You have a robust software-defined network strategy. What do you say to people who claim SDN is really not very good news for a company like Cisco? One Dell executive said "SDN is kryptonite to Cisco." What do you say to that?
This is where you can get religious about the technology or you can step back and look at what a customer is trying to accomplish. We see a lot of buzz around SDN and I think John may have even used a quote in your last interview that there's not a customer on the planet that woke up and said "if I could only buy SDN today, my day would be complete'. What they're looking for is flexibility, agility, greater asset utilization, operational efficiency, the ability to move with more speed. We looked at SDN as it was being espoused and asked 'what are the benefits a customer really wants from that?' Then we said the best way to expose that is to give the application the ability to drive policy into the data center, and that's what we did. Now we're going to expand that across the entire enterprise so that the application can fundamentally define the infrastructure upon which it runs, whether it's quality of service, security profiles, provisioning compute for some period of time, provisioning incremental virtual machines, provisioning incremental storage. We think that the value of SDN is for it to be automated and we think that we're uniquely positioned to do that through a combination of our network capabilities and then bringing automation from the top.
That's one set of objectives with virtualization. The other is that I can essentially make my infrastructure fungible. I don't really care where it comes from. We saw that with server virtualization. Do you not see that coming with SDN over time?
If I use your server example, we entered the server market seven years ago? Six-and-a-half years ago? And if that were the case, that servers were completely fungible, then we wouldn't have entered with a premium solution and moved to number two share globally. There are unique capabilities that we still believe are brought to bear to bring value. One of the misconceptions of network virtualization is that people view it as they viewed server virtualization or storage virtualization. Virtualization of servers and storage was done because they were radically underutilized resources. You might have had 30% of a server being utilized or some smaller number. We're upgrading networks every year because they're over-utilized. So that's not the reason to do it. The initial benefits of SDN were around operational efficiency, automation, not having so much complexity and provisioning a data center for a certain application. We believe that through a combination of our technology and some of our software assets and then an automation layer across the enterprise, we can provide that capability. I think the word "virtualization" gets a little misconstrued here, when it's really automation and programmability and it's about speed and lower operating costs.
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