& 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
Wednesday, August 3, 1:00PM EDT
The Central Office Re-Architected as a Data Center
Guru Parulkar, Executive Director, Open Networking Research Center, Open Networking Lab
UPCOMING COURSE SCHEDULE
Wednesday, August 10, 1:00PM EDT
Telcos & Open Source 101
Phil Robb, Senior Technical Director, OpenDaylight
Friday, August 12, 1:00PM EDT
The Role of Open Source in NFV
Jim Fagan, Director, Cloud Practice, Telstra
Wednesday, August 17, 1:00PM EDT
Using Open Source for Data Centers and Cloud Services
Roz Roseboro, Senior Analyst, Heavy Reading
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
Reinventing Operations for a Virtual, Software-Defined World

7|28|16   |   5:23   |   (0) comments


Heavy Reading Senior Analyst Jim Hodges speaks with Accenture's Larry Socher and Matt Anderson about what service providers must do to transform their business to get the benefits of SDN and NFV including: leveraging DevOps, introducing real-time OSS and implementing analytics.
Women in Comms Introduction Videos
Fujitsu Sales Leader Shares Lessons Learned

7|27|16   |   5:12   |   (1) comment


As Fujitsu's only female sales leader, Annie Bogue knows the importance of asking for what you want, being flexible (she's been relocated five times), keeping a meticulous calendar, 'leaning in,' working harder than everyone else around you, being aware and more.
Telecom Innovators Video Showcase
VeEX Test & Measurement Solutions

7|25|16   |   08:57   |   (0) comments


Cyrille Morelle, president and CEO of VeEX Inc., talks test and measurement with Light Reading's Steve Saunders at BCE 2016. This includes innovative products such as VeSion Cloud-Based platform for network monitoring; MTTplus Modular Test platform for Access, Business, Carrier Ethernet, Transport and Core services; and OPX-BOX+ for Fiber Optics.
LRTV Custom TV
VeEX: Live From BCE 2016

7|25|16   |   03:20   |   (0) comments


VeEX's Senior Director of Business Development, Perry Romano, explains how VeEX provides tools to help install, maintain, monitor and manage network infrastructure efficiently and effectively. The portfolio of products on display include the RXT-6000, MTTplus and TX300s.
LRTV Custom TV
Real-Time Telemetry & Analytics for Intelligent SDN Orchestration

7|25|16   |   03:09   |   (0) comments


Packet Design CEO Scott Sherwood discusses how real-time network telemetry and analytics are enabling a new breed of SDN orchestration applications.
From the Founder
The Russo Report: Driving Disruption

7|25|16   |   07:44   |   (0) comments


In the first episode of a four-part series, Light Reading Founder and CEO Steve Saunders and Calix President and CEO Carl Russo drive around town discussing the disruptive mega-changes in the communications industry and where hope lies for service providers to meet the escalating demands of the cloud.
LRTV Custom TV
NetScout: Maximizing Enterprise Cloud for Digital Transformation

7|20|16   |   04:53   |   (0) comments


Light Reading Editor Mitch Wagner talks to NetScout CMO Jim McNiel about maximizing the benefits of enterprise cloud and digital transformation while minimizing potential pitfalls with a proper monitoring and instrumentation strategy.
Women in Comms Introduction Videos
Ciena's VP Offers a Career Crash Course

7|20|16   |   4:14   |   (2) comments


How did Ciena's Vice President of Sales, Angela Finn, carve out her career path? Simple, she tells WiC. She stayed true to her company, customers and principles. She shares her advice for women on how to be authentic and credible, as well as for companies that want to make a real change to their culture and practices.
LRTV Custom TV
NFV in 2016: Part 2 – Climbing the Virtualization Maturity Curve

7|19|16   |   06:56   |   (0) comments


Many of the initial use case implementations are single-vendor and self-contained. The industry is still climbing the virtualization maturity curve, needing further clarity and stability in the NFV infrastructure (NFVi) and greater availability and choice of virtualized network functions (VNFs). Interoperability between NFVis and VNFs from different vendors ...
Telecom Innovators Video Showcase
Versa Networks' Kumar Mehta on SD-WAN Managed Services

7|19|16   |     |   (0) comments


In Silicon Valley, Steve Saunders sits down with Versa's Kumar Mehta for an interview focused on why service providers are building SD-WAN managed services, and how Versa's telco customers are innovating.
LRTV Custom TV
Juniper Networks & The Evolution of NFV

7|19|16   |   06:01   |   (0) comments


Senior Juniper Networks executives talk to Light Reading Founder & CEO Steve Saunders about NFV developments and the recent independent evaluation by test lab EANTC of Juniper's Cloud CPE solution.
LRTV Interviews
CenturyLink Goes Beyond Managed WiFi

7|19|16   |     |   (0) comments


CenturyLink's managed WiFi allows enterprises, such as retailers and resorts, to track guest WiFi usage in order to help them better communicate with customers.
Upcoming Live Events
September 13-14, 2016, The Curtis Hotel, Denver, CO
November 3, 2016, The Montcalm Marble Arch, London
November 30, 2016, The Westin Times Square, New York City
December 6-8, 2016,
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Five of the Top 10 most targeted countries in Check Point Software Technologies' global Malware & Threat Index for Q1 2016 are in Africa.
Hot Topics
Verizon Sports Big Plans for Yahoo
Alan Breznick, Cable/Video Practice Leader, Light Reading, 7/26/2016
Light Reading Beyond
Steve Saunders, CEO and founder, Light Reading, 7/28/2016
Are IP/Optical Integration Initiatives Moving to Silos?
Faisal Khan, Network Operator Technology Planning Dept., 7/28/2016
Yahoo Signing Off in $4.83B Sale to Verizon
Mari Silbey, Senior Editor, Cable/Video, 7/25/2016
Ericsson Board Has Been Asleep at the Wheel – Consultant
Ray Le Maistre, Editor-in-chief, 7/25/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
There's no question that, come 2020, 5G technology will turn the world's conception of what mobile networking is on its head. Within the world of 5G development, Dr. ...
I've enjoyed interviewing many interesting people since I rejoined Light Reading, but William A. "Bill" Owens certainly takes the biscuit, as we say where I come from.
Animals with Phones
Live Digital Audio

Our world has evolved through innovation from the Industrial Revolution of the 1740s to the information age, and it is now entering the Fourth Industrial Revolution, driven by technology. Technology is driving a paradigm shift in the way digital solutions deliver a connected world, changing the way we live, communicate and provide solutions. It can have a powerful impact on how we tackle some of the world’s most pressing problems. In this radio show, Caroline Dowling, President of Communications Infrastructure & Enterprise Computing at Flex, will join Women in Comms Director Sarah Thomas to discuss the impact technology has on society and how it can be a game-changer across the globe; improving lives and creating a smarter world. Dowling, a Cork, Ireland, native and graduate of Harvard Business School's Advanced Management Program, will also discuss her experience managing an international team focused on innovation in an age of high-speed change.