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Well, Juniper reported its numbers yesterday after the markets closed, and they booted their quarter and their guidance in a performance reminiscent of Cisco’s last quarterly call.  Nothing matched Street expectations, and the stock was down by 17% in the after-market.  Part of the issue may have been that the stock was actually up during the day, showing that the consensus view of the Street was positive.  The Street, writing yesterday, said “The company should continue to gain ground due to solid demand for its networking products- driven by growing network traffic.”

Earth to The Street; demand for routers is created by profitable carrier operation, and virtually all the major research firms have been saying that capex is now captive to monetization.  Juniper’s performance should not have come as a surprise; it didn’t to us.   Monetization means revenue, and revenue is driven by the higher layers of the network; services and wireless.  If you look at my most recen tsurvey data, which we’ve digested in detail in our Netwatcher journal in June, you see that Juniper’s challenge was simple; continued service-layer disconnect that created monetization disconnect.

CEO Kevin Johnson essentially acknowledged my point on the earnings call, noting that carriers were spending capex on the RAN.  Well, gosh, you can’t sell wireless services without radios, which is why RAN-level engagement is a higher-level engagement than pushing bit pipes.  Wireless is a key priority for operators in making more money, so Juniper is at risk by not having wireless components.  They could mitigate this problem only by focusing on the service layer.

The potential in Junos Space has never been realized.  Instead the company worked on developing operations tools built on Space, to play to a theme that seems to have arrived at Juniper with Kevin Johnson; Total Cost of Ownership.  The TCO push is one I hated from day one because it seems to admit that there’s nothing important about the network; it’s just a place where you minimize costs and hope for the best.  For a company that has prided itself—and rightfully—on engineering excellence, that seems not much short of surrendering your differentiation.

Ironically, Juniper just announced a new exec, Robert Muglia, formerly from Microsoft where he had broad experience with servers, developers, and the cloud.  Muglia will run the new Software Solutions Division.  Software, of course, is what the service layer has to be.  It’s what Space already is.  It’s what Juniper has needed to exploit since 2009 at least, to get a position astride at least one of the three key carrier monetization priorities (content, mobile/behavioral, and the cloud).  So this is good, right?  Maybe.  The problem is that in one interview, Muglia is quoted as saying that he’s excited about the job, which will involve the software that runs on routers to improve management.  Oh, no, this sounds like the old, tired, Juniper theme of Total Cost of Ownership!

Monetization isn’t about cost reduction, guys.  It’s about driving revenue up.  Even if the whole TCO thing was provable (which it’s not) the operators are first of all looking at the top line and second convinced that the best way to cut TCO is to buy from Huawei.  Their strategic influence, by the way, was UP by 14 points in the service layer (more than double), and up by five points in the IP layer (33%).  They were up in both in the last survey, while Juniper was down in both.

So now it’s Earth to Muglia time:  If your strategy for Juniper is to use software to manage routers better, then you’ve made a tragic decision picking Juniper over the other choices you talked about in your interviews.  And for Juniper, if you let that choice be made, then you have probably made a fatal decision.  So it’s time, RIGHT NOW, to prove otherwise.

 

 

Netflix has become the face of OTT video in terms of the opportunities and problems it presents, but the company now obviously has some challenges of its own to face.  The latest quarterly numbers for Netflix were actually very good; they beat analyst estimates handily.  The problem is the price hike they initiated recently, a plan that raises costs for some customers by 60%.  The stock was hammered in after-market trading and it’s off this morning in pre-market too.

I commented when the change was made that Netflix faces a problem common to all OTT video streaming plays, which is that they have to rely on getting content from others.  Everyone realizes that video and movies are a multi-tier distribution system, and that any time a new option is added it necessarily impacts the revenue stream of the others, particularly adjacent ones.  So streaming impacts DVD sales, sales of movies to TV syndication, and possibly even the “long tail” of the material, the latter by increasing near-term exposure.  Since all these channels compete, the price for content to stream is under pressure.  Netflix could at first pluck some low apples, but inevitably it will need to move closer to the high-value end of the chain where acquisition costs are the highest.

Another player who demonstrated a fall from grace was RIM, of course, whose PlayBook has been a market failure of the first order.  Some surveys show that “tablet” buyers rate Barnes & Noble’s Color Nook as highly, and that speaks volumes about a tablet from a player whose Blackberry smartphones were the darling of the leading-edge mobile world just a few years ago.  HP, now promoting its WebOS tablet line, is facing its own challenge; can any non-iOS, non-Android, tablet even gain traction today?

These two announcements are related in an important sense; the consumer market in tech is a tiger caught by the tail, and barely.  Everyone who finds consumer success does so in part at least because they were favored by public tides, and everyone in the market continues to be at the mercy of those larger-scale movements.  It’s the classic butterfly-flapping-in-Japan analogy, and there are some very big butterflies entering the market.

Amazon’s tablet is the one that has the greatest potential for disruption, both in the tablet space and in the video space.  Everyone has heard the rumors; the device will be big and pretty and Android—a true tablet.  The latest rumor is that it will also be less expensive, subsidized in part by ebook revenues.  Ironically, Apple may have created this monster itself by refusing to allow ebook reader apps to support purchases from the retailer’s own store directly; Apple wants their cut.  Nobody can pay 30% to Apple on the sale of an ebook; the margins are too thin already.  So Amazon will be a tablet player this fall, and B&N will certainly upgrade its Color Nook, at least in terms of Android functionality if not in terms of a new or higher-end model.  That generates a big new dynamic in the tablet space, particularly if the gadget is cheap.  Surveys suggest Amazon would be the most credible tablet player, in fact.

That then has a video impact.  Remember, Amazon has its own movie service, one that includes a massive number of free titles to Amazon Prime (free shipping for a modest annual charge) customers and a good selection of other movies.  While the service hasn’t caught on like Netflix, would a beautiful tablet help the penetration?  I think so.  And of course Amazon has a lot of ways to leverage its tablets beyond video.  Does Netflix then follow Amazon in becoming a tablet player?  You see the problem.  The model of Netflix is vulnerable to the pressure of giants like Amazon who can step beyond streaming into what you’re streaming TO, and then step again out of video into books, software, and a full retail product inventory.  That combination could even challenge Apple.

 

Financial analysts have noted that US carrier capex was soft in the first half, a trend that’s somewhat consistent globally, and also that there appears to be a shift of focus toward projects that are perceived as being direct revenue generators.  This information backs up our survey results, which have shown that monetization projects are seizing management attention at most operators and that it’s increasingly difficult to fund “upgrades” to networks where no improvement in ROI can be demonstrated.

The challenges of ROI aren’t going to be easy to meet, and nothing demonstrates that more clearly than the fact that very little has been done over the last year to meet them.  Operators have had monetization projects underway for almost four years at this point, and they’ve articulated their needs fairly clearly.  There has been little in the way of meaningful vendor progress, and we asked our survey operators why they believed that was the case.  Here are their top responses.

Number one on the list was that vendors are pursuing their own profit goals without regard for the operator business case. The second issue was that vendors lacked the understanding of the monetization problem and thus had no real idea of how to approach it.  The third view was that the problem lies outside the realm of the network; it’s IT’s problem to solve and networks are less relevant.  The final view is that the operators themselves are not prepared to plan and drive the projects, which means that they can’t really make the vendors do what’s needed because they don’t know what that is.

This last point is critical because it points out where we are today.  Operators need to improve ROI, period.  Until they can, capex is going to soften.  What’s at issue isn’t this basic truth, but rather the “how”, or maybe more accurately the “who”.  Are operators going to drive the projects, or force vendors to step up?  What seems to be the deciding factor is the timelines.  Most operators say that they have about a year max left on the mandate for their monetization projects, after which they either have to be into a trial or they need to get renewed executive direction and approval.  Most would admit privately that they don’t think they can drive at that pace without outside support, so unless vendors step up the mandates will expire.  I think that if those mandates DO expire, the OTTs will have won the service race decisively before the projects could mature, and networking will be forever commoditized.

 

 

And we thought Wednesday’s business-level announcements created tumult in the market!  Thursday was even more complicated, exciting, and potentially disruptive, and in addition may present even more widespread impact.

The story that Apple may buy Hulu is certainly the most disruptive of all.  Apple has been the major disruptor of the broadband market, by being the major driver of change in mobile broadband.  The company has also been the master of the “fenced garden”, the product ecosystem that’s closed enough to give Apple considerable control over leveraging all aspects of its revolutionary products without being blatantly anti-competitive.  So Hulu is clearly an intersection of these things, and to understand the problem it might pose we need only look at AT&T and Verizon, both of whom have reported.

AT&T and Verizon both demonstrated that their profits, revenue growth, and future depend not on wireline telephony, not on wireline broadband, but on wireless and television services.  The two companies gained in the last quarter totally on the strength of these two areas.  Apple could threaten both the areas, and at the same time, with a Hulu deal.  Where would Apple be likely to promote Hulu given Apple’s fenced-garden approach?  With iPhones and iPads, of course, but also with the hope of reigniting its Apple TV initiatives.  Mobile video not only generates more traffic for operators, it also represents a key element in any operator content monetization strategy.  If Apple, who is the largest single provider of appliances capable of delivering mobile video, launches its own approach it makes it much harder for the telcos to monetize video.  If Apple creates a strong multi-screen strategy around Hulu, i-stuff, and Apple TV, then there’s no real ground left for the telcos to attack.

But while Apple might logically push Hulu hardest within its chosen profit ecosystem, it can do other stuff too.  Hulu would almost certainly be added in some way to iTunes, even if the site also remained available independently.  That could promote iTunes more broadly for non-Apple users.  Apple could supplement the premium Hulu offerings with what it already has in the iTunes portfolio, too, and it would have more leverage to become a major provider of streaming video, and thus a major broad-level proponent of cord-cutting even for wireline users.  If Hulu does in fact become a foundation for a multi-screen approach, screen-switching could be added to Apple’s iCloud features, binding video and iTunes to the cloud.  Of course, Hulu apps would bind both to the iPhone and iPad.  Get the picture?  We have a growing media-based service complex.  We have what the operators hope to get with their own service-layer approach, but we have it quickly—which operators have been unable to realize.

Telco responses to cable competition were built around a simple principle; take the fight to the enemy’s homeland.  U-verse had one of its best gains ever in the last quarter, for example, and FiOS is a poster-child for telco TV.  Without these TV properties to value the access network, it’s hard to see how either company could sustain investment in consumer broadband—so it gets carried on a platform it could never hope to justify alone.  What then in the mobile space?  What’s the service that will make mobile profitable?  After all, telcos can’t expect at this point to become handset and tablet manufacturers to compete with Apple, so they can’t threaten Apple’s core base.  The truth is that services are all they have, their last hope.  The news yesterday only makes it crystal clear; without a service layer no access carrier can hope to show long-term revenue and profit gain.  There are no low apples left, only one high-flying one!

 

 

Tech earnings continue to give us some interesting data points, and possible contradictions, in the overall tech space and in the networking space.  We also had some M&A, so let’s get to it.

Intel beat Street estimates in both revenue and profit, largely on the strength of business purchases of PCs and servers.  It’s Atom chips, largely targeting the netbook space, lost ground because netbooks are being eclipsed by tablets, a form factor where Intel has essentially no presence at the moment.  Server chip growth was the brightest spot, which shows that IT investment and data centers are getting some corporate attention.

Intel’s challenge is obviously the tablet and smartphone space, where the company has been investing to create a position.  The difficulty Intel faces is that it’s behind the curve here, having not predicted the smartphone craze and not predicted that smartphones were a leading-edge indicator of a broader network-appliance model of consumer electronics.  Yes, Intel can get positioned for the mainstream of the appliance market, but it will miss the opportunity to get in on early higher margins and also the opportunity to make itself a default brand, as it has with the PCs.

Related to Intel’s success was a decent quarter from F5, the company that is most identified with “data center networking” in our surveys, more even than Cisco.  F5 shows the value of specialization, but it may also be showing its downside because the pace of growth for the company appears to be slowing.  One reason may be that the data center network implications of virtualization, server consolidation, and the cloud appear to come in a kind of “wave-then-eddy” form.  First, the enterprise re-architects to create a flattish structure that can do load balancing and fail-over.  Then, as server count grows, it populates more of the devices with ports to accommodate the new devices.  The biggest revenue kick comes in that initial phase, and for the markets F5 has focused on (financial, government, etc.) the initial phase is now passing.  The company’s more limited product scope and sales presence makes opening new verticals more of a challenge.  They may be indicators of the issue Juniper will face with its QFabric product set, as that rolls out late this year; the old verticals may not be the best ones by that time.

Dell’s decision to buy Force10 to create its own networking product line to augment/replace OEM deals with Aruba, Brocade, and Juniper raises even more interesting data center issues.  It’s pretty clear that HP and Cisco are driving this particular decision; both companies offer networking and servers and thus a stronger and broader portfolio solution for the data center.  Buyers, more than ever, want to move into a major data center restructuring with a single player providing the critical tools.  For Dell, a purchase of Juniper would be unlikely; too much of the latter’s value is in the carrier space where Dell has less presence and focus.  Brocade’s storage products may be seen as contaminating that particular potential acquisition, and Aruba was likely not seen as a broad enough strategy.  Thus, Force10.

Obviously this raises questions about what IBM will do.  IBM, like Dell prior to this deal, is competing with HP and Cisco with an OEMed networking portfolio.  Will IBM now do a buy?  If so, will they pick Brocade as a cleaner (and cheaper) data center play or opt for Juniper because the latter has a strong carrier position that would mesh well with IBM’s cloud strategy?  We don’t think IBM is under the same M&A pressure that Dell is because IBM has such strong account control and acknowledged integration skills.  It might want better margins on its networking, but it also likely doesn’t want to upset the momentum of the moment with an M&A that would alienate at least one OEM partner and potentially strand some existing and developing accounts.  I’m on the fence here, for now.

 

 

 

Apple reported truly astounding numbers for the quarter, with revenues up 82% and profits effectively doubling.  The numbers beat the Street handily and sent Apple stocks trading after hours at over $400 per share.  Apple’s upside was almost totally due to its iPhone/iPad products, with the Mac and iPod both underperforming estimates.  Given the economic pressure of the summer the numbers are a tribute to Apple’s positioning and marketing of its iOS products.

They’re also a demonstration of the growing power of the consumer and the appliance.  Apple’s total revenues are now approaching $30 billion.  That’s approaching Cisco’s numbers, folks.  It may explain why Chambers has been captivated by the consumer and appliance market, though the reorg this week makes it clear that he’s abandoned his hope there.  Apple’s success also creates dramatic evidence of a shift of power.  Even OTT giants like Google have to fear the Box, the device, and sustain a position in that space to protect their site incumbencies.  Advertising is shifting more dramatically to mobile as it becomes clear that mobile ads can better engage a consumer because there’s a better chance the consumer is in a position to execute on an ad-induced whim or decision.

I think that it’s also becoming clear that mobility is going to have a major impact on the cloud.  Because we have mobile broadband devices with us all the time, everywhere, we can build a dependence on what they can provide.  That induces everyone on the services side to experiment with providing more and more useful things through the appliance conduit.  Given that users of appliances aren’t really in a position to immerse themselves in an experience without being disconnected from their surroundings, that induces more “decision” and less “knowledge” in the focus of the stuff.  Apps became popular largely because mobile users didn’t find direct web searching convenient.

The next logical step in mobility is a play on a marketing tagline from the cloud space; “contextual intelligence”.  We all live on a timeline, with events around us creating behavioral and mood changes as we move through time and space.  When your appliance is a window on your “real” world, it has to be accommodating to those shifts, and that means making all sorts of correlations between who you are, who your friends are, where you are, and what you and your friends are all doing at the moment.  That’s the “context” of your moment, the situation that any ad or any request for information is linked to implicitly.  I’d argue that the major goal of mobile services in the future is to gather and exploit contextual intelligence, to take hints from all of the influences on the user to make the most accurate possible interpretation of a given request.

Apple is not only enabling this revolution, it’s arguably driving it.  Will iCloud embody contextual intelligence?  We’ll see.

 

A tale of two companies, and possibly an example of unfortunate timing as well.  Cisco yesterday announced it was laying off 6,500 workers, and IBM announced it was raising its guidance after having beat the revenue numbers expected by the Street.  Both companies ended the session yesterday off slightly, but the contrast here is interesting.

IBM, as I’ve often noted, has been a master of the twists and turns of the IT marketplace.  It’s been in, and out, of pretty much e very sector of the market in response to the changes in opportunity.  It’s managed to sustain its strategic engagement with its customers throughout all of this, and in our surveys since the early 1980s its strategic credibility has never varied by more than a couple of percentage points.

Cisco, interestingly, has gained as much on IBM’s decision to leave networking as it did on “the Internet”, maybe even more.  IBM’s networking equipment, supporting its new version of its venerable System Network Architecture (SNA) called Advanced Peer-to-Peer Networking, wasn’t price-competitive with IP and routing.  IBM knew it, and over time even sold its networking business to Cisco.  That’s what gave Cisco a big boost with the enterprise.  It’s the boost that Cisco needed to become what it was at its peak.

I’ve focused in the past on Cisco’s carrier moves, and in particular on the fact that the company failed to realize that traffic alone wasn’t going to drive carrier spending—they need revenue as much as Cisco does.  But in the enterprise space as well, Cisco didn’t read the tea leaves.  Enterprises came out of the SNA era of networking with a network infrastructure that needed more connectivity and more capacity, in part because SNA networking was expensive.  When they transitioned to Ethernet and IP, they boosted both these things based on the lower pricing, and as a result there was a boom in spending.  The addition of devices and applications through the peaking IT spending cycle of the ‘90s kept up the pace of growth.  It seemed that networking was on a roll.

It wasn’t, of course, it was on a cyclical upturn just like IT was in general.  We ended that upturn in 2001/2002, and for the first time in IT history the cycle didn’t turn up again.  The issue?  Lack of incremental productivity justification.  Service providers needed a business case to build out more capacity.  Enterprises did too.  The tea leaves were clearly readable by 2005, but Cisco missed the signs.  When they did realize the needed more justification for more spending, they hit on high-end telepresence.  Does that sound like the service-provider-space story that video is going to double (or more) network demand by such-and-such a time?

To be fair to Cisco, every one of its competitors has made the same mistake Cisco did.  The problem is that while those competitors can still hope to gain market share (particularly by taking share from Cisco), the market leader needed organic growth or greater market breadth—the “adjacencies” strategy.  Chambers was right to grab onto the latter because there was no quick way to drive the former.   But Cisco didn’t have the instant credibility in servers and other product areas, and they didn’t develop an effective strategy to develop those adjacent markets.  As a result, they’ve hit a soft patch in growth.  A big staff reduction will make the Street happy but it might well make the long-term problem worse.  The most mobile employees, the ones with the most experience and most marketable skills, may well have been among those who took the severance packages.

This should be a wake-up call for Cisco, of course, but even more so for its competitors.  Yes, they could be insulated from their own version of the revenue shortfall problem through gains in market share, but only if first Cisco doesn’t reinvent itself successfully and second no other competitor does a more effective job.  Remember that I’ve already noted that EVERY Cisco competitor (enterprise and service provider space) made the same mistakes.

 

 

Google+ continues to make news, with an admitted ten million subscribers in what’s still a closed trial and with buzz that’s enough to drown out competing reactions to the service.  There’s no question that Google+ is a true competitor to Facebook, and while Facebook is far from irrelevant we can at least see a path whereby it might become the next MySpace.  Twitter, of course, is in even greater jeopardy.

I think the big contribution of Google+ in social networking is the notion of “circles”, which is actually the way my open-source project ExperiaSphere does social communication.  A circle is essentially a community of personas, which are in turn virtual identities that people adopt for a given social context.  You behave differently as an employee versus family member versus casual friend, and what Google+ does is to let you define different sharing rules for each of these.  Presumably this discrimination of behavior by social role will extend into how you can manage communications through Google+ as well, though again that’s not yet clear.

Outside of the strict “social” world, the big question is whether social communications built around a social network can actually take hold and change the way that users connect to each other.  The chances of this happening through a vehicle like Google+ is enhanced because of the self-socializing nature of services like it.  People get onto social networks because their friends are there.   People communicate primarily among friends, so if you pull a friend pool into Google+ you create a community that likely involves much of your inter-calling.  In addition, Google can easily link Google+ with Google Chat, Voice, etc.  That means, for example, that they could allow you to out-call into the PSTN, in-call from the PSTN, and accommodate those who either aren’t on Google+ or who can’t currently respond to its own in-service communication.  That combination reduces the barrier to adoption that arises when users of a communication service find they frequently can’t use it to reach who they need to reach.

The implications of this are clear.  A major social communications shift, whether to Google+ or to Facebook/Skype, would reduce the value of voice services.  Many operators already offer data-only connectivity, and it’s very possible that users would drop their traditional voice or at least see it as having reduced value, encouraging a price war.  We would first see high-usage data plans coupled with low-minute voice plans, for example, instead of the current other-way-around practice.  That would impact carrier revenues quickly, and offloading text/SMS to social messaging would be even easier.

 

 

Google reported its numbers, and by any measure it had a stellar quarter.  Revenues were up 32% and they beat Street estimates across the board.  While the dark side of success will likely be greater anti-trust scrutiny for Google, it’s better than turning in bad numbers and seeing shares fall.  But for me, two non-financial factoids dominated the earnings call. One is that Google+ seems to be taking off, but the other is the Android sweep, and that’s the one I want to focus on.

First, Android is still going strong; last month it had 10% more device activations than the month before.  The Android store had over 6 billion downloads and there are over 400 devices licensed to run Android.  For those who, like me, remember the early PC-versus-Apple wars, the similarities seem obvious.  Apple even in those early days wanted complete ecosystem control, and IBM promoted an open platform.  The result is history; IBM PCs swept the market.  But Apple is still in the PC business, and IBM isn’t.  That raises what I think is the key question for Apple.  Is the best way to succeed in the long run to develop a new market, hunker down on a niche segment of it, and then milk that segment until another market comes along?  Or is it to develop a concept that sweeps the market, share in its success, and move on?

I think that everyone realizes by now, at least reluctantly and subliminally, that Apple is going to lose dominance in the tablet space and the smartphone space, and that Google will gain it.  Apple may be the BMW brand of both these device markets, but they’ll never lead them again.  But BMW makes some nice change, and that’s not necessarily a bad thing.  The badness might come in elsewhere though.

Ultimately, tablets and smartphones are our agents in the cyber-world.  What we do, what we get, what we want, where we are, and how we spend and even think are getting wrapped around the gadgets.  You win with those agents, and you win in that much larger behavioral space.  Apple “lost” the appliance race.  Did it also lose the agent race?  Maybe not.

Steve Jobs’ big mistake isn’t that he wants a closed ecosystem, but that he wants everything to be in that ecosystem.  Making it impossible for others to clone Macs became an obsession with Steve, and that meant surrendering the option to run Apple software on other systems.  What Apple needs to do to counter Android is to license iOS.  Or maybe…?

Maybe to establish the concept of the personal agent as residing in the network, the cloud.  “Hal” was disembodied, after all.  In modern terms, we don’t necessarily see a difference between a locally hosted intelligence and a local agent of a distributed intelligence.  The iCloud might become Apple’s Camel’s Nose under the Android tent.  Make it strong.  Make it accessible to every mobile device user.  Cut Android off from the larger, more enduring, food chain.  That’s Apple’s choice.  Accept another second-tier positioning, license iOS, or make iCloud the focus.  Think on it, Steve.

 

 

In yet another price change that angers customers, VMware announced a new pricing strategy for its vSphere 5 and the new pricing could create significant increases in license costs for some customers—as much as nearly 4x.  Our model suggests that the typical user will pay less than 20% more, but it’s pretty likely that the move is a response to a gradual saturation of the virtualization opportunity base.  Companies all over tech (and elsewhere, of course) are trying to earn more revenue and if you can’t grow your user base or add features, you have to increase pricing.

It’s hard to say whether the move will have a major impact on VMware’s market share.  Yes, companies could in theory adopt Microsoft’s or Citrix’s solutions, but they could have done that from the first and elected not to.  Will the price change be enough to change their minds?  If so, then why not adopt “free” virtualization from Microsoft or from an open-source provider?

I think it’s possible that VMware is looking ahead to a shift in virtualization growth—from success in the enterprise to success in the cloud.  Cloud adoption of virtualization is a service-industry application and VMware may be rightfully unwilling to subsidize someone else’s business model by sustaining a pricing policy that encourages an explosion in the number of virtual machines per host.  One could argue that enterprises who are most likely to be hit by the changes were ones doing relatively simplistic server consolidation to address an explosion in independent server deployment that should never have happened in the first place.

Cisco, at their Cisco Live event, announced some interesting enhancements to their UCS portfolio to address data center evolution and cloud computing.  While what they did in terms of capacity changes was again valuable in an evolutionary sense, their moves lacked the big strategic sweep that would have benefitted the company’s positioning.  There are two roles a company can play in the cloud; driver of the cloud or supplier to the cloud.  Cisco offered some credentials in the latter role, but it’s the former role that needs to be filled.  Remember, someone has to drive a strategic enterprise project.  Whoever does that will likely deploy all their own gear where they have it, and let the masses scramble for the scraps.  IBM, HP, and Microsoft are driving most of the cloud, and none of them are particularly friendly to Cisco’s interest.  Two have their own data center lines, in fact.

I think vendors are missing something important in the enterprise space, just as they are in the service provider space.  There was a time when network technology was almost a mandate; we knew we had insufficient connectivity to support optimum employee empowerment.  Today the low productivity apples have been picked, and companies need to understand the business value behind proposed tech changes.  Ten years ago, perhaps, the trade publications would have filled this need with long-ish insightful articles on adoption and benefits.  Today, all anyone wants to publish is a snappy title on a vapid article that elicits a click-through and generates ad revenue.  Nobody is offering the buyer the guidance they need, and so they move more slowly.