Chambers to Step Down as Cisco CEO, Replaced by Robbins
Despite Cisco's dominance in the networking space—where is owns about 60 percent market share—and its growing data center business, there are challenges for the company. A growing group of top-tier vendors—such as Hewlett-Packard, Dell, Juniper Networks, Huawei Technologies and Avaya—continue to chip away at Cisco's lead. At the same time, new competitors are emerging in such areas as SDN and NFV, including VMware, with its NSX SDN platform. Network virtualization also has given rise to a host of smaller vendors, such as Big Switch Networks, that are gaining traction in the networking space, and driving rivals like Dell, HP and Juniper to adopt a strategy around what Gartner analysts call "brite boxes"—branded networking gear that can run third-party operating systems and software. And while Chambers may swat aside ideas that white-box makers represent a threat to his company, industry analysts are finding that ODMs are making inroads into all segments of the market, from servers and storage to networking. Infonetics Research analysts in March found that bare-metal switches—hardware that is not locked into a specific operating system or other software—accounted for 11 percent of the data center ports shipped last year, and that number will grow to almost 25 percent by 2019. "Up till now, bare-metal switching has been attractive mainly to the large cloud service providers (CSPs) like Google and Amazon, who provide their own switch software integrated into data center orchestration and management platforms," Cliff Grossner, research director for data center, cloud and SDN at Infonetics, said in a statement."But with vendors such as Dell and HP jumping into the mix with branded bare-metal switches, adoption of bare-metal switching is going to accelerate as tier 2 CSPs and large enterprises endeavor to achieve the nimbleness demonstrated by Google.""The market has recognized the benefit of ACI as compared to PowerPoint concepts of aspirational competitors," Chambers said at the time. "ACI and APIC will become the cornerstone of the next generation of networking architectures for many years, much like the UCS has become in the data center."
Still, Chambers is confident in Cisco's direction. In February, he noted that during the last three months of 2014, sales of Cisco network switches grew 11 percent over the same period a year earlier. More specifically, revenues for its Nexus 3000 and Nexus 9000 switches—the foundation for ACI—increased 350 percent, while the number of customers for the Nexus 9000 switches and ACI jumped from 580 earlier last year to 1,700 in the final months of 2014. Cisco has shipped more than 1 million Nexus 9000 installed ports, and the number of customers of the Application Policy Infrastructure Controller (APIC) grew past 300 since the technology was released in July 2014.