Barclays released a note on Cisco yesterday, based on an interview with David Ward, and there are some interesting comments and views, most of which I think are consistent with how I see Cisco’s evolution. The key point, I think, is that in a technical sense Cisco is moving to become a cloud company in order to be what CEO Chambers would call a leader in IT.
The cloud is the “cultural fusion” of networking and IT, and it’s a fusion that’s going to bleed opportunity and risk between the two in a number of ways. More IT power is going to undermine the role of purpose-built network devices, for example. But more network agility is going to re-frame the notion of how people use IT to deliver experiences—for work or entertainment. So Cisco is clearly spot-on if they do see the road to IT success being through the cloud. What I’m less sure about is whether Cisco had fully accepted the other truth, which is that SDN and NFV are relevant insofar as they support this cloud fusion. If you don’t fully grok SDN and NFV, you’ll never get the cloud right.
In the Barclays note, they correctly note that Cisco’s SDN strategy is very top-downish. If Software is going to Define the Network, says Cisco, then it’s the APIs that permit that to happen that matter and not the plumbing that brings about the stuff the software is asking for. By focusing on the APIs, Cisco has been able to frame the future of SDN as what could be a somewhat trivial technical evolution from current practices. That’s very appealing to those who have invested heavily in those current practices, which is why Cisco gets high marks for ONEpk in our surveys.
The thing that’s missing here is an explicit notion of the service model. I know you may think I’m harping on this, but the point is that if all software can ask a network to do is build an Ethernet LAN or an IP subnet, how are we really changing anything? Cisco has nailed the evolutionary part of SDN but has yet to seize on the revolutionary part.
The Network Convergence System is pegged by Barclays as Cisco’s door into revolution, which may be correct insofar as intentions are concerned. IMHO, NCS is aimed at creating the hardware platform for the cloud network, the platform that accommodates that bleeding of functionality from network into IT. Some of the accommodation is aimed at making the network more controllable under centralized SDN principles. Some is aimed at boosting the role of the network device in missions where the value of hosting versus embedding functionality isn’t all that strong. My model says that about 28% of current router spending is clearly suitable for a software-switch implementation, 34% is clearly not suitable, and the middle 38% (the largest piece of the pie) is up for grabs. If NCS can grab half of that Cisco holds on to most of the routing/switching value proposition.
What we’re left with now is the NFV piece, and I confess that Cisco’s approach to NFV is the one I have the least information about. Operators in my spring survey told me that Cisco had shared NFV thoughts in confidential discussions, but almost half those who had heard the story said they didn’t fully understand the position. To be fair, Cisco may have been a victim of NFV literacy; the standards process had at the time of the survey only just gotten off the ground (the first significant public documents came out today, in fact). However, even today there’s more visible of competitive NFV implementations (particularly Alcatel-Lucent’s which is public) than of Cisco’s.
The reason that having a good NFV strategy is important for Cisco is that NFV is the only movement toward orchestrating the cloud/network fusion that has any realistic chance of success. I don’t know how many people in the ETSI process would agree with this (many of the operators do, I know) but what NFV is about is really the provisioning of fused services. Yes, you can apply the principles to hosting virtual functions but you can also apply them to hosting anything that requires cloud deployment and network integration. A good NFV implementation is a great cloud foundation, and an unsurpassed framework for things like mobile empowerment.
Which, as you can easily see, is why Cisco needs to have one and why its competitors need one even more. Barclays says that NFV isn’t going to be a factor in the market until “at least 2015” but I disagree. Alcatel-Lucent already has announced CloudBand and though its features will in fact not be fully ready until 2015, it’s at least a proto-NFV. My own CloudNFV initiative is going to be available for public demonstration and lab deployment in December of this year (we can do some demonstrations of the data model and management processes now). We have three active integration projects for CloudNFV and five more under review. And while most of the NFV announcements made to date don’t pass the “un-wash” test of actually conforming to ETSI ISG NFV model requirements, we hear of new ones every day. The point is that this stuff is moving fast, and while Cisco may like being a fast follower, that still requires actual following at some point. Hopefully before the leaders are out of sight.
The TMF is also moving along. They’re putting important revisions to their GB922 SID model up for comment today, and these will be the first steps toward recognizing software, IT, virtualization, and the cloud explicitly in management standards. Some operators have already told me that they are less concerned about whether virtual functions can be deployed on servers than they are whether the whole resulting cooperative system can be managed—not just efficiently, but at all. Half the operators want to cast out the demons of past OSS/BSS and the other half say that OSS/BSS as it is must evolve to suit networking and the cloud as they will be. That’s another area where Cisco needs to be thinking, because a good management strategy from a competitor could hurt Cisco’s evolutionary plans, and most of Cisco’s competitors (excepting only Juniper, who just tightened their mobile alliance with NSN and may also be drawing on NSN management skills) have a better OSS/BSS story than Cisco.
Next week is the SDN World Congress, and what I’m most interested in seeing is whether the conference demonstrates progress toward recognizing the technology trinity of cloud, SDN, and NFV. If it does, then Cisco and everyone else had better get their act together. If not, we could still face a long period of buyer confusion and indecision, and a market with only listless movement.