Cisco's Chambers downplays the perceived danger of 'virtual network' systems
In a recent earnings call, John Chambers, CEO of Cisco Systems, dismissed the notion that recent developments in software-defined networking (SDN) pose a threat to the company's business.
Cisco, a pioneer in network virtualization, introduced the Nexus 1000V, the first virtualized switch, in 2009. This software switch interoperates with VMware's virtualization software, marking a significant step towards network virtualization.
The company's Open Network Environment includes SDN functionality, allowing companies to create 'virtual networks' based on switches from multiple suppliers. This could potentially challenge Cisco's near monopoly of the data center IP switching market. However, Chambers stated that the partnership with VMware will not be threatened by Cisco's move into SDN.
Last month, virtualization vendor VMware acquired SDN pioneer Nicira for $1.3 billion, further emphasizing the growing importance of SDN. Despite this, Chambers believes that SDN will not have an impact on Cisco's networking business for multiple years.
The customer and partner reception to Cisco's Open Network Environment has been positive. Cisco has more than 6,000 Nexus 1000V production customers, a testament to the product's success.
Chambers argued that optimizing for the hardware-and-software combination to drive consistent experience, policy, quality of service, security, and mobility is crucial to meeting total cost of ownership, reliability, and scalability requirements. This, he believes, is one of the three advantages Cisco has when it comes to SDN.
In the UK, product orders fell 13% year-on-year during the quarter. However, Cisco's revenues for the final quarter of its fiscal year were up 4% to $11.7 billion.
Cisco Systems collaborates with EMC Corporation to form the private cloud system provider VCE, a joint venture owned by the three companies. This partnership underscores Cisco's commitment to providing comprehensive solutions in the rapidly evolving tech landscape.
While the landscape of networking is changing, with companies like Oracle acquiring network virtualization vendors, Cisco remains optimistic about its position in the market. The company's long-standing reputation, strong customer base, and strategic partnerships position it well to navigate the challenges and opportunities presented by SDN.
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