Cisco: We're Not Going to Miss the SDN Transition

Cisco revenues rise as the company prepares to tackle another market transition.

By Sean Michael Kerner | Posted Nov 14, 2012
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The networking industry is in a period of transition to more of a Software Defined Networking (SDN) approach and it's a transition that Cisco CEO John Chambers isn't going to miss.

Cisco reported first quarter fiscal 2013 earnings late Tuesday that showed continued revenue growth, even though there as a decline in the company's switching business. For the quarter, Cisco reported revenue of $11.9 billion for a 6 percent year-over-year increase. Net Income was reported at $2.1 billion or $0.39 per share for an 18 percent year-over-year gain.

Down spots for Cisco came in terms of switching revenues which declined by 2 percent and collaboration which declined by 8 percent. In terms of rapid growth, wireless revenues grew by 38 percent and Cisco's data center business grew by 61 percent.

SDN

A key trend that could reshape the networking market is the move toward Software Defined Networking (SDN). Chambers said during his company's earnings call that it is his view that it's not just going to be a software or just a hardware world. He sees the need to put software in hardware ASICs as being critical to delivering fast performance.

"So I like our cards, I like how we're positioned and we don't miss market transitions," Chambers said. "You can get give us lot of grief about many things, over the last 20 years, but we will get it right ahead of other people, either cloud or where we're today in the data center, or IP telephony or the role that our business models are going change."

Rob Lloyd, President, Development and Sales at Cisco noted on the call the whole idea of control and data plane separation, which is at the core of SDN, means different things to different people.

"Large scale controllers and agents mean something quite different to a large scale cloud provider or a very large enterprise customer," Lloyd said. "We've had a chance to review our roadmap in this area and our customers love it. They just want us to get there faster, because we have what they're looking for."

Cisco's roadmap for SDN involved a company-wide initiative known as Cisco One. The idea behind Cisco ONE is to enable programmatic access across Cisco infrastructure with a variety of methods and capabilities.

"On the idea of overlay networks, where we actually going to combine the construct of a virtual overlay with our significant footprint in physical networks, it's very clear that this migration that will go on over a decade in traditional data centers, is going to require both," Lloyd said. "I think we will lead in the transition from physical to virtual with what we're doing with our Nexus 1000v and the family of network virtual services."

Cisco is also creating programmability options with its existing IOS networking operating systems.

"When we start to touch the applications that our customers run, we start to touch the experience they can deliver to their clients," Lloyd said.

Sean Michael Kerner is a senior editor at InternetNews.com, the news service of the IT Business Edge Network, the network for technology professionals Follow him on Twitter @TechJournalist.

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