Last week Cisco published a memo from Chambers, in which the CEO promised that Cisco would make some radical changes to get back to its core networking roots. Today the company steamed ahead with those promises, announcing that it was pulling back from many consumer-focused businesses, including its HD video camera, the Flip. Just two year ago Cisco bought Flip camera manufacturer Pure Digital Technologies for $600 million. The move was part of a broader initiative by Cisco to expand its consumer business, but the company also claimed that the Flip had value as an enterprise tool, too.
The death of the Flip is part of first round of restructuring at Cisco, wherein the company is pulling back from its direct approach to consumer sales. Chambers announced to Wall Street today that the company will continue to serve consumers, but only indirectly through its enterprise business. In other words, it will help its enterprise and service provider customers sell products and services to consumers. This move includes 550 layoffs. The company will also refocus its consumer-oriented Home Networking division away from Linksys routers and more toward supporting video. We’ll see how that plays out.
Network engineers frustrated by Cisco’s perceived lack of focus have enjoyed dinging Cisco over the Flip acquisition as a market adjacency move that just didn’t make sense. Well, they won’t have the Flip to kick around anymore. But there’s always the Cius!]]>
Enterasys has launched a new family of modular campus edge switches with its home-grown, application-smart ASIC, the CoreFlow2. These K Series switches complement the company’s stackable switch products, which are built with merchant silicon rather than custom ASICs.
Enterasys’s CoreFlow2 ASICs are able to identify the types of applications individual users are running on the network. The chip can then apply QoS, security and other network settings to the application traffic based on policies set by the networking team.
“In a stackable switch product I can apply policy on each user that happens to be connected to my switch,” said Karl Pieper, product manager for Enterasys. “With CoreFlow2, I can apply a separate policy to every session that a user is doing. I can apply policy to an email session, to web browsing, to anything they are doing.”
Before rolling out the K Series, Enterasys’s CoreFlow2 ASIC only shipped with its S Series of data center-class modular switches. With the K Series, Enterasys is trying to offer customers a cheaper modular switch with its customer application intelligence.
Enterasys is initially offering two models of K Series, the K10 (a 10-slot chassis supporting up to 216 Gigabit Ethernet ports and 8 10 Gigabit Ethernet uplinks) and the K6 (6 slots, 144 Gigabit Ethernet ports and four 10 Gigabit uplinks). The K Series list at $26,685 and will start shipping in June.]]>
The memo was long on strategy and vision and short on specifics. I have no doubt the specifics will make headlines very soon. Chambers warned employees that Cisco will “take some bold steps” and “make tough decisions.” It’s hard to say what that means. Will he sell off or shutter certain businesses that aren’t performing? Will Cisco buy more companies to fix gaps in its product portfolio or replace disappointing products?
I’m not a Cisco customer. I’m just a journalist who talks to a lot of Cisco customers, analysts and Cisco employees. All I can offer are impressions I’ve received from those conversations. I will say this: Cisco is good at talking to CIOs, but it’s stumbled recently in how it talks to networking professionals. And networking professionals are Cisco’s core customers. Cisco has done a good job of presenting architecture to CIOs. Borderless Networks really appeals to CIOs, for instance. But routing and switching needs to be sold to network engineers and network architects. I don’t think that audience is liking the messages it is receiving right now. Usually those messages just lead to more questions.
Just the other day Cisco rolled out a huge slate of data center hardware and software products centered mostly on its Nexus switching line and its Unified Computing System servers. Lots of interesting boxes, like the Nexus 3000. Lots of interesting software and services upgrades, like multihop FCoE support. But overall, there was just too much in the presentation. Too many products at once.
I usually budget 30-45 minutes to talk to a vendor about a product rollout. And most vendors will present me with two or three major hardware or software elements in their news. The presentations are focused. With Cisco, there are 15, 20, 25 different elements. Some of them are completely unrelated to each other. Some products, like the ASA Services Module for the Catalyst 6500, get a single bullet point on a slide. Why can’t that product merit its own press release and briefing? I’d sit down to hear more about it.
When Chambers talks about discipline and focus, this is what I think about. I know that Cisco’s marketing and PR team, which features an army of extremely talented and passionate people, would love to give these smaller products more time – rather than slapping them onto the end of a larger announcement.
I can’t help but think that the same culture that is forcing little ace products to be lost in the shuffle with larger architectural announcements like data center transformation and Borderless Networks is also a problem in the product development and engineering side of the business. And that’s what has many long-time Cisco customers frustrated and worried. That’s why they keep picking on Cisco for buying companies like Pure Digital Technologies, the maker of the Flip camera. Cisco can hand those Flip cameras to VARs at its partner summit and tell them that it’s a good business tool. Maybe Cisco is right about that, but should Cisco really be making the Flip? Network engineers say no.
I’m excited to see what kinds of changes Cisco makes in the coming months. Despite all the doom and gloom, the company is still a leader in most of its markets. It’s still innovating. It still has loyal customers. This is about Cisco staying in that position, not about getting back into that position. To execute on that, Cisco needs to keep talking to the guys who push packets.]]>