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Cisco CEO: We're going to 'crush' Facebook's networking plans and 'have fun' beating VMware

Saturday, 14 February 2015
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John Chambers Cisco Live
Cisco CEO John Chambers
Hot off a good quarterly earnings report, where Cisco grew revenues by 7% and forecast 3 to 5% growth for next quarter (about what analysts were expecting), CEO John Chambers was absolutely ebullient.
  • He declared his competitors all-but-vanquished, particularly upstarts like Facebook and VMware.
  • He said no one needs to worry about Cisco's gross profit margins due to increased competition.
  • He also indicated, again, that he's still no where near ready to retire. Chambers, 65, said he ran four miles that morning, doing it in his fastest time ever, and he lifted weights.

Crushing Facebook

An hour before Cisco's earnings, Facebook announced some big progress in its efforts to build a new kind of computer network, using products it developed for itself and is sharing with the world. It urged others to join it in building the same kind of network. Cisco is the dominant player in the network industry, so Facebook's efforts are a rebuff of Cisco's ways.
Facebook isn't alone. A number of startups, like Plexxi and Pluribus, are doing a similar things, using off-the-shelf components and open source software. They say their networks are less expensive and easier to manage than the traditional way (i.e., a Cisco network).
Cisco calls them "white label," "white box" or "merchant silicon-based switching," networks, which means they use computer processors bought from vendors, mainly Broadcom, instead of the custom-made chips like Cisco creates for its own wares.
Many analysts are concerned that these efforts will hurt Cisco, but Chambers pooh-poohed the idea.
"We’re seeing no unusual competition, from white label or white box, nor will we in the future," he declared.
Customers are opting to buy another round of Cisco's products, instead of these competitors, "simply because of security. In this environment, they aren't going to take risks," he said.
"This is where we're just going to crush the white label. There's got to be a security architecture approach. All it takes is one breach and you've done more damage to your brand as a company," he added.
That gives you a taste of how Cisco plans to position itself against this new crop of upstarts. Cisco is also a major vendor of computer security products, selling $416 million's worth last quarter.
Cisco John ChambersFlickr/OracleCisco CEO John Chambers

Beating VMware and enjoying it

Chambers also said that his company is planning on wiping the floor with VMware, which is not a "white label" competitor, but is selling network software that competes with Cisco's products.
VMware, and its parent company EMC, are still some of Cisco's closest partners. They have a joint company together called VCE that sells a lot of Cisco's hardware, particularly its servers.
But, as we previously reported, their relationship changed when VMware bought a startup called Nicira in 2012 for $1.2 billion, snatching Nicira out of of Cisco's arms, and launching a new mission to take down Cisco.
"VMware is a competitor," Chambers said. "We're going to view them as a competitor and we will beat them and have fun doing it. I wish I was a better person, but I'm not."
He also mentioned, a few times, that Cisco now has partnerships with EMC's competitors like NetApp and, more recently, IBM.

No worries about profit margins

With competitors dispensed with, so should the ongoing worries that Cisco is going to forced into trimming its profits. The company has gross margins in the 60% range and that's not going to change in the foreseeable future, Chambers said.
That's because Cisco is ramping up in new, higher profit areas, like consulting and the Internet of Things, he says.
"I've never been more comfortable with any area of our business than our ability to maintain gross margins. It's a mix issue, he says. "I think our gross margins have been the most predictable part of our business."
He also declared: "I’ve never felt better about our business and future. We’re back."

Cisco Live 2015 – What’s The Difference Between The IoT And IoE?

Sunday, 8 February 2015
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internet of things pc

Why does Cisco prefer its own acronym to describe IoT?
Cisco has big plans for the Internet of Things (IoT) – except it doesn’t call it that. It prefers the moniker of Internet of Everything (IoE), but why does it make such a distinction and is it more than a mere marketing term?
At the Cisco Live event in Milan earlier this week, the company sought to establish the difference between the two terms. It says the IoT just connects objects, but this IoE uses a network to correlate people, process, data and things to become “intelligent”.
“In the IoE era, we are surrounded by things becoming intelligent,” said David Bevilacqua, vice president of southern Europe at Cisco. “I’m not sure if smart is intelligent. My TV is smart but it does nothing except be connected. I do not believe just being connected means intelligent.
“Intelligence is the network and the network is the platform when you can correlate the events.”

IoT or IoE?

Cisco Live Meraki] (1)
The company claims the IoE has the potential to create $19 trillion of value over the next ten years, a figure which Joseph Bradley, who heads up Cisco’s IoE consulting service, helped to create. He told TechWeekEurope the figure is based on the savings, opportunities and increased productivity that can result from IoE adoption.
Cisco uses examples of smart lighting and parking systems saving the city of Barcelona millions of dollars and the firm is partnering with the Expo 2015 in Milan to create a smart city at the venue site.
Bradley said the key difference between the IoT and IoE is that the former is just an idea whereas the latter has a positive financial impact on the business.

Generating value

“A great idea is a great idea, but it needs to generate value for the enterprise and the citizen,” he explained. “The technology has been there for a while, but the innovation is the business model.
“We think IoT is very important – connecting a ‘dark asset’ – as it starts the initiation of the discussion, but in order for an enterprise to extract value, you actually have to think about how you’re going to make that data usable and how you’re going to change decision making.”
“Big data is great, but it is worth nothing without big judgement. Presenting information at the end of the day is great, but if I do the exact same thing I did before I was presented with it – it’s nothing. The process, people and how you communicate that is so, so important and that’s why we emphasise it so much.”

Cisco role

Cisco Live 2015 (1)Cisco believes all types of businesses can benefit from the IoE, but says the prerequisite is that they become a ‘digital business’ and, naturally, it wants to help customers create the infrastructure to support next generation applications.
Carlos Dominguez, senior vice president at Cisco, urged those attending to the conference to become “gurus” for the IoE and said technology was now assuming greater importance at boardroom level having previously been seen as a necessary evil.
“In the last 25 years, we’ve had the birth of the Internet, social media and mobile. None of these things existed then and we’re so dependent on them,” he said. “Before these technologies, we lived in a very local world. Today in a global world, when anything happens anywhere at all, we’re immediately notified.
“What we’re beginning to see is that technology and connectivity are the enablers.”

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