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Why Cisco’s change strategy is slowly paying off

James Henderson | May 24, 2016
The vendor is working to move away from the sluggish equipment industry into the fast-growing services market.

“The most glaring threat will be to Cisco’s existing customer base, which is migrating to hybrid Cloud, exposing them to a wider range of solutions outside the Cisco ecosystem that may be less expensive or easier to procure.”

Hyperconverged market

Following a yearly decline in its datacentre segment in 4Q15 and single-digit growth in 1Q16, Filkins said Cisco is expanding its portfolio to find new growth.

“Cisco views technological disruption in the datacentre, driven by a shift to software-centric converged and hyperconverged solutions, as a growth opportunity,” Filkins said.

In March Cisco commercially launched HyperFlex, its hyperconverged solution, which is engineered to converge a customers’ networking fabric (Nexus), compute (UCS), storage and hypervisor software into one stack.

“Cisco partnered with Springpath, in which it is an investor, to deliver network storage through software,” Filkins explained.

“Springpath’s software eliminates the need for traditional network storage by tying together compute and storage functions across the datacentre.”

For Filkins, storage is an area in which Cisco has struggled to monetise on its own, as evidenced by the discontinuation of its Invicta flash storage products in 3Q15 and its reliance on partners such as EMC to supply converged solutions through the VCE business group.

While Cisco is a late entrant in the hyperconverged market, Filkins believes it will leverage its networking heritage to differentiate by offering swift integration with customers’ network infrastructure, which is typically a technical hurdle during hyperconverged implementations.

 

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