Do Cisco’s Numbers Spell a Market in Decline?

Cisco reported their results for the quarter, and while the current numbers were good (beating estimates and up year over year) the guidance was tepid.  As a result, Cisco’s stock took a major hit post-market that is off its lows this morning but still down about 7%.  Network equipment competitors also fell, and this is an interesting reflection of the dynamic in the industry.

Cisco is the leader in networking, and like virtually all leaders in tech it’s become more cautious about innovation.  “Fast follower” has replaced “leader” in their self-definition.  In an ordinary market, this would open an opportunity for its competitors.  Innovate, set the bar high, steal market share, and take over the industry lead, or at least challenge for it.  Not now.  Instead competitors were whacked in their stock pricing too.  No leadership is possible, says the Street in post- and pre-market trade at least.  Nobody’s home upstairs.  This explains why Huawei has taken a position in the enterprise that’s clearly simply price-based counterpunching with Cisco.  They need not fear innovation, something that could make their positioning based on price a liability because they’d be selling the wrong product, in effect.  What it doesn’t explain—the question it begs, in fact—is why the heck network vendors ever let it get to this point.  I don’t have an answer.

Operators for the last two years have recognized three specific monetization areas; content, mobile/behavioral, and the cloud.  The first two require an investment that’s probably biased in favor of network equipment in the capex, and the cloud is exactly the opposite.  Absent any rational service-layer strategy (one Tier One we’ve worked with has been trying to cobble a content story together from vendor offers for almost two years now), our fall 2011 survey showed that operators were moving to the cloud.  Why?  Because they knew generally what they needed there.  So with two easy lob pitches to hit, the network vendors took two strikes and waited for the hard inside fastball.

Well, the thing is that there’s still hope.  Stu Elby from Verizon made it clear that OpenFlow was a part of their cloud planning.  Google has actually deployed it.  Both these sources demonstrate that there’s a “service layer” in the cloud too.  The cloud IT players don’t have the solution there either, and so if network operators did have it they could be expected to gain some strategic ground.  I think that’s what Cisco was after with CTO Warrior’s presentation at Interop.  Create a framework that overlays the network, virtualizes everything, supports composition, and you have addressed all three monetization goals…the way operators want them addressed.  The question is whether Cisco’s commitment to this goes beyond PowerPoint.

While all this drama is going on with the giants, little Adva Optical has come out with a successful demonstration (in conjunction with a university) of the use of OpenFlow to control wavelength routing.  This means that you could build a multi-layer network and control paths at all of the layers with a central control point, which is what operators have wanted.  Ericsson, as we’ve noted, has been doing work in this space too.  So the question now is whether Cisco can get their stuff up to speed quickly, whether Ericsson can extend their early lead in OpenFlow/optical integration, whether a small player like Adva will drive the future, whether one of the other network equipment competitors will jump in and do something….  Of course, they’ve done nothing up to now.


“I’ve Looked at OpenFlow from Both Sides Now”

There’s some interesting news on the SDN/OpenFlow front, both from the side of the provider (Verizon in this case) and the vendor (Cisco).  Some is from CTIA and some from Interop, which means that just perhaps something useful may come out of Interop after all!

Verizon’s Elby talked about the role that OpenFlow might play in the cloud.  “The cloud is essentially a hosting platform for the SDN,” said Elby in a Light Reading article that quoted his CTIA talk.  What strikes me about Elby’s comments is that he’s asking for the same mission “above” OpenFlow that I’ve blogged about before.  DevOps in general, and perhaps Donabe in particular, seems to me to be aimed at the spot that Elby wants filled.  By creating an abstract view of connectivity, addressing, and resources, you can put an app in the cloud anywhere and have it self-integrate.  Elby is right in saying that this capability doesn’t exist, but I think that DevOps is the place that’s currently building it.

What’s interesting here is that it’s clear that Verizon has been thinking a lot about OpenFlow and the cloud, which demonstrates that the interest from Google in OpenFlow as a cloud-backbone isn’t the only example of cloud linkage to OpenFlow that’s out there.  I expect that the spring survey will  show that the cloud/OpenFlow connection has been made by pretty much all of the Tier One operators, and further that most of them have the same vision regarding the need to create some higher-level function to provide the knowledge of cloud connectivity that OpenFlow would demand.

We’ve seen some recent positioning about OpenFlow and the cloud, but given both Google’s presentation and Verizon’s, it’s hard to understand why vendors haven’t jumped on the OpenFlow cloud angle sooner.  The Google project has been going on for over a year according to my sources.  The longest-running Tier One project in the area is nearly two years old.  Google clearly did their thing without vendor support, so imagine what might happen if there was real support and not just “softwashing” of switches and routers with SDN claims.

Some of that support may be coming from Cisco, who happens to be heading the Donabe project.  In an Interop pitch also reported in Light Reading, Cisco CTO Warrior talked about what it’s calling the Cisco Open Programmable Environment, which is a layer above the SDN/OpenFlow process and which extends upward into software, and according to Warrior’s presentation, to orchestration.  If all of this is real, it could be a real coup for Cisco.  According to the talk, Cisco’s framework will be “open”, which I take to mean it involves enough open-source that it will have to be offered with open interfaces and possibly even open-source code.  It will likely then have developer programs associated with it, programs that could be relied upon to build not only software to drive basic applications automating connection management, but complicated ones that involve cloud provisioning and service-layer component orchestration.  In short, Cisco might be building a bridge that links all of the critical stuff of the age, and building it across both the enterprise and service provider spaces.

One benefit this has for Cisco (and let’s face it, there has to be a benefit because this isn’t charity, it’s a competitive industry) is that this higher layer will be able to manage virtualization not only for OpenFlow/SDN networks but also for tunnels based on IP technology, including MPLS.  I think it’s also likely Cisco plans to use the same layer to manage optical paths, which would mean Cisco could become the first vendor to fully integrate its stack of protocols and services vertically with applications.

One interesting question is whether this sort of thing, which has as I said a clear developer connection, will make Cisco much more attractive to developers than its competitors.  Developers want two things from a vendor partner, exposure and facilitation for their value-add.  A well-designed framework with the kind of features that Warrior alluded to in her talk would certainly provide an easier jumping-off point for development than one that requires that developers work with the primitive device-level APIs.  And of course nobody doubts that Cisco can provide exposure.

The Impacts of the New Cisco/Huawei Dynamic

Not surprisingly, Interop looks like it’s going to be all about the cloud.  Not surprisingly, a lot of the noise is nothing more than that, but there are some things emerging that might be indicators of real market shifts.  While the cloud is the focus, I don’t expect there to be much in the way of substance in the cloud announcements.  We’ll have to look deeper.

The most strategically significant announcement came from Huawei, who has launched a data center switching line and also a high-end telepresence system.  The combination of these two offerings is a lot more significant than either would be alone, but the data center switch offering is significant in itself.  In part this is because Alcatel-Lucent also announced an upgrade for its enterprise data center product, and because both Huawei and Alcatel-Lucent made the cloud connection clear.

On the switching side, the important thing here is that everyone is now accepting that the cloud is the justification for data center switching changes on a large scale.  Given that everyone had pretty much accepted that enterprise network equipment spending was going to be driven by data center trends, that makes the cloud the most important thing to seize in positioning.  Absent a cloud position, there’s little you can say about data center switching other than spout technology buzzwords, and that doesn’t play well in the media or with buyers.  Enterprises tell me that they need tech trends with business consequences to justify major IT changes of any sort, and the cloud is that thing.  Whether we like it or not, we’re in a cloud era.

The thing that makes Huawei’s switch and telepresence important when taken together isn’t symbiosis between the two (obviously; you don’t need telepresence from one end of the data center to the other!) but the implications on the competitive dynamic between Huawei and Cisco.  Chambers has been saying that Huawei is the guy to beat, and we now see one reason he might have done that.  Huawei is clearly going to go after the enterprise space by paralleling Cisco’s product line and riding on Cisco’s positioning coat-tails.

Cisco is on a roll, make no mistake.  Cisco has the best sales morale, which combines with good strategic positioning to mean that it is in a position to move the ball and get deals approved.  Huawei wants to step in at the deal-approval point and offer the buyer a big discount versus Cisco, which is a smart way to get into the game.  Other vendors in the space are likely to be collateral damage; this is a two-horse race unless somebody does something radical.

Who?  Alcatel-Lucent could take some of its CloudBand stuff into the enterprise, and in fact most of its carrier-specific cloud positioning could be applied well at the enterprise level.  I don’t think they’re going to do that at this point, because the best time would have been this week to coincide with their enhancement to their OmniSwitch products.  Juniper might have set the bar completely for the cloud positioning of data center products last year with its QFabric and PTX, but it booted it and there’s little chance they can ignite something new at this point.  F5 seems the most likely candidate among the smaller vendors, but I don’t think any small vendor can survive in this battle of the giants.  Cisco will set the agenda, Huawei will compete on price, and everyone else will likely watch from the sidelines and under-realize their goals.  The only hope for the next tier now is a killer positioning of data center switching with OpenFlow/SDNs, something that’s actually not only possible right now but even easy.  It’s just that incumbents shy away from undermining the notion that switches and routers are only going to get bigger, more complicated, and more expensive over time.

The challenge this poses for Cisco is obvious, but to a degree Cisco has the position from which they can break the deadlock.  Huawei can counter on price only for fairly simple product-for-product face-offs.  For strategic combination of stuff, they don’t have any enterprise credibility to speak of.  Cisco has historically tried to let others lead and “be a fast follower”, reaping the benefits of an early opportunity demonstrated by someone less powerful.  They may need to get a bit more out in front than usual if they don’t want to lose sales and margins to Huawei.


Progress Software’s Cloud Lesson

Progress Software, one of several firms engaged in a complicated (to buyers) activity called “SOA Governance” is shifting its business and its development focus to the cloud.  Given that SOA is likely to be the future of the cloud, as I’ve been saying, you might find this a curious move.  What it illustrates is the power of marketing hype.

The cloud is the hottest topic in IT.  SOA in any form is first old-hat and second complicated.  You can’t get an editor to run a SOA story because nobody will click on the URL, they won’t serve ads, and nobody makes money.  Cloud clicks are a given, hence you’re a cloud player.  It’s cynical, sure, but when has marketing (or the media) not been cynical?

The challenge for the cloud, beneficiary of all of this ad-click-driven largesse, is that the same mindset is undermining any realistic coverage, and thus any helpful discourse.  Cloud planning is taking enterprises much longer to accommodate than previous technology waves.  In the past, we went from an announcement of a technology with breakthrough benefit potential to full realization of the adoption rate in about 2 years.  In the case of the cloud, we’re staggering below the one-percent-of-opportunity level at that same point.

Some vendors appear to be thinking that the fact that there’s a massive cloud hype wave means they can ignore the cloud and the changes it will bring, which is yet another danger.  Hey, this cloud stuff is hype so let’s get down and focus on pushing boxes the old-fashioned way.  A chicken in every pot, a router—no TWO routers— in every network.  What Prospect really proves is that hype drives the project approval mindset.  It may not guarantee a project will succeed, but running against the hype tide creates a fair certainty of project failure.  Buyers need to have management buy-in, and that’s created in no small part by the editorial climate of the market.

Speaking of routers, UBS says that the service provider router market is “maturing”, by which they mean that the heady days of explosive growth and expanding margins are gone.  Both edge and core routing are expected to under-perform in growth terms, undermined by the cost-savings drive that’s always going to accompany growing traffic in the face of static revenue.  One point they make that’s particularly interesting is that caching (CDNs) have an impact here.  Operators told us that spending on caching produced twice the benefit of spending on capacity.  OTN and agile-optic core networks are also aimed at the cost line, and OpenFlow is likely to be used primarily to reduce cost as well.  Why?  Because nobody is talking benefits, top-line gains, in any effective way.  Will these guys NEVER get it?  Apparently not, but it’s already starting to hit their bottom lines.

Look, as an example, at AT&T.  Here’s a company that’s now betting on home security and automation (as Verizon already is) to boost its consumer revenues.  The network vendors have little to offer in this space; Cisco bought a home-gateway-management player and that was about all anyone could think of apparently.  This is a cloud-hosted service feature, guys!  This is what you could have, and should have, been planning to support for at least four years now.  The earliest operator presentations into the hosted-feature model go back that far.  Today, I call this a “cloud” application in part because that’s what operators are calling it, and in part because their conception of the feature-hosting framework has shifted to become one built on an IT vision—cloud computing.  What happened to the network vision?  It never really got going in time, even at places like Alcatel-Lucent or NSN who today tell a decent story.  Today, it’s not news and so absent incredibly effective promotion (and what network vendor has been capable of that) it’s not going to get any traction.

OpenFlow to a New Level?

People seem to be catching on to the fact that SDNs are going to have an impact, but I think there is still a tendency to underestimate what that might be.  The Google announcement on their use of OpenFlow has prompted Light Reading to ask (rightfully) whether the fact that companies like Google are becoming a bigger piece of the network infrastructure pie so their SDN shift might be a big push on vendors.  Yes it will, but what’s bigger news is that Google is a microcosm for the cloud, which is a superset of the data center.  I’ve said for years now that data center network spending is driving enterprise network spending.  Cloud spending is now becoming the main driver of change for operators.  Google’s OpenFlow story proves that both can support OpenFlow, and OpenFlow can be a commodity switch technology.

Cisco’s buy of Truviso may be a reflection of this reality, and multi-dimensionally.  First, Truviso is an analytics player that has focused on web-oriented data (though it could have other applications).  That means that it could be leveraged into personalization, advertising, and other stuff that sits at the service layer.  If the network is commoditizing it’s because traffic/connectivity isn’t the focus any more, and if that’s the case then focusing on what IS important (services) is smart.  But second, analytics could play in the implementation of SDNs.

Cisco’s David Ward suggested in a talk at ONS that the future was a kind of feedback loop of analytics, policy, and the network.  That sounds like a company getting ready to buy an analytics firm, and it also sounds like one that may be committed to engaging analytics in the SDN process.  The question is how that would be done, and whether it’s a cynical ploy to try to build more legs under traditional routing or a serious attempt to build the network of the future.

The SDN notion is about having explicit central control over connectivity, replacing adaptive creation of forwarding tables.  The question is how that connectivity is managed, and it has to be answered at a number of levels.  You have to know what the map of the network paths is.  You have to know what the state of the devices is.  You have to know what connection requirements exist for applications in IPC paths and on storage-connect routes, and you have to know what the users are allowed to do.  All that standard open-source controllers do is send commands to switches; you have to know what commands to send them.  So how all these have-to-knows are realized and turned into switch policies is pretty important.  Might this be what Cisco wants to do, what their mystery spin-out-and-back company will be doing?  Possible.  And remember that a Cisco guy heads the best of the cloud DevOps projects, at least in terms of the scope of its abstraction of the cloud provisioning processes.  Tie that in and you have a winner.

The earnings reports of LinkedIn and Level 3 are a nice illustration of this network-evolution discussion.  LinkedIn’s profits roughly doubled, which shows that social networking can be a success.  Facebook’s IPO, due shortly, is another indication that’s true.  Level 3 did “good” in that its loss narrowed on higher revenue.  Narrower losses do not constitute a profit, much less profit doubling.  The point is that you can’t expect to be a vendor increasing your sales and profits while supporting an activity that’s barely able to stay in the black.  Especially when that activity is supporting a highly profitable higher layer.  You need to start climbing.


New Business Models in Wireless, Video, and the Cloud?

Well, it looks like there’s some substance in the rumor that Apple is going to get into the mobile broadband business.  At least two independent reports are now saying the company is negotiating with several wireless operators to become what’s called an MVNO, or mobile virtual network operator.  MVNOs don’t own spectrum or facilities but lease capacity from others.  I commented on this possibility early this year when it surfaced that Apple had a patent for a carrier-agile phone, one that could allow them to roam between, say, AT&T and Verizon.

The benefit to Apple here is pretty clear; they would get a deep discount from a wireless operator for bulk capacity and then earn the retail profit spread on each customer, who would now buy their wireless service from Apple.  There are already MVNO relationships worldwide, so everyone knows that the model can work, but the profit margins for these players are thin.  Apple’s retail power and pizzazz combine to give them a better-than-average shot at making this work, but I don’t think it’s a slam dunk yet.  The question is whether they can play the carriers against each other to get favorable rates and good coverage.

Another factor in the MVNO picture might be AT&T’s “Watson” APIs, which are scheduled to be available to developers in just a few months.  Watson would allow cloud-based or device-based speech recognition to be integrated with apps for virtually any device, and Apple might well see this as a sign that the network operators intend to deploy their own cloud-based or device-based service features, which would collide with Apple’s ecosystemic profit plans.

I don’t think this is a done deal at this point; I do think Apple and Google are both checking out the business model for an MVNO launch, and we may see at least one of these giants move.  The obvious timing would be for the fall/holiday period, and if there’s something on tap for that period we should hear more by mid-summer.

There’s also more indication that the TV Everywhere model is expanding and becoming the de facto streaming strategy.  Networks (NBCU) and advertisers are both looking more to symbiotic ad deals that exploit streaming as an extension of linear TV, and it turns out that both are very comfortable with that notion and highly uncomfortable with the alternatives.  The interesting thing is that the TV Everywhere acceptance by advertisers is an indication that the networks themselves are unlikely to try to bypass linear broadcast and cable players in favor of direct streaming to customers; the ad revenue won’t cover the cost of the shows and the linear players would likely stop carrying the channels.

Yesterday I pointed out that there was a rumor Hulu was being put under pressure here.  Today the story is that Sony is dropping its plans for a streaming service because of the price-cap policies of Comcast (and presumably other players).  Comcast, so the story goes, will be taking its TV Everywhere platform (X1) to a major city shortly.  While there’s also a rumor that CBS is again at least looking at Hulu distribution of shows, it’s not clear whether that consideration is conditional on the link to linear subscription.  So TV Everywhere is going to win in content, and that’s good news for operators because it links streaming success with linear TV delivery, something the appliance players don’t do.  Might that be another reason for some appliance guys to be thinking of MVNO relationships?  Could be.

In yet another development, this time in the cloud, Microsoft has announced that it’s going to drop its “Live” service brand.  It’s not going to discontinue a web-based service presence, but I think what it intends is to package its offerings as cloud components, for deeper and more explicit integration with desktop products.  Microsoft has less to gain from being a web provider than by being a cloud provider, and it has less to gain by promoting independent browser access to its apps and information than by integrating that with Windows 8 so it can help differentiate its tablets.

If you look at all of this in synchrony, you see a transformation of a lot of big player’s business models.  I think it’s clear that mobile video slaved to TV Everywhere favors the carriers rather than the appliance players or independent portal players.  I think it’s clear that handset subsidies are passing and the appliance guys want to figure out what will keep them in the hands of wireless users in the future.  I think that Microsoft and Apple and Google all realize that cloud services to devices are going to be the big differentiators, but so do the carriers.   Might we finally see the telcos get off the dime on services?  Not unless they get some help conceptualizing their infrastructure for the new model.  So far, that’s not happening, but I may get more data in our spring survey, which we’ll publish in Netwatcher in July.


Random Mobile and Video Events

The early indications suggest that RIM’s vision for its new OS and device line may fall short of revolution, and if that’s the case the company’s chances of recovery are slim.  The demonstrations of Blackberry 10 suggest that while they’ve changed the GUI and keyboard, there’s little or nothing new in the cloud-to-device relationship.  I’m also, at least so far, not seeing anything meaningful in creating a more portable application ecosystem via HTML5.

Nobody thinks of Ubuntu Linux as a mobile strategy, but it’s worth taking a look at Ubuntu’s Webtop-like concept to see what might be done to change, even revolutionize, phone/tablet development.  Canonical, the company behind Ubuntu, had developed a new Linux shell/GUI called “Unity” and they’ve ported this to Android to create (no surprise in the name) Ubuntu for Android.  The framework that’s created is much more computer-like for developers, and it offers the kind of multi-platform application options that Windows 8 is promising.  Not only that, applications that run with Ubuntu for Android will sync with a desktop or another version of the Unity desktop automatically, creating an easy workplace-swap when you stop using the phone and get to the office.

With Ubuntu for Android you get something very close to the notion of a fully portable and sharable virtual workspace that floats among your devices.  It seems to me that’s what RIM (and Microsoft, and Apple) need to be looking at and thinking about.  The question is whether something like this will drive any of those big mobile appliance guys in the right direction.  It’s unlikely that Ubuntu for Android will succeed unless a phone player (or Google itself) were to pick it up.  I’m not prepared to say that couldn’t happen, but I wouldn’t hold my breath.  The biggest chance of an uptake in interest would be from a host of “rootings” of devices to run the software, and that could happen if phone manufacturers don’t keep their versions of Android up to date.  A flood of older tablets are expected to be upgraded to Ice Cream Sandwich before the end of spring, and if that doesn’t happen then disgruntled owners might be induced to pick up the Ubuntu strategy for themselves, especially if Canonical promotes the idea.

If RIM had something like this, they could build direct value to the worker because the kind of cross-platform synchronization and coordination that Ubuntu for Android provides automatically is just what enterprises would like to see in productivity enhancement tools for mobile platforms.  Few workers are persistently mobile; most are “corridor warriors” who are regularly in and out of their cubicles.  Most disappointing for me is that here’s Canonical pushing a free open-source platform and here’s RIM unable to field something comparable even given an example from the market, and given a profit motive of such magnitude it borders on desperation.  Come on!

Comcast, whose quarter showed it’s still shedding video customers to competitors, is expanding its alliance with Verizon’s wireless unit to a total of 10 areas.  These are NOT the geographies where FiOS competes with Comcast, not surprisingly, and the whole thing could fall apart if the FCC doesn’t approve the spectrum part of the deal.  I doubt it will fall apart; Verizon has little to lose by working with Comcast as long as it doesn’t step on FiOS, and certainly Comcast needs to be able to promote bundled services including wireless against AT&T, a competitor to both firms.

Comcast has lost video subscribers for five or six quarters now, but the biggest reason may not be competition.  My data says that the problem in the video space is that more and more young adults are still living at home for economic reasons, and this reduces the number of “adds” for cable service.  Since there will always be some subscribers who die or move, the total number will drop unless new ones come in to replace the losses.  I think that the broadband data supports this conclusion too; older families who don’t “need” faster Internet may be induced to get it if Junior/Sis comes home from college and sets up residence in his/her old room.  There’s still no reliable data to show that cord-cutting as an affirmative step is impacting cable companies.

Speaking of cutting the cord, there’s a lot of buzz in the streaming video space on whether Hulu might be changing its whole business model.  The problem, so I hear, is that a lot of Hulu’s TV network partners have decided that TV Everywhere is going to be…well…EVERYWHERE.  As I’ve pointed out in the past, streaming video commercials earn so much less than broadcast linear commercials that networks can’t afford to have the former substituted for the latter.  However, supplementing them is fine.  The problem Hulu’s model creates is that you don’t have to be a linear subscriber, so for the networks Hulu creates that risk of moving customers from the profitable to the starvation model of ads.  Thus, these networks are telling Hulu that they don’t want their video served to viewers who don’t have the channels as part of their broadcast subscription.  Thus, Hulu would no longer be a force for cutting the cord.  Which it never was for those who are realistic.  This is proof that TV Everywhere is the only thing that matters in streaming video.


Three Almost-Revolutions?

Today, I want to offer three examples of stuff that could be revolutionary but on the other hand could become a yawn.  They illustrate how complex this market has become, and how delicate the balance is between a romping success and an embarrassing failure.  The order here isn’t significant!

Broadcom launched a 200G switching chip that could be an element in the opening salvo for startup or at least new-entrant competitors in the data center and cloud switching market.  The fact that the company had previously announced a 100G network processor means that Broadcom can now supply the chips needed for a cloud switch based on the OpenFlow standard.  Interestingly, that particular slant isn’t being talked about much.

In an OpenFlow switch, all you really need to have is a forwarding table and some lightweight logic to frame control-plane exchanges when a packet is presented that doesn’t have an entry.  Thus, you could build a pretty big fabric with a bunch of fairly dumb chips.  Since OpenFlow doesn’t have any discovery (no spanning tree for example) you can drop the distinction between ports and trunks in a functional sense.  The use would determine the classification, in short.  You could have any number of transit options exiting a switch, any level of meshing.  This could create flatter topologies without requiring a single fabric or virtual switch.

This is the real risk or value (depending on whether you’re a vendor or user, respectively) of OpenFlow.  In my view, too much time is being spent talking about OpenFlow and SDN as a supplement to current switching/routing.  There’s not enough room there to add value; it’s another tunnel protocol in essence.  The question is whether somebody (or somebodies) will deploy OpenFlow switches in applications where connection control is more important than adaptive discovery.  That will be true inside CDNs, inside clouds, inside data centers.

Another story of maybe-revolution is coming from RIM, who is rumored to be prepping a position more reliant on HTML5.  Such a move could have a couple of advantages for RIM, foremost being that it could be played against the big incumbents in the mobile space, the very people who have unseated RIM from its former smartphone high chair.

Which is where the cloud comes in.  I still believe that the real winning position in the mobile broadband world is the behavioral apps hosted in the cloud.  RIM has mail server capability that could in theory be broadened to hosting, and hosting plus HTML5 could create super-apps that would run in smartphone, tablet, and even PC browsers.  Might that be enough to save RIM?  It might have been six months or more ago; it may be too late now.  Nothing short of naked aggression in deployment and positioning of this sort of story will get them back on track at this late date.

Finally, IBM’s Mobile Foundation portfolio is a fairly sophisticated approach to integrating appliances into business operations and building next-gen applications that couple worker and IT in a totally different way.  I’ve pointed out before that the value of the cloud doesn’t lie in doing what we already do in a cheaper way, but in doing what we can’t now do but would like to do.  Obviously there’s a hosting/applications dimension to this, but also an appliance dimension.  That’s what I think Mobile Foundation is.

The heart of Mobile Foundation is a developer environment that lets people write apps that can be ported without change across the range of popular enterprise mobile platforms (Apple, Android, RIM), but the Foundation also includes tools to integrate the mobile apps with current IT and with the cloud.

The thing that makes what seems to be a clearly strategic idea into something that could be much less than that is the fact that IBM links this stuff to the tired old media buzz-concepts rather than the notion of mobile/behavioral empowerment (where it belongs).  They talk about BYOD (old), they talk about how two-thirds or some number of enterprise CIOs want to do more with mobile (older) but they blow by the whole notion that business process re-engineering starts where the business meets the IT process, which is the worker who’s out in the world.

Ten years ago, the real stories behind these maybe-stories would have been shouted by vendors, media, and analysts from the rooftops.  Why not now?  Until we answer that, we won’t understand how to create an IT revolution or a network revolution, so we’ll only have one by blundering into it.