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Strategic musings on the latest Cisco/Insieme rumors

In what is easily the most detailed press coverage of what Insieme intends to launch, Jim Duffy reported facts obtained by the ubiquitous sources in an article on Network World last Friday: http://www.networkworld.com/community/blog/ciscoinsieme-40g-coming-close-10g. If you have not read the article and you have interest in Insieme, you ought to take a look.

In the article, Duffy writes:

The impact of ACI on existing Cisco Nexus products could be significant. Its VXLAN foundation could obsolete Cisco's five-year-old Fabricpath and recently-announced Dynamic Fabric Automation, yet users needing those features and LISP, OTV and MPLS will continue to require the Nexus 7000/7700 with F3 capabilities.

If you have been following the Insieme chatter for awhile, you probably heard rumors that Cisco would announce its spin-in at any of Cisco Live, VMWorld, or Interop NY. As those events came and passed, the theory was that there was some internal jockeying as competing Cisco factions squared off against one another. This was, of course, all in support of having a coherent data center switching strategy.

While I have no doubt that there are people inside Cisco who think there needs to be a coherent data center strategy, I think that a non-overlapping technical strategy is not exactly the same thing. Said differently, if I were John Chambers, it would be perfectly fine with me if I had different teams offering competing solutions to the same space.

How can that make any sense?

Cisco is a dominant incumbent. It is hard to believe that they will ride this newest wave of disruption to even higher market share. Their primary strategic imperative has to be defense. They are facing a new push from challengers buoyed by venture capital chasing the SDN dream. They are up against a handful of white box switching companies looking to do to networking what white box servers did to compute. They face increasing competition from the mainline networking guys like Brocade, HP, Dell, and Juniper. And they have to be wary of what VMWare is up to.

All of these headwinds spell tougher times for Cisco. With the various constituents competing along different axes, Cisco will have to fight through both price and innovation. 

So how do you put together a coherent strategy against all of these different foes? The answer is: you don't.

Cisco doesn't need to have a single competitive solution to all of the different threats that face them. The way to think about this is not as a data center problem looking for a solution. Instead, picture the switching market as more of a Choose Your Own Adventure book. Cisco's job is to make it so that whatever choice you make, there is a Cisco ending that you wind up with.

This means that customers looking merely to keep their networks functioning need to have an easy upgrade path. For these Cat6k customers, Cisco continues to invest in the Cat6k. If a customer is interested in dipping a toe in the Fabric Waters, FabricPath is sitting there waiting. If a customer wants to try out more of an SDN solution, Cisco is backing OpenDaylight. Whatever a customer might want to try, Cisco's strategy is along the lines of "We have that."

The first reaction from folks is that having multiple solutions to the same problem is an expensive way to compete. This is actually a true statement. But think about this slightly differently. If you were a competing networking company, would you invest in any of legacy, fabric, or SDN if it meant grabbing 10% share? The answer is an unequivocal yes. 

So why then is it surprising that Cisco would have each of these solutions to hang onto that same 10%?

I don't mean this to say that Cisco has networking always and forever in the bag, but this is why I think some of the pundits' conclusions that SDN spells the end for Cisco are a little bit lazy. Whoever knocks Cisco down in the switching space will have to take out more than just "data center". They have to take down a few flavors of data center.

But does this mean that Cisco is invulnerable?

Absolutely not. Even the largest companies with the toughest of holds on an industry are vulnerable. If Insieme teaches us nothing else, it should teach us that Cisco has realized it cannot reinvent technologies without freeing up innovation from the somewhat stifling culture that permeates the Mother Ship. To date, they have a pretty strong track record of having employees start these offshoot companies and bring back the products. But with the VC world heating up, these spin-ins are becoming increasingly expensive.

As external investments become more pricey, it reduces the margin of error. So long as the big blockbuster movie pays off, the studio can afford more. But with a more intense competitive landscape than in any time in recent memory, it will be interesting to see if the success rate takes a hit at all. 

And of course there is the broader industry trend toward heterogeneous integration. Much of the hope (and hype?) of technologies like SDN, NFV, Network Virtualization, and DevOps is predicated on an ability to unify multiple solution components through some overarching shim layer (call it orchestration or management or integration or whatever you like). That unification of disparate IT silos might ultimately spell the end for a couple of the Choose Your Own Adventure endings. As these endings disappear, there is a very real question about where those customers wind up. 

I personally believe that Cisco has been fairly crafty in keeping its strategic options open. I see the in-fighting as a bit more Machiavellian than dysfunctional. But I do think the number of endgames is narrowing. I suspect that this will force a sharpening in what has probably seemed to many as a fairly blunt strategy for the past several years. The Insieme launch on November 6 will likely be our first collective chance to get a peek at how Cisco views this whole thing.

To read more posts on this topic, check out:

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The best marketing efforts leverage deep technology understanding with a highly-approachable means of communicating. Plexxi's Vice President of Marketing Michael Bushong has acquired these skills having spent 12 years at Juniper Networks where he led product management, product strategy and product marketing organizations for Juniper's flagship operating system, Junos. Michael spent the last several years at Juniper leading their SDN efforts across both service provider and enterprise markets. Prior to Juniper, Michael spent time at database supplier Sybase, and ASIC design tool companies Synopsis and Magma Design Automation. Michael's undergraduate work at the University of California Berkeley in advanced fluid mechanics and heat transfer lend new meaning to the marketing phrase "This isn't rocket science."

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