Cisco Continues to Transform into a Datacenter Powerhouse

IT is in the midst of an inflection point that is disrupting the very core of the industry, so too is Cisco.  Long the bellwether of the IT industry, Cisco has seen their gross margins decline by almost 4.2% with flat quarterly cash flows of around $2.6 Billion.  As Wall Street struggles with the numbers, the reality is Cisco is once again transforming the company to take advantage and dominate this new IT paradigm.

It is a testament to John Chambers and the leadership at Cisco, that a company of its size could not only identify disruptive patterns within the industry but also change the course of the company to meet these new challenges.  While others within the industry attempt to slow down the speed of innovation with far reaching product announcements and/or vague strategies, Cisco continues to innovate on multiple fronts including partnerships, acquisitions, reference architectures, and products.

On March 30th, Cisco made a slew of product announcements that signaled just how far Cisco’s transformation has come.  The new Nexus 5848UP/5596UP provide customers a “future-proof” solution for their switching architecture as they allow administrators to configure any port to be 1 Gigabit Ethernet, 10 Gigabit Ethernet, Fibre Channel, or Fiber Channel over Ethernet Ports with the added bonus being FabricPath ready.  Additionally, Cisco’s new ultra low latency Nexus 3000 is aimed directly at Arista and Juniper signaling the awaking of Cisco to this growing market.  Finally, Cisco’s new NX-OS brings the idea of a fabric to a reality as it spans both networking and storage with support for Fibre Channel over Ethernet.

In the end, what struck me was Cisco’s ability to execute on their vision of a true unified datacenter fabric.  By introducing three new fabric extender technologies based on the IEEE 802.1Qbh emerging standard, Cisco now has the ability to impact compute (Adapter FEX), server virtualization/hypervisor (VM-FEX), and high density top-of-the rack switches (FEX on the Nexus 7000).  Combine this technology with Cisco’s Data Center Network Management (DCNM) with Virtual Device Context (VDC) and you have a recipe for convergence.

As Cloud computing continues to grow, so too will Cisco’s revenues as they have a full compliment of products to turn dreams into reality.  Whether you want a converged computing platform across servers, storage, network, and security, or simply looking to upgrade your networking infrastructure, then Cisco has real solutions available for you today with an eye toward the future.  In any case, Cisco is transforming into a data center powerhouse that maintains their IT bellwether status for years to come.




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