2019 will mark my fourth Cisco Live Europe attendance in a row. A feat for a person like me who’s much estranged to the networking world. As strange as it may seem, Cisco Live Europe seems to one of the rare predictable events at this time of the year besides snow (under my latitude) and taxes (under pretty much all latitudes).
First things first, big thanks to the Tech Field Day crew for having me join them once more for this rather unique event (and to my knowledge, the only regular « Tech Field Day Extra » event taking place in EMEA, much to my chagrin).
What I expect to cover at Cisco Live Europe 2019
This will be my 4th coverage of the event, and until now I covered mainly my topic of predilection which was loosely related to storage and data center compute/storage infrastructure, with a strong focus on Cisco HyperFlex. I’m not saying that I will not cover HyperFlex this year, but my focus has somehow changed. Hyper-converged Infrastructures (HCI) have become commonplace and all share a common function set by now; I may share my opinion on the matter in another post.
Long story short, I’m not excited to know what is the latest hypervisor supported by HyperFlex. What I look forward to hear is what kind of innovation is Cisco investing into: which areas are seen as key for the next few years of R&D, what has been done, what is the direction. Yes, said it in one word, what is Cisco’s strategy.
I hope to see a more decisive push towards software solutions, less emphasis on hardware, more security / threat intelligence solutions, more emerging stuff and definitely less buzzwords – but these are the necessary evil & bane of all major conferences. I also have to confess my eagerness to see how Cisco plans to compete against a threat on the rise: Dell Technologies.
Before we delve forward, a disclaimer: it’s worth bearing in mind that my points of view are very “data center / enterprise IT” centric, so there may be entire business lines that are ignored (MSPs, public consumer infrastructures, the whole “5G” topic, Wireless, etc.) due to my ignorance or lack of interest.
Dell Technologies: a threat on the rise
In the fourth quarter of 2018, I comprehensively shared my thoughts on Dell Technologies after attending their analyst meeting (posted on TECHunplugged.io, our sister site).
In my view, and bearing in mind my data center focus, Dell Technologies presents a serious challenge to Cisco. Dell is present on almost every business segment where Cisco is also operating, with perhaps the notable exception of the Collaboration vertical:
- Converged Infrastructure
- Network Hardware (Core, Data Center, and Access/Campus switches)
- Software Defined Networking (Cisco ACI vs. VMware NSX)
- SD-WAN (Cisco / Meraki vs NSX SD-WAN / Velocloud)
- Management & Security Software – a rising category for both vendors (either via direct products, acquisitions or investments in startups “on the shopping list”)
This competition could be ignored in the past times when Dell on one side, and the EMC Federation (EMC, VMware, Pivotal, RSA) on the other side were separate entities. But the Dell-EMC merger was a sign of things to come. Even after the merger, Cisco has been until recently relatively safe from harm considering Dell Technologies weaknesses (another topic which I covered in my thoughts on Dell Technologies). This was due to a lack of coherence and an inability to execute in a coordinated fashion from Dell Technologies, but this will change, and is in fact in the process of happening as we speak, even if at a slow pace.
Executing Order 66
The reality of 2019 is that Dell Technologies is not only capable of competing with Cisco on all of these areas: it can purely and simply eliminate Cisco from the equation by internally sourcing all elements of the data center stack, from hardware to software including networking layers, both physical and virtual, and by adding elements that Cisco cannot provide on its own (storage solutions + data protection).
What started with buying back Cisco’s share from VCE (or at least leaving Cisco with 10% shares) is expected to continue with a rip & replace approach – I wasn’t able to find a clear statement about whether Cisco still owns any stake of ownership in VCE, but my understanding is that VCE was absorbed into Dell Technologies during the Dell EMC merger. Even if Converged Infrastructure VxBlock systems are still provided with Cisco networking and Cisco UCS compute, the days seem to be counted.
But does it matter? While a partnership termination usually looks bad, I don’t foresee an eventual eviction from the VxBlock stack as a major revenue loss for Cisco: these are usually low volume sales, and Cisco has had a very successful partnership with NetApp (FlexPod) for years now, which can be further leveraged as a competitive offering to the VxBlock.
Also, while Dell Technologies presents the biggest threat from a data center perspective (because of the completeness of their offering), there are other vendors around also looking to get their piece of the pie. There is a sizeable share of Cisco products that can qualify for commodity hardware, so Cisco needs to find a way out to extract themselves from this situation. I’m tempted to say that the path to redemption will not be more hardware sales.
Does Cisco lacks a VMware-type disruptor?
Without turning this Cisco Live post into a “Dell / VMware post”, I like the disruptor role that VMware plays within Dell Technologies. I’m not well acquainted with Cisco’s “Command & Control” structure, or the way their business units work together, but perhaps the absence of a “VMware-like entity / skunkworks project” is more felt.
To networking folks, perhaps Meraki is that kind of wildcard in the Cisco nebula. Is it really? And does it innovates at the same scale / with the same impact as VMware?
Cisco and the cloud
Another interesting part to hear about is Cisco’s cloud story. Apparently, Cisco now has a Kubernetes offering (comment: it seems that having a Kubernetes offering is the mark of being “cool” in 2018-2019, since every conference I’ve attended had a Kubernetes service: NetApp, VMware, etc. etc.), but also integrations with AWS and Azure in a hybrid cloud offering. To be fair, my last exposure to Cisco as a cloud provider dates from the 2012-2014 period, roughly, so I may have missed a lot of news.
I’m often perplexed at specialized / dedicated clouds, as I fail to see their intrinsic value for the customers, especially when the major public cloud providers already have a fairly comprehensive set of services available. This calls for a discussion with the Cisco Cloud people eventually.
Is Dell Technologies a real threat for Cisco, or am I being misguided? And is it even relevant to talk about Dell Technologies as a threat to Cisco? Perhaps the biggest threat comes from within, i.e. the channel & sales reliance on hardware sales & support contracts as a steady flow of cash but lower margins, at the detriment of more innovation and more returns per dollar invested? With hardware now a commodity, isn’t it time to move more and more features up on the software stack?
Industry observers are often disappointed by large companies, as their critical mass makes them more prone to inertia and dilutes the visibility of their relevant innovations in a sea of average products and corpspeak announcements. Some companies need to be faced with a critical point of no return before starting reinventing themselves. It has been the case for NetApp, which was on the brink of disappearing or being gobbled up, before successfully executing a radical transformation.
While Cisco may be far away from NetApp’s situation, there are good lessons to be learned from NetApp’s transformation. I hope to find a Cisco that is innovating more, that is putting emphasis on emerging technologies, that has a vision, a goal and a strategy to make it happen.
This post is a part of my TFD Extra at Cisco Live Europe 2019 post series. I am invited to the event by Gestalt IT. Gestalt IT will cover expenses related to the events travel, accommodation and food during the event duration. I will not receive any compensation for participation in this event, and I am also not obliged to blog or produce any kind of content. Any tweets, blog articles or any other form of content I may produce are the exclusive product of my interest in technology and my will to share information with my peers. I will commit to share only my own point of view and analysis of the products and technologies I will be seeing/listening about during this event.