& cplSiteName &

Chambers Caught in 90s Deja Vu

Carol Wilson
2/12/2014
50%
50%

Despite the expected revenue weakness in the fiscal second-quarter results announced today, Cisco CEO John Chambers says 2014 feels like the mid-1990s to him -- with a boom about to come. (See Revenue, Income Slide In Cisco's Q2 2014 and Cisco Set for Sales Slump.)

On today's earning call, the upbeat exec said that this year will be the inflection point for the "Internet of Everything," and that Cisco Systems Inc. (Nasdaq: CSCO) is well positioned to benefit from helping enterprises reshape themselves for that technology trend.

"This reminds me of the mid-1990s, just before the Internet and e-commerce moved from being a tech thing to something impacting all businesses," Chambers said. "There is a lag between thought leadership and early adoption, and we are still in the early phases of this."

Cisco has been touting the Internet of Everything -- a term encompassing mobility and machine-to-machine communications -- for six years but is only now finding interest in it growing. "Six years ago, we had to buy someone a drink to talk about it. Now they want to buy us dinner."

Pegging the market size at $19 trillion, Chambers said Cisco will capture, not only equipment sales, but also substantial consulting services revenues, as it moves to "outcome-based" approaches. He cited the vendor's efforts in Israel, where it is building a country-wide ultra-high-speed fiber optic network and working with the government on jobs, healthcare, education, and more.

Chambers also attributed the 12% slide in sales to service providers to a product cycle and timing issue. While older products such as cable video and set-top systems are approaching the end of their lifespan, the next generation of products -- Cisco's approaches to network and datacenter virtualization -- is emerging. (See Cisco Goes Soft With APIC, Intercloud Announcements and Cisco's ACI Gets Physical With SDN.)

Notably, cable video revenue declined 20%, contributing significantly to the overall SP slide.

Cisco also has come under some fire for an approach to software-defined networking that seems to emphasize an end-to-end, single-vendor architecture as the best approach, versus the best-of-breed interoperability that service providers say they are seeking with virtualization.

Ever the salesman, Chambers told financial analysts on the earnings call that Cisco's "architectural" approach to building the next generation of datacenters and networks will enable the Internet of Everything to take off. Past efforts have failed "because people try to do it one step at a time." Instead, Cisco will deliver a complex solution that encompasses mobility, datacenter, analytics at the edge, collaboration, security, and more.

The competition, he said, is still doing things piecemeal -- and he lumps both Cisco's traditional competitors and the startups tackling next-generation technologies into that category.

— Carol Wilson, Editor-at-Large, Light Reading

(11)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 2   >   >>
DHagar
50%
50%
DHagar,
User Rank: Light Sabre
2/14/2014 | 5:50:12 PM
Chambers Caught in 90s Deja Vu
Totally agree, GregW333.  It will only become a market if it aggregates.  Cisco's vision would be like someone trying to advance the use of electricity by building their own utility solution.  I think any IOT market will be the result of consumer/commercial use.

That's why I fully agree with Carol.  I think Chambers thinks Cisco has a vision that will grow and create the market he is trying to "sell". 

DHagar
GregW333
50%
50%
GregW333,
User Rank: Lightning
2/14/2014 | 5:21:48 PM
Re: Chambers Caught in 90s Deja Vu
I find these wild projections inane and unbecoming for both Cisco and Mr. Chambers.  Are they an act of desparation?  

IoT...what's a thing?  It's either NOthing or EVERYthing...a zero trillion dollar market or an infinite one.  

I'd like to know how billions of devices sending infrequent small packets are going to generate demand for high end routers?  Video...yes, IoT ...no?
Ray@LR
50%
50%
Ray@LR,
User Rank: Blogger
2/14/2014 | 4:22:45 AM
Re: Wouldn't Be Surprised
Oh Mitch, looks like we are going to have some interesting discussions around what constitutes a great movie. Even a good one. Or just bad.

Scent of a Woman is one of the few movies I have ever considered walking out of.

 

And I didn't say there were none - Pulp Fiction, Fargo and LA Confidential would grace any decade.
DHagar
50%
50%
DHagar,
User Rank: Light Sabre
2/13/2014 | 10:04:06 PM
Chambers Caught in 90s Deja Vu
I think you have hit the key issues that are weakening Cisco's market share, Carol.  It appears that Chambers is trying to define the market with his vertical solutions, rather than playing to it.

The internet of things, I believe, will become a reality, but it will not reach it's potential in contained and structured solutions.  I believe it will be, like the internet itself, the evolution of commercial and consumer use that will shape and grow the market.

I think Cisco is missing the boat in not figuring out more effective ways to take advantage of the trends; maybe that is contributing to their weaker financial growth.

DHagar
Carol Wilson
50%
50%
Carol Wilson,
User Rank: Blogger
2/13/2014 | 6:43:17 PM
Re: Wouldn't Be Surprised
Mitch, innovation is one thing but at the height of the Internet, people were investing in companies that had no clear strategy on how they would ever make money, given that their products were being given away or sold at prices that had no hope of generating profits. 

You can innovate without being stupid. 
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
2/13/2014 | 6:40:11 PM
Re: Wouldn't Be Surprised
Carol Wilson - If the networking industry is to re-live the '90s, let's hope we've learned something from that era, when billions were invested (and lost) on companies, products and services for which there was no clear business case. 

That's how innovation works. Nine out of ten startups die, but the survivors add value. 

Pets.com went down the toilet, but we buy pet supplies from Amazon. The idea survived. 
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
2/13/2014 | 6:38:52 PM
Re: Wouldn't Be Surprised
Too few great movies? A Few Good Men, Scent of a Woman, The Fugitive, Remains of the Day, all of Kevin Smith's good movies, Four Weddings and a Funeral, Pulp Fiction, The Shawshank Redemption, Babe, Fargo, Jerry Maguire, Good Will Hunting, LA Confidential, Elizabeth, Saving Private Ryan, Shakespeare in Love, Titanic. 

Also, Starship Troopers. So maybe you have a point there. 

I loved the 70s. Great decade for plastic, polyester, hairspray and disco. 
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
2/13/2014 | 6:35:35 PM
Re: Wouldn't Be Surprised
Revenue is weak, but Cisco CEO John Chambers says 2014 feels like the mid-90s to him, with a boom yet to come. The boom, he says, is the "Internet of Everything."

The IoT will be big but I don't know that Cisco will necessarily be a winner. They're tied to legacy technology. 
Carol Wilson
50%
50%
Carol Wilson,
User Rank: Blogger
2/13/2014 | 10:13:39 AM
Re: Wouldn't Be Surprised
If the networking industry is to re-live the '90s, let's hope we've learned something from that era, when billions were invested (and lost) on companies, products and services for which there was no clear business case. 

I'd give Cisco credit for having definitive strategy, although I don't know that the "architectural" approach is the best option. They have been pushing this Internet of Everything idea for a long time and they do seem to be maintaining a focus.

It's interesting to look back now at the telecom bubble and realize that at least half of the industry giants going into that era - Nortel, Siemens, Lucent, to name three -- were unable to navigate their way through significant technology shifts. The next wave of technology change may bury some other giants, but it doesn't look like Cisco will be one of them. 
Ray@LR
50%
50%
Ray@LR,
User Rank: Blogger
2/13/2014 | 3:40:13 AM
Re: Wouldn't Be Surprised
Great post.

But don't forget the "better the devil you know" effect.... if in doubt, do you stick with Cisco? Plus you know it isn't going away any time soon and coirporate longevity is going to be important.

As a side note - I really hope it's not the 90s all over again. Terrible clothes, awful music, and not that many truly great movies. The 70s were much better, but then if Chambers ever says it's like the 70s all over again, well... that would be when no one ever got fired for buying from Big Blue, right?
Page 1 / 2   >   >>
Educational Resources
sponsor supplied content
Educational Resources Archive
Light Reading’s Upskill U is a FREE, interactive, online educational resource that delivers must-have education on themes that relate to the overall business transformation taking place in the communications industry.
NEXT COURSE
Friday, September 30, 1:00PM EDT
Gigabit & the Great Migration
Robert Howald, Vice President, Network Architecture, Comcast
UPCOMING COURSE SCHEDULE
Wednesday, October 5, 1:00PM EDT
Gigabit & Smart Cities
Joe Kochan, COO & Co-Founder, US Ignite
Friday, October 7, 1:00PM EDT
Gigabit & DOCSIS 3.1
Ty Pearman, Director, Access Architecture, Comcast
Wednesday, October 19, 1:00PM EDT
Securing a Virtual World
Rita Marty, Executive Director, Mobility and Cloud Security, Chief Security Office, AT&T
in association with:
From The Founder
Light Reading today starts a new voyage as part of a larger Enterprise.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
Flexible Deployment Approaches for the Gigabit Services Evolution

9|29|16   |     |   (0) comments


For many operators, the gigabit evolution begins with the shift from DOCSIS 3.0 to DOCSIS 3.1. But that move represents a change not only in the protocol itself, but in the approach to architecting their entire DOCSIS delivery chain -- from the headend to the outside plant and home gateway components.

Jonathan Ruff, senior director of global technical ...

LRTV Interviews
Level 3 VP: Enterprises Need More for Less

9|29|16   |   05:27   |   (0) comments


Andrew Dugan, Level 3 group vice president of global technology and IT, says enterprises need more bandwidth and they need it faster and with greater security, but they want to spend less, if possible. They are looking to carriers to reduce their network complexity and help protect them from cyberattacks as well.
LRTV Interviews
CenturyLink: SDN/NFV Pose New Interconnection Possibilities

9|28|16   |   04:37   |   (0) comments


Network operators should develop new APIs and business processes for reselling virtual assets to each other, says CenturyLink's Bill Walker. That will enable them to build digital business portfolios that help them avoid becoming commodity transport providers.
LRTV Interviews
Level 3: Overcoming Terror of Being Supplier, Integrator & Developer

9|28|16   |     |   (0) comments


At Light Reading's NFV & Carrier SDN event in Denver, Travis Ewert of Level 3 Communications said there is terror in becoming supplier, integrator and developer, but it can be overcome and be cost effective.
LRTV Custom TV
Introducing IoT World News

9|27|16   |   01:43   |   (0) comments


Self-driving cars, medical sensors, smart cities... and refrigerators. In order to address the huge scope of IoT, KNect365 has created a unique online community that will help businesses to understand and monetize the opportunities that live within the IoT market. We look forward to welcoming you to IoT World News -- your gateway to a better connected future.
LRTV Interviews
AT&T: Reusable Functions Next NFV Key

9|27|16   |   06:03   |   (0) comments


The next generation of NFV has to break functions down into reusable software chunks, making everything much more cloud-like.
LRTV Interviews
Masergy on Security: Attackers Gaining Upper Hand

9|27|16   |   5:10   |   (2) comments


At Light Reading's NFV & Carrier SDN event in Denver, Ray Watson, vice president of Global Technology at Masergy, says that because of the growth in virtualization, the threat landscape is shifting in favor of the attackers. As a result, service providers need to think beyond just defending the perimeter and take a more holistic approach to security.
LRTV Interviews
Verizon Takes Next Step on Biz Virtualization Journey

9|26|16   |   4:38   |   (2) comments


At September's NFV & Carrier SDN event in Denver, Light Reading sat down with Victoria Lonker, director of Product and New Business Innovation at Verizon, to chat about where the carrier is with delivering virtualized services to business customers.
LRTV Interviews
Global Services: The $40B Face-Off

9|26|16   |   05:53   |   (1) comment


More service providers than ever before are battling it out to win a slice of what is now a $40 billion global communications services pie, explains Ovum Principal Analyst David Molony.
LRTV Documentaries
MEC Congress: The Key Takeaways

9|22|16   |   03:25   |   (3) comments


Three key takeaways from the Mobile Edge Computing (MEC) Congress in Munich, Germany.
Wagner’s Ring
Time to Shut Up About 'Dumb Pipes'

9|22|16   |     |   (19) comments


Service providers can't compete with OTT players. It just isn't in their DNA. Instead, service providers need to embrace what they're good at -- providing reliable, secure connectivity.
Wagner’s Ring
Keeping Your Tech Career Going After 50

9|21|16   |     |   (13) comments


How do you keep your career moving forward when you're past the half-century mark?
Upcoming Live Events
November 3, 2016, The Montcalm Marble Arch, London
November 30, 2016, The Westin Times Square, New York City
December 1, 2016, The Westin Times Square, New York, NY
December 6-8, 2016, The Westin Excelsior, Rome
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Hot Topics
WiCipedia: The Women Helping Women Edition
Eryn Leavens, Special Features & Copy Editor, 9/23/2016
Eurobites: Telefónica Taps Juniper for Network Security
Paul Rainford, Assistant Editor, Europe, 9/26/2016
Open Source Getting on My Nerves
Carol Wilson, Editor-at-large, 9/26/2016
Powell Kills the Cable Show
Mari Silbey, Senior Editor, Cable/Video, 9/29/2016
Telstra Sees Quadrupled Data Capacity by 2020
Carol Wilson, Editor-at-large, 9/28/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading CEO Steve Saunders and UXP Systems CEO Gemini Waghmare discuss the strategic importance of digital identity for operators in the midst of transformation.
Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
Animals with Phones
There's Nothing Like Missing a Full Minute of Pokémon Go Click Here
Live Digital Audio

A vital part of increasing the number of women in comms is transforming the ways companies can support and empower women. While progressive company policies that support both men and women in achieving work-life balance are a step in the right direction, creating a company culture that supports those policies can at times be more challenging.

During this show, we'll talk to Lynn Comp, Senior Director of Industry and Sales Enabling (ISE) in the Network Platforms Group at Intel, about why those challenges exist and how companies can overcome them. She'll provide insight into how Intel has worked to create a culture that supports work-life balance, and provide steps and guidance for other companies wishing to do the same. We will also leave plenty of time to get your questions answered live on the air.