plus juggernaut and one of the technology world's biggest companies has been characterised by successful forays into uncharted waters. Its not-inconsiderable share of the switching, voice, video and network security markets is testament to its history of good calls.

More recently, its leap into the server market has shown much early promise. In the first quarter of last year, Cisco was the world's third-largest maker of blade servers, holding almost 10 per cent of the market.

At the Cisco Live Europe event at London's ExCeL arena earlier this month, the vendor's chief technology officer Padmasree Warrior used her keynote speech to bring attendees up to speed on where Cisco intends to invest over the coming years.

With the tech world reportedly on the cusp of a number of industry-shaping changes, and the global economy seemingly peering over the precipice of disaster, there can surely never have been a more important time for Cisco to get it right.

No longer good enough
Warrior began her speech by talking about the increasingly rapid pace of change that enterprises have to deal with, and how the network can be the lynchpin of adapting to this. Businesses will no longer settle for adequate technology, she asserted.

"In today's competitive business landscape, companies really have to focus on being agile and reinventing themselves," she said.

"In five years from today, about average will be over - customers are looking for solutions that go beyond the ‘good-enough' networks that some of our competitors offer."

Customers are not the only ones demanding more from network hardware, claimed Warrior, with connectivity services providers demanding more of the vendors upon whose kit they rely.

"It was not that long ago that we had a desktop and we had a datacentre. The role back then was to connect the application and the server and deliver it to the client," she said. "People still need to maintain business continuity, but providers are looking to the network to provide additional value-added services."

Also expecting more from their work technology are employees, said Warrior. And, being 28 years old itself, Cisco should know something about the wants and needs of the next generation of enterprise managers.

"Generation Y has very different expectations. They are now entering the workforce and they are also very quickly becoming customers," she said. "The discussion is [no longer] about outsourcing - it is about sourcing talent anywhere, so you can sell everywhere."

Mobility and stability
Unsurprisingly, mobility was a key strain of the Cisco tech chief's vision. She said analyst predictions suggest that, in eight years' time, there will be 50 billion connected devices on the planet. She also pointed to forecasts that suggest video traffic will quadruple in the next two years.

"The number one priority for CIOs is video," she added.

Cloud was also, predictably, an area of focus for Warrior. Key benefits for the enterprise of moving towards a cloud environment include "immersive collaboration", she said, which could help businesses by allowing them to "put virtual teams together".

Other benefits include reducing energy usage, as green concerns become ever-more important for IT chiefs. But security remains the watchword for anyone hoping to make money from the cloud, said Warrior. She added that ensuring cloud allows you to get the most out of technology, as well as staff, is another key consideration.

"Security is front of mind for CIOs," she said.

"We have to be cognisant of two things: making sure applications are secure; and, in addition to employee productivity, we have to deliver IT productivity."

In recent years Cisco has bet the farm on its range of business architectures. Its goal is that its wares are no longer seen as siloed technologies, but as stacks, addressing the concerns of both executives and IT managers.

Warrior explained that Cisco's Unified Access architecture is its big play in the campus switching space, while Unified Fabric is the vendor's datacentre switching offering. Its datacentre architecture, including its two-year-old server line, is the Unified Computing System.

"[Then there] is the WAN area. There are some cross-architecture issues that are needed to meet some of those requirements," said Warrior.

"We are looking at SecureX as an architecture for security."

Cisco SecureX aims to create and implement security policies throughout a firm's entire distributed network, thus ensuring a "converged security strategy across wired, wireless and VPN networks".

But it is in the datacentre that Warrior believes Cisco may have the edge on its rivals. She claimed that marrying Unified Fabric with Unified Compute was a recipe for success, suggesting that rivals lack the networking nous to keep up.

"Today we have over a billion-dollar run rate in UCS. We have 10,000 customers worldwide; this is becoming a game-changing technology in the datacentre," she said. "Combining UCS with the Unified Fabric, this becomes a unique differentiator for us. A lot of compute vendors are trying to do this but they do not have the strength in switching to do that. We will soon have an integrated stack with unified management as well."

Warrior also talked of how software will become a much more important part of what Cisco does, claiming that she wants it to be "a key competency" for the vendor.

"We are on this journey for software to be much more of a competitive advantage for us," she said. "We are moving from the old ways of thinking about operating systems to ways that are much more intelligent and contextualised."

Rival reactions
Jonathan Hallatt, VAR director of vendor Netgear, agreed with Cisco that the network is central to the needs of businesses and public bodies. But he questioned whether, in the current climate, people would pay the big-name prices that come with big-name vendors.

"More advanced switches are needed to help the flow of data and prevent bottlenecking. Because of this, the switching market is very healthy, but due to continued economic pressures many are no longer willing to pay Cisco's overinflated prices," he said.

Marina Gil-Santamaria, director of product marketing management at vendor Ipswitch's Network Management Division, claimed that, while Cisco has been active in the cloud space so far, it is crucial it makes the right calls from here on out.

"Cisco has been heavily focused on cloud infrastructure monitoring in 2011," she said. "However, cloud deployments are changing strategies for end-user experience monitoring in private and public clouds so it will be interesting to see Cisco's strategy in this space."

Kevin Crehan, senior pre-sales consultant at Redstone, acknowledged that Cisco has "taken on big challenges" in its stated aim to make software a key part of its raison d'être. But Crehan pointed to its early success in the computing world, adding that "major strategic alliances and acquisitions" will likely help Cisco become a big software player.

Crehan also gave the thumbs-up to Cisco's architectural approach, claiming it "has been quick to gain ground here over competitiors".

"These are interesting times in the networking world, and the coming together of the various components within a cloud offering should mean some big changes ahead for vendors such as Cisco," concluded Crehan. "But it is clearly up to the challenge and, if you look at unified communications as a typical example of what it has achieved so far, it will be leading rather than following."