Cisco Predictions for 2013
2013 is going to be a big year of change for Cisco as it tries to make the shift from networking vendor to IT solution provider.
It's December, which means "tis the season" for many things like being jolly, spending too much time in malls because I waited too long to go shopping, and making predictions. Normally I make broader, industry-wide predictions, but I thought this year I would focus them on Cisco.
Why Cisco? Well, I think 2013 is going to be a big year of change for Cisco as it tries to make the shift from networking vendor to IT solution provider and I think it's worth a deeper look:
Chambers will not retire. Although he discussed it earlier this year, I don't think this is the year we see the man step down. I'm guessing he wants to lead the company through this next transition before he steps away. I do believe though you'll see more of the likes of Gary Moore, Rob Lloyd and Padma Warrior carry the company the flag more often.
The company will unveil its own version of SDN. Historically, Cisco has maintained market leadership by building proprietary versions of standards that do more than the standard. EIGRP versus RIP and Skinny versus SIP are a couple of examples. Want Cisco to support the standard? No problem. Want more features? Then use the "standards plus" version of it. I've spoken to a number of customers that consider moving to the standard a "downgrade," which allows Cisco to maintain significant differentiation in its architectural approach. In 2013, I expect them to unveil an SDN solution that has a "plus" version of Open Stack and/or Cloud Stack and/or Open Flow.
Cisco will make an acquisition. This prediction alone is obvious. It's like saying Jay Cutler will choke in big games. The company will probably make 10 acquisitions minimum. However, I do think you'll see Cisco make a big acquisition next year, something in the multi-billion dollar range. I doubt it will be a storage company, but someone like Citrix or F5 certainly wouldn't be out of the realm of possibility. Other possibilities could be a cloud provider to create more white label services, or technologies related to LTE buildouts. Personally, I would like to see Cisco buy Citrix and amp up the competitive pressure with VMWare, because that would be fun for the whole industry!
The go-to-market around collaboration changes. Previously, Cisco had dominated the UC/Collaboration space. Recently though, the slow-moving Microsoft has gummed up the works for Cisco with its next release of Lync. Customer feedback has indicated that Microsoft seems quite content to just hold the market up by convincing customers to "put down the pencil" until the next release of Lync comes out.
For Cisco, competing with Microsoft is a difficult challenge as Microsoft focuses on different buyers and often leads with chat and presence, where Cisco leads with voice/video. I would expect Cisco to revamp how it goes to market with respect to collaboration, to counter what Microsoft is doing. Cisco has its comfort zone and the company will likely move out of it next year. The Microsoft-Cisco battle will be fascinating to watch next year.
More services won't create channel conflict. Cisco has steadily been growing its services business to the point where it's now 21% of revenue. At the most recent financial analyst conference, the company outlined how it's going to be growing this business to 25% in the next 3-5 years through additional, high-end consulting services.
At first glance, one could look at this and think this might irk its huge partner base, as its resellers currently make gobs of money selling services that are sold along with Cisco infrastructure. However, after talking with COO Gary Moore about this, I believe Cisco understands how to balance the consulting it does with what its reseller partners do, creating more value for both. There may be a small area of overlap and friction, but overall, I would expect Cisco to manage this well.
Network management becomes real. Network management and Cisco have always kind of gone together, but that was more a function of Cisco sales often giving away Cisco Works. Works is long gone, the code gutted, and Cisco Prime is now the new suite of management tools.
In many ways, Cisco didn't need to be strong in network management, as there were some great tools out there including companies like SMARTS, Micromuse, Concord and other that have been acquired into larger framework vendors. Those frameworks are old and in need of an overhaul. Also, managing the network through an understanding of network flows has become much more in demand, as the growth of NetScout and Riverbed Cascade would indicate. Expect Cisco to get serious about network management and Prime to become a bigger focus area for Cisco in 2013.
The last prediction I'll make for Cisco in 2013 is that the company will start to assert itself as an IT company, not a networking company. Again, the shift to mobile and cloud computing make the network more important than it ever has been and Cisco's network-centricity, plus growing compute business with UCS, will allow it to finally have a seat at the CIO table in a much broader group of companies. Expect greater competition with not only the struggling HP and Dell but also VMWare and IBM. Should be an interesting year as the company makes a big shift in strategy.
One final note--unless something big happens in the industry, this is my final blog for 2012. I'd like to wish everyone a great holiday season and offer special thanks to everyone in the NoJitter community for the support over the year. Special thanks to Eric Krapf who handles the role of blogger, editor and coordinator as well as anyone can.
Happy holidays to all!