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[XGNews]: Behind the job hopping of Cisco’s Network Department boss: the transformation of old giants is facing a painful period

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The following is the [XGNews]: Behind the job hopping of Cisco’s Network Department boss: the transformation of old giants is facing a painful period recommended by xgapn.com.

News on March 18 (Andy) Cisco, which is in the throes of transformation, has been poached recently. David goeckeler, who previously served as executive vice president and general manager of network and security business of Cisco, recently transferred to Western data company as CEO.

David Goeckeler.

As a meritorious veteran who changed Cisco’s network and security business strategy, transformed to software mode, and worked in Cisco for nearly 20 years, why did David goeckeler choose to leave Cisco at this time? In the face of comprehensive cloud, 5g, AI and other new technology trends, what changes has Cisco made? What about the future?

Poor performance, traditional advantage product revenue decline

As the leader of Cisco’s network and security business, the departure of David goeckeler has something to do with Cisco’s poor overall performance, especially the continuous downturn of its network and security business, and the continuous rise of Huawei and other competitors.

According to the financial data of the second quarter of fiscal year 2020 released by Cisco not long ago, the net revenue of Cisco in the second quarter of fiscal year 2020 was 12.005 billion US dollars, down 4% from 12.446 billion US dollars in the same period last year. Cisco also expects revenue in the third quarter of fiscal year 2020 to drop by 1.5% to 3.5% from $13 billion in the same period last year,

The service provider (SP) router and carrier Ethernet switch products that once made Cisco superior to others for many years are also disappointing. In the second quarter of fiscal year 2020, the sales volume of Cisco products (including routers and switches, etc.) was US $8.671 billion, down 8% compared with us $9.273 billion in the same period last year; by product, the revenue from infrastructure platform business of Cisco in the second quarter was US $6.528 billion, down 8% compared with the same period last year.

Lose the laurel, the competitor rises strongly

And the first time in the telecom market lost laurel, is to give Cisco a heavy blow. According to the latest report of router and operator Ethernet switch in the fourth quarter of 2019 released by the market research company Dell’Oro group, the revenue of router and operator Ethernet switch market of global service providers dropped sharply by 7% in the fourth quarter of last year compared with the same period last year, while it only increased slightly by 1% in the whole year of 2019. Huawei and Nokia made a landmark achievement in the fourth quarter of 2019. The two companies respectively occupied a leading position in the global SP router and operator Ethernet switch Market and SP edge router market. This is the first time that Cisco has not become the number one supplier in these two fields.

At that time, the global router, switch and other network equipment market was almost controlled by Cisco, and now it will give way to the market “crown” which has been worn for decades. At the same time, one of the most important reasons is the strong rise of competitors.

According to the global router market share report of 2019 recently released by Market Research Institute omdia (formerly IHS Markit), Huawei’s router products rank first in the global market share of operators. This is the first time that Huawei router’s market share in the field of global operators reached the top in 2018, and it will continue to maintain the first market share in 2019.

Among them, in the field of backbone routers, Huawei has maintained the first market share in the world for three consecutive years. What is more worth mentioning is that in the field of metropolitan area routers, Huawei has also jumped to the first in the world for the first time, thus achieving the full dimensional leadership in the overall and subdivided fields of operators.

Transformation and change: new strategies and new products need to be verified by the market

In fact, in the face of aggressive competitors, Cisco is not waiting to die, but also actively changing, embracing open source and software, launching new products and new strategies.

In the face of more and more enterprises giving up building their own private network and turning to cloud services, the network equipment market such as switches and routers, which used to be the cornerstone of Internet development, has encountered new challenges in market space and technical architecture. Cloud, software, open source, automation and intelligence have become the general trend.

To this end, Cisco not only acquired many cloud service manufacturers, but also put forward the “Internet for the future” strategy. At the end of 2019, it launched a new silicon one chip and a new product family Cisco 8000, which let the industry see Cisco’s determination to embrace the cloud era.

Among them, Cisco silicon one is “the first single and unified silicon architecture in history, which can serve anywhere in the network and can be used in any form”; Cisco also launched the 8000 Series carrier grade router for the first time, which is the first batch to carry silicon one chip and Cisco’s new IOS These devices are designed to reduce the cost of building and operating large-scale networks, so as to run 5g data, video, cloud and other digital applications and services. Subsequently, Cisco’s new strategy was supported by some operators and ultra large scale cloud service providers.

However, some people in the industry believe that silicon The positioning of one chip is large capacity and low cost. It needs to integrate the design of frame, box and switch in a limited chip area. It seems that it can not only meet the Ott manufacturers’ demand for capacity and cost performance, but also meet the operators’ desire for carrier grade chip performance. But can this product with both sides really meet the operators’ demand? Can Cisco seize the great opportunity of “5g + cloud + AI”? All these need to be verified by the market and time.

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