John Chambers (CSCO): "We do everything in wireless except for the radio ... Now, we have a creative idea there, and I’ve just funded our first startup to see if that works ... The market is ripe for a new player."
Chambers won't name the startup, but his remarks suggest Cisco plans to directly take on Ericsson (ERIC), Nokia (NOK), and Alcatel-Lucent (ALU) in the giant mobile base station market. Cisco recently bought small cell base station vendor Ubiquisys, and also sells switches/routers and management software to mobile carriers, but until now has argued the core base station market is too commoditized.
Separately, Chambers predicts "IT as a service and white label will be [Cisco's] biggest competitors three to five years out." That's a reference to cloud infrastructure providers (none larger than Amazon), who often rely on cheap white-label switches, as well as the use of similar hardware from Web giants such as Facebook and Google.
Chambers also: 1) Insists Cisco's storage alliances with the likes of EMC and NetApp (NTAP) will stay in place, in spite of the Whiptail deal. 2) Predicts Cisco's upcoming Insieme switches will help it compete against private Arista. Arista, whose high-density switches use 3rd-party silicon (unlike Cisco's), could do a huge IPO next year. 3) Questions the scalability of the software-defined networking platform offered by VMware's (VMW) Nicira unit (generally seen as a threat), and claims Nicira has less than $10M worth of deployments. Of course, the value of the switches managed by Nicira's products could be much larger.
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