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5/20/2014
12:00 AM
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Cisco's 3 Commandments

At Cisco Live, CEO John Chambers pledged to lead customers to the promised land -- if they follow a few commandments.

Cisco CEO John Chambers descended from the mountain on Monday to play the role of Moses, promising to guide the company’s customers across a vast and forbidding desert of SDN, cloud, and IoT FUD.

Chambers’ destination is the promised land of reduced IT costs, streamlined and scalable operations, and new business value for IT, with networking at the core of it all.

But as with the biblical Moses, Chambers made it clear that anyone who wished to reach the promised land would have to follow certain commandments.

While these commandments weren’t inscribed on tablets (either stone or touchscreen), here are three that jumped out at me from his keynote at Cisco Live US. (Chambers' presentation starts around the 53-minute mark.)

Commandment 1: Though Shalt Move Faster

Change can be scary and disruptive. Chambers came out swinging with this theme, describing the unrelenting acceleration of technology and the dire consequences for those who can’t keep up.

“This pace of change is now moving at an exponential rate,” he said. “You’ve seen how fast it’s moving on so many different fronts. You’re going to have to be fast on both innovation but very fast in terms of IT.”

He touted Cisco’s own ability to keep up. In regard to software he said “we used to think we were really cool to bring out a new release every year. We’re talking about new releases, especially in collaboration, every day.”

This message aims to reassure Cisco customers that the company is tackling the new, transformational forces affecting networking. Cisco has to spread this message in part because VMware’s NSX stole a march in the SDN race by announcing its technology and shipping product months ahead of Cisco.

Cisco’s lag won’t be fatal; the vast majority of enterprise customers are still wrapping their minds around SDN, and are willing to wait for Cisco to ship something they can play with in a lab. However, it did put Cisco back on its heels, and some early adopters may have slipped through the company’s fingers.

Commandment #2: Thou Shalt Pick A Winner

“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,” said Chambers. He also declared that only 24% of the companies on the Fortune 500 from twenty-five years ago are still on that list today.

He looked at the bodies that have been left in Cisco’s wake, including more than fifty networking companies that aren’t around anymore. He reviewed past victories, including over Nortel, Alcatel-Lucent, and Ericsson in the telephony market.

“When we entered the telephony area, they said we couldn’t spell ‘telephony.’ But we knew how to get 65% market share,” crowed Chambers.

That wasn’t all. “Remember worries about Huawei and Avaya and Juniper: they were going to eat our lunch,” he said. “Nobody eats our lunch.”

The message to customers was clear: You need to choose carefully the partners that will guide you through the next transformation of the IT industry. See how far we’ve come? Do you really want to change now?

I think this sentiment will resonate with a signficant percentage of Cisco customers, even in the face of new and compelling options from competitors. These customers have a long relationship with the networking giant, and besides the capital costs they’ve already sunk into Cisco, many have invested additional time and money in Cisco-centric training and certifications for their network administrators and engineers.

Commandment #3: Thou Shalt Be A Technology Company First

As you’d expect from a IT vendor, Chambers touted the primacy of technology in the way a business is run, saying “Every company and every city and every country, you’re beginning to see the thoughtful leaders say ‘We’re going to become a technology company first, a retail company second. A technology company first, a bank second.’”

That kind of line plays great at a place like Cisco Live—bold words for a discipline that can often feel sidelined or even maligned within a business.

But honestly, it’s a bit of a reach. A bank should be a bank first. Any CEO that laid out a bold plan to put technology ahead of banking would be immediately strapped into a golden parachute and booted off the roof.

Yes, technology is essential. Business units and end users should have the tools they need when they need them. But no bank or retail store or manufacturer is in the business of SDN or IoT or any other technology trend. Technology has to serve, and like a good servant it should be pervasive, responsive, available, and, for all intents and purposes, invisible.

While Chambers does a good job playing the role of Moses, Cisco customers aren’t blind followers. As Greg Ferro noted in a recent article, Cisco Live is a “make or break” event for the networking giant. The company faces significant competitive and market pressure on a variety of fronts, and it’s likely that many customers will peel away to competitors, be it another traditional network vendor, or VMware, or white-box upstarts.

That said, Cisco customers will calculate risks and rewards and weigh the known against the unknown. My guess is that more often than not, such calculations will come up in Cisco’s favor.

Drew is formerly editor of Network Computing and currently director of content and community for Interop. View Full Bio
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Drew Conry-Murray
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Drew Conry-Murray,
User Rank: Ninja
5/21/2014 | 3:19:27 PM
Re: Speed and Consolidation
Chambers is right that IT is under intense pressure to be more responsive. One reason is that there are now technology options available outside of IT (think Salesforce or Dropbox). Another is that server virtualization suddenly made it much simpler to provision and scale compute resources, but business apps don't just run on servers. They also need storage, a network connection, security controls, etc. Most of that stuff has yet to catch up. Organizations can see the potential of more automated IT systems, and they're champing at the bit to get it to happen.
athorndike
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athorndike,
User Rank: Moderator
5/20/2014 | 8:53:29 PM
Speed and Consolidation
Great takeaways Drew. It will be interesting to watch the consolidation. The increasing pace for IT in terms of innovation and delivery is worrisome - it's already breakneck, isn't it?
MadelineUBMTech
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MadelineUBMTech,
User Rank: Apprentice
5/20/2014 | 6:57:54 PM
Moses' long-term Cisco chambers
It is interesting that in a such a fast-paced time with an admitted emphasis on change, John Chambers has remained at the helm for almost 20 years. I really enjoyed your take on the commandements; I wonder how these have evolved in the last two decades.
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