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Cisco Watchers Blinded by SDN

Mitch Wagner

Even if every datacenter in the world dumps its Cisco switches, the company can continue to prosper, according to a Forrester analyst.

Cisco Systems Inc. (Nasdaq: CSCO) released unhappy news in its first-quarter earnings last week. The company had warned that revenue growth was going to be below analyst expectations, and that warning became reality. However, the first-quarter results are "an inflection point in an undulation" that returns to growth with a change in strategy, rather than "a parabolic upside down curve," said Forrester analyst Andre Kindness in a blog post, "The Flash Blindness Caused By SDN Hype Keeps Many From Seeing Cisco's Growth Path."

Observers predicting doom for Cisco focus on software defined networking (SDN) and cloud infrastructures, Kindness says. They assume all datacenters will look like Google's, even though nobody outside of Google really knows what Google's datacenters are like.

But let's say every datacenter switches to white box components and dumps Cisco's more expensive switches, both in the enterprise and the cloud, Kindness says. Cisco can continue to prosper and grow because the networking business itself is about to explode, driven by the Internet of Things.

For example, the typical North American or European home now has one Internet connection with a consumer router and built-in access point with eight ports for printers, TVs, mobile devices, and so on. Over the next 10 years, that same home will need over 400 ports, serving a plethora of devices including air duct register actuators, security cameras, lightbulbs, door locks, window tint, soil moisture, and mineral sensors. The network will need sophisticated security, resilience, and acceleration, inherent characteristics of the kinds of devices Cisco cells.

And homes are simple places compared with enterprises; businesses will need two or three orders of magnitude more ports than homes. Business facilities are being built with tens of thousands of flow, heat, pressure, and other sensors, with Ethernet connections feeding information to process engineers on the other side of the world.

Datacenter ports will simply become less relevant, accounting for less than a quarter of the total ports in a typical enterprise infrastructure, Kindness says

Even if Cisco loses all its datacenter network business to white box switches, it will still "remain the networking juggernaut vendor," because white box switches aren't adequate for the needs of the Internet of Things. "Unlike datacenters, where there is a perfectly controlled environment with a standard set of factors, the edge of the network at a manufacturing site, hospital, retail store, or power substation is a complex, harsh, and dynamic environment where virtualized network functions sitting on server or Linux software on a Broadcom switch won’t cut it," Kindness says.

— Mitch Wagner, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profileFollow me on Facebook, West Coast Bureau Chief, Light Reading. Got a tip about SDN or NFV? Send it to mwagner@lightreading.com.

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User Rank: Light Beer
6/25/2014 | 3:32:15 PM
Not a consumer company

Internet of Things assumes that Cisco makes everything. Cisco has zero luck in the consumer business. They sold off Linksys and Flip. The Internet of Things is a consumer driven business. Cisco has a lot of trouble in emerging markets due to price points (Re: high price for their gear)


User Rank: Light Beer
5/29/2014 | 7:26:10 PM
No luck in consumer market
Cisco has no success in the consumer market - Linksys, Flip etc. Even if the internet of things takes off Cisco might not be the one selling the gear.


Mitch Wagner
Mitch Wagner,
User Rank: Lightning
3/20/2014 | 7:13:23 PM
Re: Not doom but certainly headwinds
@mbushong - "There will always be people who predict the demise of the incumbent. That might be hyperbole, but there will certainly be headwinds."

And eventually they'll be right. The average lifespan of a multinational corporation is 40-50 years. 
User Rank: Light Beer
2/28/2014 | 2:18:38 AM
Re: Do Clouds Dream of Electric Switches?
Thank you for the thoughtful response, @jabailo.

You say: I don't think we have to go all the way to one cloud for everyone, but the good news is, that with these high speed links, there is also no reason that your friendly neighborhood guy with a linux server can't also be a cloudy information provider.  In fact, if you want to have fast devices and a big server in your garage, then why not...it works both ways.

Excellent points, and yes, I will want to have fast devices and a big server. They'll actually be in my living room; I don't have a garage ;)

I worry about ambattled dictators having too much capability to shut down all internet communications as in your Egypt example. I can see it happening right here in the USA in a not too distant future, as we increasingly cede control to the burgeoning police state. But as long as there are a significant number of professionals, entrepeneurs, and hobbyists who maintain increasingly powerful computing nodes, acting as "cloudy information providers", there will be a resilient infrastructure that can survive such a shutdown although its capability will be severely diminished if its Internet connections were severed.

The beauty of cloud computing is that it is built on network concepts. Essentially there are cooperating processes that may be in the same server or on the other side of the county or even the other side of the country, or farther. I don't see any reason the distributed nature of the system has to change even as we exponentially increase the number of devices that tap into it. As you point out, the average consumer wants to watch a movie, not mess with drivers, updates, etc. The availbility of the $25 smartphones, the google tv adapters, and various other devices in the "Internet of things" is a great step forward and I do find it exciting.
User Rank: Light Sabre
2/27/2014 | 9:41:02 PM
Re: Do Clouds Dream of Electric Switches?

Remember Egypt when the revolution begain?

One embattled dictator, who wasn't gettting his way, shut down all Internet communications by turning off the DNS servers.

That's the kind of centralization we don't want.   

But spending time fiddling with drivers -- instead of letting professionals do it for you efficiently -- when we could be watching our movie?  I see no purpose in that.

Overall if putting the boxes on the other side of the connection is that much more efficient, then I think it will be done, and the computer again be made "invisible".  

The way to keep too much power from being vested in the central operators may have to come from competition between them rather than just growing your own.  
I don't think we have to go all the way to one cloud for everyone, but the good news is, that with these high speed links, there is also no reason that your friendly neighborhood guy with a linux server can't also be a cloudy information provider.  In fact, if you want to have fast devices and a big server in your garage, then why not...it works both ways.

For myself, I don't think I've ever been a fan of the traditional PC symmetry for both production and consumption which is why I revel in the netbook, smartphone world.  I can still have a very powerful workbench, but for using an app, just point, click and off you go.   And when the interface is cheap and simple enough (and we're already seeing $25 smartphones using the new simple Mozilla OS) then that brings more users online faster.  As technologists, network engineers and content providers, we all want our services to expand.


User Rank: Light Beer
2/27/2014 | 5:37:04 PM
Re: Do Clouds Dream of Electric Switches?
"imagine if the entire computer were behind the wall.  Much like an old style telephone where the device itself is extrodinarily simple.   Isn't that all people really want...to get and manipulate information?  Not adjust printer drivers?!"

On many levels, @jabailo, it's hard to argue against that. However, it still feels like a step backward to a time when the wizard of IT could get away with just about anything because they had control over all the programs as well as the computer itself. And it seems to me the distributed network of personal computers that we have today is far better for the individual user. With a decent pc, you don't actually have to be connected to anything in order to be able to access a great deal of information and to create incredibly powerful documents, mass media, and even programs.

I enjoy the independence of information. I don't want to give up that freedom, just because I'm unwilling to take on the responsibility of adjusting printer drivers etc.

I was wrong in suggesting that the path is circular; a spiral would be a far better analogy. There are great benefits to both centralized and distributed architectures, and the best results will continue to come from a combination of the two.
User Rank: Light Sabre
2/27/2014 | 5:32:24 PM
Re: Next bubble?
The fact that noise about SDN has died down doesn't mean it's already relegated to the irrelevance bin. SDN enables NFV, which has much wider ramifications throughout the telecom ecosystem. In my MWC meetings, there was much more talk about NFV than IoT -- maybe that's being held for next year's bandwagon.
User Rank: Light Sabre
2/27/2014 | 5:15:01 PM
Re: Do Clouds Dream of Electric Switches?
Do you ever feel like we are just going in circles?

In some sense, yes, but in another no.

IBM and many others had envisioned a personal computer since 1960.   However universally that computer was connected to an outside network to deliver useable information.

In the early 1990s, before the introduction of the Web, PCs had certainly deployed to the work place (where they were connected to mainframes with 3270 emulators) and to the home (mostly to augment people who worked with them), but they really hadn't taken off for pure personal use.  Until they were networked to access web pages and email.

Early on, the networking of devices for the Internet was a nightmare.  I know as I installed many while working for an online company.  Winsocks, buggy software.  Microsoft really hadn't planned on tcp/ip becoming the protocol and was still pushing it's WINS (Windows Internet Naming System) as its successor.  So, it was a terrible mess.

But now, yes, imagine if the entire computer were behind the wall.  Much like an old style telephone where the device itself is extrodinarily simple.   Isn't that all people really want...to get and manipulate information?  Not adjust printer drivers?!

User Rank: Light Beer
2/27/2014 | 2:12:23 PM
Re: Do Clouds Dream of Electric Switches?
@jabalo, that 'new' architecture sounds an awful lot like having a big computer for your company and giving everyone a terminal and an account. Do you ever feel like we are just going in circles?
User Rank: Light Sabre
2/27/2014 | 2:01:27 PM
Re: Do Clouds Dream of Electric Switches?
What about a more traditional server farm...

Well, yes, of course.   People who have worked in IT with VPNs and Remote Desktops and Citrix have been cloudy for years!

And I too question the all-or-nothing delineation about clouds.   Does it evolve to a single cloud, or at some point does it breakdown into multiple clouds.

For me, I have always thought, and I'm seeing further evidence of this, is that we've moving towards a world where the entire application will reside, and run, inside the cloud, and only the screens will be sent back and forth.

Chromecast is an early incarnation of this, where you launch and app like Netflix from a standard tablet, but then the streaming happens between the cloud and the device.

At some point with 1G fiber, if we can get latencies down to less than a millescond, you would not even need a CPU in your home or office.   The connection would be like very long HDMI, mouse and keyboard cables going to a a computer "out there".
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