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11/25/2013
09:06 AM
Art Wittmann
Art Wittmann
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Cisco's Chambers Pivots, Avoids Reality

Customers in the Open Networking Foundation beg to differ with the Cisco CEO's assertion that advanced networking "can't be done in software."

If you haven't read Rob Preston's interview with John Chambers, I highly recommend it to you. But before you read it, consider a few words from someone who has "interviewed" the Cisco CEO several times over the course of 15 years or so.

First, let me note that my last interview of Chambers was six or seven years ago. A small group of us from InformationWeek had been summoned to an audience. After the usual pleasantries, we got down to it. We'd ask a question, and Chambers would say a few words on the subject -- literally about five -- and then pivot into a 10-minute discussion of something completely unrelated. We'd ask another question, which was again greeted with a quick pivot into another long monolog on some other topic. This went on for about 45 minutes.

I came away scratching my head, at a loss for what to write. Chambers has always been a CEO who's "on message," but this was something new. Ask about Fast Ethernet, get an answer about routing evolution. Strange.

A few weeks after that interview, I was sitting at an event where Chambers was the featured speaker. The speech he gave was the series of monologs he had delivered to us. He'd had no interest in answering our questions; what he needed was a test audience for this address. It all finally made sense.

[ Will network managers bet their futures on emerging open-source, software-defined networking? See: Cisco Asks the Killer SDN Question.]

Chambers is something of an exception among the mover-and-shaker IT vendor CEOs, especially among the ones who've lasted more than a decade. He's a sales guy who rose through the ranks. A former IBM and then Wang salesman, Chambers joined Cisco in 1991 as senior VP of worldwide sales and rose to the CEO job in 1995. In an industry where founders and sometimes product strategists have headed many of the biggest companies (Gates, Ellison, Plattner, McNealy, Page/Brin, Bezos, Benioff), Chambers' pedigree is different. He's polished and rehearsed, much more than those founder CEOs ever thought they had to be.

Bill Gates would listen to your question, and in his geeky way would stall for a bit of time before answering with a sheepish grin and a long "well..." as he formulated his answer. Sun co-founder Scott McNealy, a hockey player at heart, would get heated over certain questions even as he dropped soundbites into his responses. I interviewed Eric Schmidt in his early days at Sun and got a few raised-voice answers. A more introspective Schmidt at Novell took his time and gave real answers.

Chambers: An exception among the mover-and-shaker IT vendor CEOs
Chambers: An exception among the mover-and-shaker IT vendor CEOs

Chambers isn't that way. Like a junior politician, he's anticipated every question you might have. His mind is lightning quick, and his answers take no thought time. He talks fast, and the faster he talks, the more anticipated the question was. If you push things, his normally cheery disposition breaks just long enough to tell you to drop it -- he's answered your question.

What you're left with is an exercise in squaring what he says with the reality you know. That's always what you do with salesmen and politicians. Chambers' challenge is that he must constantly speak to two audiences. He has to address his customers, who want reliability, performance, affordability, and interoperability; and investors, who worry about commoditized hardware gutting Cisco's stellar profit margins. Promise too much to the investors, and his sales team will get bombarded with hard questions. Too much for the customers and Cisco's stock will take a spanking.

Chambers told Preston: "There will be a battle... in terms of people pushing the white label approach or people who push an SDN overlay... We have 25,000 software engineers. If this could be done in software we would have already done it."

There's a lot to unpack there. First, I can't tell if he's purposefully using the word overlay as room to wiggle, or if he's just saying that SDN on generic hardware is a nonstarter. Probably both. Second, the Open Networking Foundation was started by Deutsche Telekom, Facebook, Google, Microsoft, Verizon, and Yahoo. They obviously think SDN on generic hardware can be done, but if it were left to the usual efforts of the vendors, they'd get just one more anemic standard that indeed couldn't get the job done.

If Google can make its own networking hardware, as Preston noted in the interview, chances are a whitebox approach will work for anyone -- provided the standards are there and adhered to and the right software companies emerge. For a man who constantly says that Cisco's main job is to listen to its customers, he sure isn't listening to this group.

Preston went on to ask about the virtualization effect that has commoditized servers and is beginning to do the same to storage. Chambers' answer: "... storage and servers ... were underutilized." So the reason you can't virtualize networking is that it's too heavily used. If you turn the clock back, you'd have heard the same thing about mainframes. I heard the same reasoning from minicomputer vendors, and then from proprietary Unix vendors: The hardware and software had to come from the same company, they said. Linux and Windows were just too unreliable and you could never run them at peak performance.

Of course, that's true when you've overpaid for the hardware-software combination. Customers must get every ounce of use out of their purchase; they shot their budget on it.

We now live in a scale-out world, and the ONF is trying to bring forth the standards that'll make it happen for networking in an open and economical way. Chips from Broadcom (and others) and software from players yet to be determined will be the norm, just as chips from Intel (and others) and software from VMware and Microsoft are now the norm for servers.

It's true that Cisco's 25,000 software engineers probably couldn't make a workable SDN system a decade ago. But a decade from now we'll think of the proprietary networking days as quaint. The question isn't if, but when. Cisco's customers know it and its investors know it.

The question for Cisco is: Would it prefer to be a dead hardware company (like DEC and Wang and a dozen others) or a thriving software and services company (like IBM)? Chambers watchers will wait for the big pivot.

Battle lines are forming behind hardware-centric and virtual approaches to software-defined networking. We size up strengths and weaknesses. Also in the SDN Skirmish issue of InformationWeek: Anonymity has a role in business communities. (Free registration required.)

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cbabcock
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cbabcock,
User Rank: Strategist
11/25/2013 | 10:17:57 PM
What's Insieme up to?
Chambers committed his company to move into UCS servers sporting converged infrastructure at a time when it was highly unpopular with partners, such as HP and IBM, to do so. No one seemed to think he would succeed at the time. The software defined network is a more disruptive challenge to Cisco. Isn't it possi8ble it's fomenting an evolutionary path away from hardware through its internal startup, Insieme?
ArtWittmann
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ArtWittmann,
User Rank: Apprentice
11/25/2013 | 3:11:51 PM
Re: Commodity Hardware
I agree with you - that's the way it has been.  I'm just in the midst of writing a story based on our private cloud survey - the last of which was done 20 months ago.  We asked about key vendors then and asked the same question now.  All of the software vendors (VMware, Microsoft, Citrix, OpenStack, even Oracle) were cited more frequently as key vendors, and the hardware vendors were cited less frequently.


I think there's a sea change at hand, and it's becoming no longer the case that choice of hardware is critical. My guess is that viewing hardware as such a key choice is a vestige of scale up thinking in a scale out world.
Mr. Gigabob
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Mr. Gigabob,
User Rank: Strategist
11/25/2013 | 2:42:37 PM
Re: The "Other" CEO Salesman
Bud Tribble coined "RDF" to describe Jobs charisma and effect on Macintosh developers.  Based on end results it is clear Jobs was in the reality creation business.  John Chambers is not.  He follows the Frank Underwood model from House of Cards, describing what is good for Cisco and seeking to manipulate via positioning instead of  visulizing a new reality and assembling the tools to create it.
melgross
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melgross,
User Rank: Ninja
11/25/2013 | 2:30:10 PM
Re: It's not the volume ...
Cisco has owned this market from the beginning. The problem for them is that they're beginning to lose it.
melgross
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melgross,
User Rank: Ninja
11/25/2013 | 2:29:05 PM
Re: The "Other" CEO Salesman
I read a much better description of jobs' shield. The writer described it as a "reality creation field." And that is a much better description. He didn't distort reality, he created it.
rjurado915
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rjurado915,
User Rank: Apprentice
11/25/2013 | 2:11:12 PM
Commodity Hardware
Commodity hardware is the idea that the switch hardware you buy in the future won't really matter because it will all be OpenFlow enabled and work like a charm with your OpenFlow controller.  So you can buy up cheap hardware from whitebox vendors and save a ton of money.  And it might be the future if it wasn't for one fatal flaw.  The fact is that the vast majority of datacenter TCO is from OpEx.  So while you might save a good amount of on the initial purchase good luck trying to support it.  Do most enterprises buy white box servers or build their own servers?  No.  And the reason is that even though Windows and Linux can run on practically any hardware, people tend to choose one server manufacturer (HP/Dell/IBM/Cisco) and stick with it as much as possible.  Why?  Because different hardware means different support contracts, different model numbers, different chipsets and different management systems.  

Just because OpenFlow can interface with any OpenFlow switch doesn't mean we can drop years of good sense and buy a switch from a new manufacturer every day of the week.  Because in the end that hardware still needs support and still needs to work within a system that is years from being defined.  And the more variety in hardware you support the more complex the system becomes.  So maybe you upgrade your OpenFlow controller and it stops working with the switches from WhiteBoxCompany#1.  Or maybe you apply a switch firmware and then the switches from WhiteBoxCompany#2 suddenly aren't fowarding as expected.  Who do you call?  Is it a problem with your OpenFlow Controller or your commodity switch?  What if they start pointing fingers?  Good luck with that!
Mr. Gigabob
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Mr. Gigabob,
User Rank: Strategist
11/25/2013 | 12:27:43 PM
The "Other" CEO Salesman
You cite CEO's up from the technical, development or strategy ranks - but avoid the "other" CEO salesman - Steve Jobs.  Chambers may have trouble "squaring" reality.  Jobs instead deployed the first ever "Reality Distrotion Field".  I see a theme with Sales People / Pols turned Business Leaders.  For details see Netflix "House of Cards".  So many parallels - including the well used tactic of trying to deny innovative threats - then leaping on the bandwagon and trying to overwhelm them with alternatives when your position is compromised.
danielcawrey
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danielcawrey,
User Rank: Ninja
11/25/2013 | 12:24:19 PM
Re: It's not the volume ...
I agree with Lorna. When I first read that, I thought about the things that Apple did in its early years with limited resources. Can you imagine what you could do with 25,000 of those early engineers?

If thought about in this way, Cisco would have already reinvented networking with software. But instead they have capitulated. 
Susan Fogarty
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Susan Fogarty,
User Rank: Author
11/25/2013 | 10:42:20 AM
Re: It's not the volume ...
Not only is Chambers trying to please customers and shareholders at the same time, he is leading a hardware company that is trying to own a market that is becoming "software-defined." I think that is the biggest challenge. No matter how you slice it, that equates to quite a bit of double-speak.
RobPreston
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RobPreston,
User Rank: Author
11/25/2013 | 10:14:07 AM
Re: It's not the volume ...
The author boils down Cisco's challenge when he writes that Chambers must constantly speak to two audiences: customers who demand reliability, performance, affordability, and interoperability, and investors who demand fat profit margins. Other tech vendor CEOs must balance those two sets of constituents, of course, but it seems that Chambers has to do it more than most. Financial markets move based on what Chambers says. 
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