the famous American science and technology media business insider’s staff writer Julie potter (Julie Bort) recently published stories revealed about the motivations behind of the cisco transition decisions and ultimately failed $1 billion contract with amazon. At the same time, the article also addresses the cisco is released on November 6 “heavyweight” products.
below is the article main content:
last month, well-known Internet solutions provider cisco has released the wind says, the company will be on November 6th by secret formed last year Insieme Networks startups launch a “enough to change the rules of the game” heavyweight products. But many people don’t know is that the cisco product final release it with the company at the last moment between the breakdown with amazon deal with as much as $1 billion devices use the contract.
the analysis thinks, hope that through the cisco Insieme Networks brand software definition of emerging network (software defined networking, hereinafter referred to as the SDN) technology gives his response. Innovation SDN is a new kind of network architecture, its core technology OpenFlow by network equipment control plane and data plane separation, so as to realize the flexible control of the network traffic, as the core network and application innovation provides a good platform.
however, the rise of the technology is not a good news for cisco, to a large extent because of the change the way the company to form a network. Is simply, this technology makes originally only on high-end enterprise routers, switches, some service transferred to the software level, while the software can run on some cheap hardware platform. So, after the technology gradually popular, enterprise demand for high-end routers and switches will be drastically reduced, and start-up companies based on the technology of SDN is like a spring up in recent years.
in a strict sense, Insieme Networks is not a subsidiary of cisco, but a complete start-up that is obtained from the cisco’s $100 million investment. If the company performs well, cisco also can choose for $750 million will be a full takeover.
however, the reality is, Insieme Networks has become a subsidiary of cisco. For two reasons: first, considering the Insieme Networks on November 6th important strategic significance of the upcoming new product, the product of the conference will be made by cisco CEO John Chambers (John Chambers), rather than Insieme Networks CEO chair. Second, Insieme Networks at present mainly by including Mario horse zola (Mario Mazzola), the premium – jean (Prem Jain) and Luca – card filo (Luca Cafiero) these star cisco engineers, leadership, and they had successfully developed many of the company’s excellent product storage and servers.
according to market Research company Synergy Research Group, according to the given cisco has traditional routers, switches, with a 70% share of the market. But according to informed sources, cisco senior internal to the company to the transformation of the next generation of routers, switches, platform and don’t have enough confidence.
technology blog mobiles founder Om – Malik (Om Malik) in Insieme Networks to start at the beginning of the once wrote, “is from the traditional routers, switches, markets for the huge profits of cisco’s time should consider the next generation platform. But at the same time as a veteran enterprise, cisco and obviously don’t want to usher in the shift.”
a few days ago, a person familiar with the cisco internal processes of personnel to the media analyzed why the company decided to make a change. First, cisco has very close between under the amazon an amount up to $1 billion in equipment procurement contract. However, the two sides eventually purchasing amount is only $11 million, largely because amazon decided to use cheaper hardware with SDN technology to meet their business requirements.
second, Chambers once at a high-level meeting to the company’s other executives to ask “what if cisco SDN market?” Finally the result of the discussion is, cisco SDN market can make existing hardware business scale down from $43 billion to $22 billion. This means that if to surrender is cisco artery in cut their earnings. And at the same time, Chambers also worry that Wall Street investors will lose faith in cisco at any time.
last month, Credit Suisse First Boston bank, Credit Suisse First Boston) is published a 121 – page analysis report. According to the report, the rise of SDN technology will be a serious threat to cisco’s earnings artery, the company in the industry transformation in a very passive position.
this, cisco, although not to yourself with amazon between huge deal fell through comment, but the CTO dmanisi Lyle tin – China (Padmasree Warrior) had said in April last year, network software technology will become a part of an integral business, and is likely to bring $670 million in revenue for cisco.
analysis of the personage inside course of study thinks, Insieme Networks to be released next week is likely to be a need to use products with cisco’s expensive hardware collocation, cisco hope that through this approach to persuade consumers continue to buy their products, rather than use cheap hardware and SDN technology to replace his position.
source: tencent technology