Cisco began “limited restructuring” this week by laying off approximately 500 employees globally, including two of the four -person team manning the Cisco/EMC alliance, a source tells us.
Ties between Cisco and EMC had been visibly strained since VMware — a company owned by EMC — acquired network virtualization provider, Nicira Networks Inc. last summer. While Cisco had historically been an ally with VMware and EMC, EMC/VMware’s acquisition of Nicira’s network virtualization left a bad taste in Cisco’s mouth.
Another indication of the souring relationship between Cisco and EMC this week is a rumor that EMC will start selling its own white labeled servers, putting it into another field of competition with Cisco — a rumor unconfirmed by Cisco.
While Cisco’s actions this week may point to a souring Cisco/EMC relationship, it could also indicate Cisco’s ongoing shift toward focusing on software and cloud initiatives. As demand increases for software-defined networking (SDN) and network virtualization solutions, Cisco could feel pressure on its traditionally robust hardware profit margins — an industry trend that is apparently on the minds of Cisco execs as the company works to realign operations.
“We routinely review our business to determine where we need to align investments based on growth opportunities…These actions are subject to local legal requirements, including consultation, where required,” said Cisco spokesperson Robyn Jenkins Blum, Cisco Corporate Public Relations in an email response.
Alcatel-Lucent recently put up its patent portfolio as collateral for a credit line from Goldman-Sachs and Credit Suisse, and this arrangement has the French government nervous. The government may urge the company to sell off business units instead, including its enterprise division.
According to a report in the French business publication Les Echos, the government is discouraging Alcatel-Lucent (ALU) from using the 1.6 billion euro credit line. The government fears that ALU could default on its loans and let its patents fall into the hands of foreign banks. The credit line would stabilize ALU while it tries to reduce costs following consecutive quarters of heavy losses. The French government prefers that ALU find alternatives to putting its patents up as collateral. My French is rusty, but my reading of Les Echos reveals that the government is pushing ALU to sell off a valuable business unit to raise cash, including the enterprise business or its submarine communications business. The government is also exploring a patent consortium, which would allow ALU to share its patent portfolio with other companies and derive revenue from them.
ALU has put its enterprise business up for sale a couple times in recent years, so this news is not great shock. But some customers must be frustrated by the continued instability of the company. ALU has a lot of debt, negative cash flow and dwindling cash reserves. Seeking Alpha says the credit line is unlikely to turn around the company’s fortunes.
Everyone has heard of bringing your own device to the workplace, or the BYOD trend. While many networking products have been ramped up over the past several year to accommodate more devices entering the enterprise network, the next-generation trend has entered the arena and attention must be paid.
Bring-your-own-application, or the “BYOA” trend is demanding a wireless LAN prepared to handle not just new devices, but the slew of new applications being brought into the workplace. Aruba Networks has recently announced a new wireless LAN platform with Aruba’s AppRF technology — a series of three mobility controllers, the 7210, 7220 and 7240 — aimed at addressing the onslaught of mobile applications and devices coming onto the enterprise network.
“Our customers were coming to us and saying, ‘we have a problem not being able to control the applications running on our employee’s mobile devices on our network — We don’t want to block them, we just want to know what the biggest bandwidth consumers of Wi-Fi are,’” said Ozer Dondurmacioglu, Aruba’s director of product and solutions during a briefing.
And while IT has been able to manage WAN bandwidth consumption, Wi-Fi bandwidth has been a different story.
“For Wi-Fi, everything changes as devices move around, and we wanted to help with capabilities to show [IT] what is going on in the air,” he said.
Enterprises will be able to eliminate desktop phones, IP PBX support, expensive video and audio equipment and dedicated videoconferencing systems thanks to the new platform, which can guarantee high quality and performance for popular voice, video and Unified Communications (UC) applications, like Microsoft Lync, Dondurmacioglu said.
“The new normal is users love their mobile devices — they wouldn’t want to use anything else, even if IT begs them,” Dondurmacioglu said. “This year is going to be a battle between how to manage mobile apps over the air, and how to manage what is most important to an organization is protected given the limited Wi-Fi bandwidth.”
In Brocade’s latest quarterly earnings call with Wall Street analysts, executives revealed that its VCS data center fabric and VDX switches are winning new customers and expanding their footprint in existing accounts. Also, VCS fabric customers are telling Brocade that the technology will help them migrate to software defined networking and network virtualization in data centers.
According to a SeekingAlpha.com transcript of the earnings call, CTO David Stevens said sales of the VDX switching line are accelerating and expanding. In the first year the technology was on the market, Brocade saw mostly pilot projects, but “now we’re seeing a fair number of those accounts scale out into broad production use of the technology. In fact, some of the customers [are] hitting the limits of” the original VDX architecture.
Brocade announced the VDX 8770 chassis switch this year to increase the scale of the VCS fabric. The company now has 800 VDX customers.
“Over time, we’re going to see more scale-out production use of the technology, both… within [the] installed base where we sold the product to date but also as we gain new name accounts going forward,” Stevens said.
In its final quarter for fiscal 2012, Brocade reported $578 million in revenue, a 5% bump year-over-year. It was a record quarter for the company, driven mostly by a robust sales in storage area network (SAN) sales. Its IP networking business declined by 3%, pushed down by routing. Switching actually grew by 5%.
During the earnings call one financial analyst, Mark Sue of RBC Capital Markets, pushed Brocade’s executives on the idea that it should focus its Ethernet business in the data center, saying “the business might benefit from some focus… Is there some thought of driving that deeper into the data center and perhaps less in the campus and less in the enterprise just because the market doesn’t seem to be growing that margin? It is very crowded.”
Jason Nolet, VP of Data Center Networking Group, said Brocade has invested substantially in its VCS fabric and its VDX switches. Investments in campus networking aren’t taking away from that data center focus, he added. Stevens, the outgoing CTO, added that investments in campus networking are relatively small compared to the investments the company has made in developing VCS and service provider networking.
Brocade started refreshing its campus networking products a year ago with the ICX 6610 series. Next year it will release HyperEdge, a campus LAN management technology that establishes a single management IP address where admins can make changes to an entire network through a single CLI session.
Stevens added that customers are starting to engage with Brocade about the need for software defined networking technology, especially for implementing network virtualization.
“I think it’s starting to gain a lot of interest,” he said. “When you think about adding another layer to the network with network virtualization, you’re going to add logical networks through tunnel technology. You’re actually adding to the overall administrative burden of that environment, because the physical infrastructure doesn’t go away. It still needs to be scaled, maintained and managed to upgrade, et cetera.”
Customers are telling Brocade that the VCS fabric’s ability to “simplify and reduce the operational overhead of that underlying transport as a result of the very high level of automation and efficiency that we’ve built into the fabric” allows them to focus more on how they’re going to deploy and run network virtualization, Stevens said.
“It also prevents them from just doubling up their operational overhead as a result of having adding that additional virtualization layer to the network environment,” he added.
F5 Networks will deliver its “largest appliance refresh in four years,” according to CEO John McAdam. The breadth of that refresh is unclear, but McAdam revealed during F5’s latest quarterly earnings call with financial analysts (courtesy of a SeekingAlpha.com transcription) that a new 8-slot Viprion chassis will roll out within the next two quarters. Viprion is F5’s line of modular application delivery controllers. He said the new model will have double the performance of F5’s highest-performing, four-slot Viprion 4480.
An eight-slot chassis will appeal to service providers and web-scale companies (Facebook, Google, etc.). Last year F5 introduced a down-market Viprion, the two-slot 2400, which is priced for companies that want something a little more flexible and powerful than the company’s fixed-configuration BIG-IP appliances. During the earnings call, McAdam said the Viprion 2400 is selling very well and he implied that the 4480 is seeing softer sales as service provider spending has dropped across the industry.
F5 will also introduce an “application delivery firewall” via an update to its ADC firmware, TMOS. McAdam said this firewall will integrate Layer 3 through Layer 7 security, “including the loss prevention and unique application fluency to prevent sophisticated application attacks.” This firewall will also include DPI functionality, although McAdam indicated DPI would be aimed mostly at service provider customers.
NPR’s Planet Money podcast recently did an episode on Ford’s luxury car brand Lincoln, and how far it’s fallen. “Can Lincoln be cool again?” Apparently there was a time when the Lincoln Town Car was cool, finding its way into Frank Sinatra lyrics, etc. Today it’s just the ubiquitous car driven by mid-range car services. If you’ve ever walked the streets of midtown Manhattan at night looking like a tourist, some creepy guy in a seven-year-old Town Car has pulled up and offered you a ride to your hotel for a flat fee.
Ford is systematically trying to resurrect the Lincoln brand as a viable competitor to BMW, Audi, and Lexus. Unfortunately for Ford, the company has to do a lot more than simply build a good car that’s worthy of the price tag. The brand has been moribund for so long that it’s aged out of key demographics. People entering their thirties and just starting to earn enough income to think about buying a luxury car don’t think of Lincoln as an option. They’re looking at the brands that bankers, lawyers and Hollywood types are driving. Lincoln is not on that list.
I think tech companies can face the same challenge if they don’t keep their brands competitive. RIM is starting to develop a Lincoln problem with BlackBerry. Whole generations of smarpthone buyers are emerging who have never even held a BlackBerry. My two-year-old niece knows how to work the touchscreen of an iPhone or Android device. If you put a BlackBerry with a qwerty keyboard in her hands, she’d put it to her ear and say “Hello?” Then she’d throw it away and start playing with the iPhone again. That’s a heavy-handed metaphor for what’s happening with kids entering the workforce. In a BYOD world, how many 22-year-olds are going to bring a BlackBerry to work?
Postponing the BlackBerry 10 OS only compounds the problem. Some coupon web site with a silly name (CouponCodes4u.com) sent me some flash poll data aimed at gauging consumer reaction to the BlackBerry 10 news. The site polled 1,451 Americans aged 21-35. Twenty-one? How many 21-year-olds have even considered a BlackBerry?
No surprise that 29% of these people felt that BlackBerry products were not “as well designed or built” as they used to be. (Don’t young kids think that about most American cars these days?) And 59% of those surveyed said they didn’t own a BlackBerry. Why not? Well 52% of those who don’t own one cited the lack of personal and business apps, such as Instagram and Angry Birds while 53% also said that there “was nothing special” that the BlackBerry could offer them. Does that sound like a Lincoln Town Car problem? It does to me.
RIM isn’t dealing with an “If you build it, they will come” situation here. Even if they get a great OS out to the market next year and it draws rave reviews from gadget blogs, there is no market for it. BlackBerry loyalists (those few who remain) will buy one, but you’re not going to win new customers from Apple and Android. It’s going to require more than a good product. Aaaaaand it’s going to require a brand revival. And I’m not talking about easy gestures like sponsoring the pre-game show for the NBA Finals or hiring Jennifer Lopez to drive around in a Fiat. It’s going to require a fundamental invigoration of the brand. Convince those pesky millennials that BlackBerry isn’t their granddad’s smartphone.
When Cisco introduced its Open Network Environment at Cisco Live last week, Cisco executives spoke about the importance of northbound APIs, leveraging the intelligence of switches and routers to supply information to the orchestration layer so that it can make better decisions about how to program the network.
Now Plexxi Inc., a stealthy, software-defined networking start-up, is emerging with a similar message. Plexxi is being vague on the details of its technology but it’s lifted the curtain on some of its marketing message this week. It’s calling its approach to software-defined networking Affinity-Driven Networking.
Plexxi is also hinting that its software-defined networking technology extends to the physical layer of an optical network, allowing a network manager to provision bandwidth by manipulating the wavelengths of optics.
Mat Mathews, co-founder and vice president of product management at Plexxi, said his company is starting a limited private beta with select customers who have been working closely with Plexxi on the development of its products. Mathews describes Affinity-Driven Networking as an integrated software and hardware solution consisting of a a top-of-rack network switch and a software-based controller. Although Mathews describes the product as a software-defined networking (SDN) solution, he said Plexxi is not using OpenFlow.
Plexxi customers will be able to build out an entire data center network using only the company’s top-of-rack switches and its software, although customers will have the option of integrating a network domain built with Plexxi technology into an existing legacy ntwork.
Mathews said Plexxi is looking beyond the decoupling of the control and forwarding planes that other SDN vendors champion in order to focus on a neglected issue in the data center.
“Networks are fundamentally disconnected from applications and application workloads,” he said. “We can use tools and software to understand application workloads in a data center. The first part of Affinity Networking is getting an understanding of those workloads and what they require. The second part is building a physical network that can implement these workloads exactly with the direct requirements we understand from either the orchestration tools, the applications themselves or the data center operator.”
So just how does Plexxi deliver a network that is tailored to the needs of application workloads? The company isn’t sharing too much information on that, at least until its products become generally available at the end of this year or early next year. But Mathews did drop some hints.
“We’re leveraging some optical technologies to allow flexibility in how we interconnect racks together without the overhead traditionally associated with the aggregation and core layers [of a data center network]. We can connect racks directly together and enable direct east-west capacity. Servers want to talk to each other, so our physical topologies are optimized for east-west traffic. And we use software-defined networking to flexibly orchestrate that bandwidth based on where it’s actually needed.”
Plexxi’s secret appears to focus on the physical layer of the network stack. The company is virtualizing the physical layer with optical technology somehow.
“We set out to build a network where you can ‘move the wires,'” he said. “That’s where we brought in optical technology, because we can use things like wavelengths and lambdas that are provisioned in software and say, ‘OK, this rack needs to be connected to this rack. And it doesn’t just need a 20 gigabit connection. It needs a 100 gigabit connection.’ Those kinds of dynamic capacity issues are only possible where you get down to virtualizing the physical layer. Optical technology allows us to view those physical layers as wavelengths of light.”
“We can move capacity by changing the way wavelengths of light are distributed across the network,” he said. “Therefore, we can say, ‘You need 20 gigabits now. We’ll take the 10 gigabits you’re not using over here and put it there. That’s not possible today with just a [SDN] flow table.”
SAN DIEGO — Next month Petco Park, the home of Major League Baseball’s San Diego Padres, will turn on a distributed antenna system and a wireless LAN to provide wireless access for all of its fans.
The Padres, a Cisco customer, opened the gates of its ballpark to the technology press during Cisco Live this week in San Diego. Like most sports stadiums, mobile access at Petco Park has been a challenge, according to Steve Reese, vice president of technology for the Padres. The building is made tens of thousands of tons of concrete and steel. And the thousands of fans to come to games compete for limited bandwidth, overwhelming the macro cells of the mobile service providers in the area.
“We had great intentions [when we built this park], but something was missing,” Reese said. “What wasn’t factored in was the speed of technology as time moved on. The [mobile] expectations of fans that come into this facility today aren’t met.”
Reese is trying to address this. He has deployed a distributed antenna system (DAS) with 460 individual antennas. The “anchor carrier” for DAS is Verizon, he said, but it has capacity for three other carriers.
Backing up the DAS is a wireless LAN composed of 423 Cisco 3602e access points (APs), rugged outdoor APs designed for stadium deployments. The 3602e features a narrow 36-degree broadcast radius as opposed to the typical 180-degree radius. This enables the Padres to target specific sections of the ballpark without intersecting with the streams of neighboring APs.
The Padres have also installed a dual-core of Nexus 7009 switches to handle all this mobile traffic.
Reese said that 50% of Padres fans come to the park with mobile devices and about 12% of them will connect to his Wi-Fi network rather than the cellular networks. The Padres’ mobile infrastructure is robust, but Reese remains unsure of what will happen.
“A variety of people are coming in and we don’t know what they’re going to do,” he said. “One thing is iCloud. Thirty-five percent of the phones coming in are going to be iPhones and they will be trying to sync with iCloud. How are we going to deal with that?”
The Padres will get some answers when the team turns on the wireless network during baseball’s all star break in mid-July.
Cisco Systems has enhanced its online lab environment, Cisco Learning Labs to make it more user-friendly. It has also enhanced the environment to allow networking pros to practice certain tasks that usually require access to physical hardware.
Learning@Cisco launched Cisco Learning Labs a year ago as an online environment geared toward helping networking pros practice lab exercises for Cisco certifications. The lab environment uses a version of IOS that runs on UNIX. It’s positioned as a cheap alternative to home labs or the physical labs that some certification boot camps that rent out. Cisco Learning Labs rents out 25-hour blocks of online lab time at a starting price of $25.
The new version of Cisco Learning Labs has been dressed up with an updated user interface to make it more intuitive for users, according to Marcello Hunter, product manager for Learning@Cisco.These updates have been added to the ICND1, ICND2, ROUTE, SWITCH and TSHOOT labs. These labs now feature helpful elements like “question bubbles,” that new users can click on to get hints on what to do.
“A lot of our customers working on these labs are newcomers to the networking world and newcomers to the complexities of working with networks,” Hunter said. ‘Just learning how to set them up and launch them and learning how to work with the user interface of IOS was new to them.”
The lab environment also has a series of new instructional videos that accompany the ICND1 and ICND2 labs.
Cisco has also introduced an expanded set of lab exercises based on switch functions that are typically implemented in hardware and are thus not available via an IOS software image. These functions include Layer 2 port security and port channel interfaces. The Layer 2 port security feature will expand the labs exercises available for all Cisco certifications. The port channel interface will expand labs for certifications CCNP and above.
In a flat global enterprise router market, Huawei managed to wring out some robust growth in the first quarter of 2012, according to Infonetics Research.
Enterprise router revenue dropped to $834 million last quarter, down 9% from the fourth quarter of 2011, Infonetics Research announced this week. Year over year the market grew just 2% over the first quarter of 2011. Pretty grim from a global perspective. However, the North American slice was slightly better. It’s down 10% from quarter to quarter, but up 8% year over year.
Despite the flat market, Huawei reported huge growth in enterprise router sales, which is surprising since North America was the primary area of growth. Huawei is just starting its push into the region’s enterprise market. Its home market of China was extremely weak last quarter, down 20% from the fourth quarter of 2011. But Huawei posted 79% revenue growth year over year in and 130% growth in units shipped, Infonetics reported.
Cisco Systems remains in the driver’s seat, with 74.6% of the market revenue share last quarter, a 12-month high.