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Intrinsec’s Insights: 2017’s Technology Landscape?

by Intrinsec | November 25, 2016 | Research

Last night I was reading an article that focused on Cisco, and it specifically warned readers of the potential troubles they might face for the foreseeable future. While I won’t summarize the entire article, I will share a few specific quotes that seem to suggest how the technology landscape is making secular changes and the “old technology” companies are suffering as a result.  This information should be seen as a canary in the coal mine for those with careers in the ever changing environment.

To get started, I’m going to take a couple of excerpts from the Wall Street Journal to drive home my points…

Cisco’s charges in the first quarter largely stem from a plan announced in August to shed 5,500 employees, 7% of its workforce — in the latest of a series of responses to market shifts that include customers opting for software and services over hardware.”

And

Challenges facing Cisco include a preference among some web companies and network operators to avoid big-name hardware vendors. Some customers are choosing to run networking software on inexpensive commodity-style switching systems from vendors such as Taiwan’s Quanta Computer Inc.”

What do the above quotes scream?  Software Defined Networking (SDN) and Network Function Virtualization (NFV) is eating away at the dominant position Cisco had in networking.  No longer is there a homogeneous ecosystem required in the datacenter.  Cheap and replaceable equipment is now being pointed to as the way to go in large datacenters. But that’s not all…

Revenue from switching hardware, Cisco’s largest business, declined 7%. Routing revenue rose 6%.”

Interesting…. So internal gear sales have dropped while gear required to get OUT of the internal network has risen. While there can be a number of factors to explain why this is happening, I wonder if the main factor has something to do with the following quote?

Others are turning to external cloud services rather than buying and managing their own computers and networking devices.”

Ya, that’s right.  More and more cloud is becoming the default go-to for applications and all services.  Will this mean the end of Cisco?  No–not even close.  However, don’t think that Cloud Service Providers (CSPs) are going to return to buying gear from large providers again.  The large CSPs are becoming their own hardware suppliers for everything from storage through to networks and servers.  Partially because the scale of gear required justifies the cost of developing hardware in-house and such hardware can be purpose built, a huge benefit when you have over 1 million accounts all consuming roughly the same thing.

So how can this information be actionable?  What can you do to capitalize? You need to start looking at taking that next step and start learning about the next big things that are no longer on the horizon – they’re here now.  Perhaps you should consider future proofing your career in 2017.  Networking folks should be looking into the security aspect of SDN/NFV.  Security Architects should be looking into micro segmentation.  Engineers will want to dive head first into Continuous Integration/Continuous Deployment (CI/CD).  Risk Management folks should be getting certified in CCSK and/or CCSP.

Oh, one more thing:  I feel compelled to state that am not advising you on CSCO stock or any other investment!

 

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