Cisco's Business at Risk?

Peter : On Rad's Radar?
Peter
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

Cisco's Business at Risk?

"CEO Chuck Robbins' first orders of business upon taking the helm at Cisco was to initiate a transformation away from hardware and shift to a software, cloud, and recurring revenue model. Last quarter was yet another example of Cisco's slow but steady progress. Total revenue declined 2% to $11.6 billion," reports Madison.com.

There is an interesting article on Business Insider about Facebook making switches and routers for themselves. But now a number of telcos globally are trialing the gear. That doesn't help Cisco at all.

At the same time, the carriers and just about every other managed services provider is offering SD-WAN. These deployments are white boxes. Cisco, Juniper, ADTRAN and others are being replaced at the edge of the WAN by white boxes.

It is also hurting VADs like Tech Data, because these boxes are NOT going through distribution. They are being distributed by the carriers like EarthLink and TPX directly.

ADTRAN is making moves to stave off extinction with hardware as a service, managed wi-fi, and SD-Access.

It's interesting because Amazon's Chime is competing against Webex on the collaboration space. Carriers are competing on the WAN CPE space. It's VAR channel is modeled on hardware sales and installation. Selling software is not nearly the same business model as hardware.

This is just an observation - and it will be interesting to watch as these things shift.



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