x
Routing

Cisco Sees Carriers Buying Into 'Architectures'

SAN DIEGO -- Cisco Live -- Service providers are warming up to the idea of a one-vendor network, Cisco Systems Inc. (Nasdaq: CSCO) CEO John Chambers said in a keynote here Tuesday morning.

While that might sound self-serving, he had some evidence to back it up -- a gain of 7.2 points in overall service-provider router market share (to 57.4 percent) since last year, according to stats from ACG Research .

"In the customer set that was the most resistant to using a single vendor, we gained more market share in a year" than any single vendor has before, Chambers said.

It was a highlighted point during Chambers's keynote at Cisco Live, the company's annual customer and partner event.

Chambers had set up that "most resistant" comment by explaining to the audience (most of whom come from enterprise IT) that service providers were a fiercely independent breed. They preferred to use a variety of network gear, forcing vendors to interoperate with each other.

"What's the problem with that? Connectivity is now commoditized," Chambers said. Service providers need to find new revenue sources (and cost-cutting sources), and that's made them more open to a single-vendor architectural approach, he claimed.

The shift is important because architectures have become a central part of Cisco's strategy. They'll be particularly crucial to Cisco's plans in cloud computing and software-defined networking.

Of course, that's nothing new for Cisco; like any big company, it's always looked for ways to sell more products to each customer.

But Cisco is coming out of a restructuring that saw the company pare down to five priorities: routing and switching; the data center; video; collaboration; and technology and business architectures. The whole "architecture" idea is now formally a tenet of the company.

At Cisco Live last year, Chambers had noted that he thinks these transitions are going to happen more frequently. He alluded to that idea a few times during his keynote Tuesday. "Market transitions wait for no one," he said. "The speed of change is just getting started in terms of this hyperconnected world."

Last year, Chambers had also promised to simplify Cisco for its customers, and a cursory audience poll gave him a mixed report card there. Asked how many people found Cisco easier to work with than last year, a smattering of people raised their hands. "About the same" got a much stronger response. Only one or two attendees voted that Cisco had actually gotten worse.

One thing Cisco might have to start doing is disclosing its longer-term plans, Chambers said. This goes hand-in-hand with the whole "architectures" thing. If Cisco is asking customers to commit to major business transformations based on big architectures, it's going to have to talk about the next step -- the multiple phases of those architectures and how they tie into one another. "We've got to get better at that," he said.

For more

— Craig Matsumoto, Managing Editor, Light Reading

Pete Baldwin 12/5/2012 | 5:30:30 PM
re: Cisco Sees Carriers Buying Into 'Architectures'

Assuming Chambers is right, I'm wondering how permanent this is. The whole "architectures" thing might be a pendulum swing that eventually reverts back to the "best in breed" approach.


Of course, Cisco will try to make that as hard as possible by setting up a supposedly irresistable roadmap for the next couple generations of architectures. But you'd think service providers would want to have multiple vendors on the hook, like always, to play off one another.


Still - a spike in router market share is nice, but market share is always transient. I would guess Cisco is seeing a lot of anecdotal evidence to back up the theory.

AESerm 12/5/2012 | 5:30:29 PM
re: Cisco Sees Carriers Buying Into 'Architectures'

You're right, the architecture thing is another way of framing 'end-to-end' (an expression that perhaps Cisco first coined?) What looks new is the apparently lower resistance from service providers who, as Chambers notes, are an independent lot who have tend to talk about 'their' networks (not one that belongs to tech supplier.)

yarn 12/5/2012 | 5:30:29 PM
re: Cisco Sees Carriers Buying Into 'Architectures'

Chambers is right: The notion of an architecture is attractive to buyers because it implies that a holistic design view has driven the development of the individual components, making sure that everything fits nicely. IBM already saw this in their SNA.


But a notion that "architectures sell" is dangerous as it will tempt the marketing folks to turn anything slightly related into yet another architecture. Not saying this is the case here, but when sales aspects become such a dominant driver it's only a matter of time when the "scapes" and "nets" will be turned into "architectures" as well. And then we need to find a new word for architecture.

joebraue 12/5/2012 | 5:30:25 PM
re: Cisco Sees Carriers Buying Into 'Architectures'

Craig, great point about need for Cisco and others looking to be single-source to understand long-view of product strategy. Tough to see single-source happening when even the smallest carriers are keeping Juniper, A-L and others around in the garage to keep Chambers' sales folks honest. Carriers buy on 3-5 year product paths. Of course, Chambers is probably telling his 3- to 5-year product strategy to his top customers. He just hasn't told it you (us).

Pete Baldwin 12/5/2012 | 5:30:24 PM
re: Cisco Sees Carriers Buying Into 'Architectures'

> But a notion that "architectures sell" is dangerous as it will tempt the marketing folks to turn anything slightly related into yet another architecture.


Now, that would be interesting. There's going to have to be some sales discipline -- or at least discipline-of-language -- to keep the 'architecture' thing from diluting.


Combining Joe and Jtombes' points... I find myself wondering how long it might be before the pendulum swings back, and carriers decide an 'architecture' isn't the way to go.  Maybe never (Cisco would like that), or maybe in just a few years.


In other words, Cisco and the service providers probably have different ideas of how long an architecture is built to last.


paolo.franzoi 12/5/2012 | 5:30:24 PM
re: Cisco Sees Carriers Buying Into 'Architectures'

Craig,


I think the telcos are architecture oriented in their thinking.  It is a matter of who does the architecture.


For example, if you go into your way back machine you will see the following model in the US:


- Bell Labs invents things and creates architectures


- Bellcore codifies these architectures into individual specifications


- Western Electric build equipment to fulfill the specifications


- Operating Companies deploy the equipment as specified


So, for an equipment vendor to say that carrier's buy into architecture is nothing new.  One of the things that happened post-breakup is that the architecture setting thing went into the operating companies.  I think the notion of an end to end in a carrier is going to be a huge challenge, unless this architecture is open and includes everyone.  Unless they are going to change ALL the equipment to one vendor (good luck with that) then the notion of end to end will have some form of tunneling involved (let me get my good stuff through evil 3rd party equipment).


seven


 

Soupafly 12/5/2012 | 5:30:18 PM
re: Cisco Sees Carriers Buying Into 'Architectures'

I want to touch on another point.


In most of the european Tier1 operators, there has been a trend in value migration towards the vendors. The carriers are looking to them to provide additional resources & value in helping shape services, operational decisions and network capability/ capacity.


If that statement is true, then the No.1 benficiary of that trend would be a Cisco type player, someone who invests fortunes in marketing & slick suit sales people alongside a technical team on the ground that can deliver - for a price.


So whilst the lip service from on high is its "our network" & they just supply the kit, when you look at the strength, depth & core gene pool of staff and the pressures they are under inside each of the carriers, the blurring between vendor & operator will continue. It is in that inter-secting venn diagram that a savvy, strategically smart & competent player can enjoy rich returns.


Its also a key strategic leverage point against global competition. By pursuing that course you increase the sticky component & force the pain onto the competitor to match you in synchronously delivering sales & execution prowess.


SF

HOME
Sign In
SEARCH
CLOSE
MORE
CLOSE