Cisco's Chambers predicts IT shakeout as new products launched


"If you look at the top companies in the industry, most of them will not exist in a meaningful way in 10 years ... You're going to see a brutal, brutal consolidation of the IT industry where out of the top five players, only two or three of us will be meaningful in as quick as five years" states John Chambers at his Cisco Live (CSCO) conference keynote.

Chambers notes two fellow IT giants, IBM and H-P, have seen negative revenue growth in a majority of their quarters since 2011; Cisco, of course, has had its own top-line issues as of late. He predicts smaller vendors (e.g. Juniper, F5, Riverbed) will get squeezed between Cisco (naturally) and the white-label OEMs (beloved by Web/cloud firms) he considers company's biggest threat.

The remarks come as Cisco shows off new personal videoconferencing systems - the DX70 and DX80 - that go for $1K-$2K apiece, as well as new services and partners for its InterCloud platform, which aims to enable interconnected cloud services from dozens of service provider partners (rather than Cisco itself).

Cisco has promised to invest $1B over the next two years in InterCloud, as it tries to make up lost time in a market featuring aggressive pricing and a long list of rivals that include Amazon, Microsoft, and IBM. New partners include NetApp and Accenture.

The DX70/80 have won praise for their sleek, minimalist hardware (shades of Apple) and streamlined UI, but critics also scoff at their premium pricing. Videoconferencing weakness led Cisco's collaboration revenue to fall 12% Y/Y in FQ3; orders (boosted by WebEx) grew 4%.

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Comments (4)
  • Shaduc
    , contributor
    Comments (2952) | Send Message
     
    Shakeout of Cisco marginalised presence ...

     

    Thanks Chambers!
    20 May 2014, 07:24 PM Reply Like
  • HuhWhat
    , contributor
    Comments (39) | Send Message
     
    I can buy a MacBook Air that has high quality videoconferencing hardware for $1000 and have open choice of GoToMeeting, Skype etc for software. That is where the the bulk of the market will be.

     

    I can see a niche market for lazy executives who aren't able to / won't use a computer and videoconference at the same time. A small, premium market doesn't seem to justify the product.

     

    InterCloud has major competitors in the model who are much further ahead & first movers - OnApp is one.

     

    In terms of long survival, Cisco doesn't look better positioned. They all have cash cows at the core of their business e.g. HP has printers, IBM has mainframes, Cisco has routing/switching that can sustain them in the short term. Cisco look amore like a one trick pony in this context.
    21 May 2014, 02:54 AM Reply Like
  • rroo
    , contributor
    Comments (210) | Send Message
     
    Routing and switching can be raised to a new level.... like cloud.
    21 May 2014, 04:26 PM Reply Like
  • mngordoatyahoo
    , contributor
    Comments (110) | Send Message
     
    It's ironic that John Chambers, founder and CEO of Cisco, consistently opens his mouth and with his words, insures that CSCO's stock price goes nowhere. The irony comes when he opens his mouth to announce his departure. The Street will go crazy when he leaves, possibly doubling or tripling the stock price in celebration of his departure. New leaders will likely take the company to new and innovative heights, further enhancing the stock price.
    And who will be the prime beneficiary of Mr. Chambers' departure? Why, that'd be Mr. Chambers himself. Bet we'll see him crying all the way to the bank.
    21 May 2014, 05:10 PM Reply Like
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