Cisco Revenues Jump, But Challenges Remain
The company already is seeing results, he said. The Nexus 9000 switch platform—the foundation of ACI—grew its customer base from 580 to 900 over the quarter, and that the number of paying customers for the Application Policy Infrastructure Controller (APIC) has doubled since Cisco began shipping ACI technologies in late July. "We are tying together the breadth of our product portfolio to deliver solutions that drive growth and economic opportunity, with security and scale," Chamber said. "A year ago we were fighting an SDN perception battle, with competitors using PowerPoint instead of products. Today with ACI, we are bringing programmability and automation to networking on a scale well beyond what competitors define as SDN. Now we are in the market with products and solutions and don't see either traditional box competitors or the PowerPoint newcomers able to keep up." Patrick Moorhead, principal analyst with Moor Insights and Strategy, said that despite some of the quarterly numbers, Cisco appears to be heading for trouble. The push for more open networking and SDN will drive businesses away from Cisco, Moorhead told eWEEK. Already most major public cloud providers are using technologies such as Big Switch's open operating system or SDN solutions certified by consortiums such as OpenDaylight, of which Cisco was a founding member. Enterprises have yet to fully embrace SDN while they wait for the technology to mature, but CIOs with whom he has spoken are looking for a reason to move away from Cisco's more proprietary offerings, he said. That will come when enterprises begin launching private clouds over the next 18 months.It will be difficult for Cisco to miss the iceberg as it continues to try to deal with the rising demand for open networking with technologies that may be more open than what the company has sold in the past, but which still have proprietary hooks in them, he said. "I think the chances long term are low of them pulling this out," Moorhead said. "Like IBM, no matter how you dress up something, the [air]of proprietariness and lock-in is impossible to get away from."
"That is really the iceberg that is in front of Cisco," Moorhead said. "It's not really a matter of 'if,' it's more a matter of 'when'."