Archive for Networking

Whats Up With Cisco?

Whats Up With Cisco?What is up with Cisco? Their fiscal results for the recently closed 2017 Q3 showed revenue of $11.9 billion, a 1% decline in revenue, compared to the same quarter last year. This is the 6th consecutive down quarter. The networking goliath also issued downward guidance for 2017 Q4. They estimated a revenue declines of 4-6% year-over year.

Cisco logoOn the earnings call, Cisco CEO Chuck Robbins blamed several factors for the lower guidance. He cited:

  • “a pretty significant stall right now” in the U.S. federal public sector
  • Service provider revenues were down in Mexico.
  • United Kingdom business is being dampened by currency issues.
  • Middle East, there is “pressure… relative to oil prices.”

Then there are the layoffs. Cisco buried the announcement in a footnote in the company’s SEC 8-K report that 1,100 more layoffs are coming, on top of the 5,500 announced Layoffsin August 2016.

In May 2017, we extended the restructuring plan to include an additional 1,100 employees with $150 million of estimated additional pretax charges.

According to SDXCentral, the Cisco CEO stressed several times on the earnings call, that the company is transitioning to more software and subscription-based business. He declared,

I am pleased with the progress we are making on the multi-year transformation of our business.

These weak fiscal results and the move to a subscription-based business have led to speculation about what the Cisco business will look like in the future. TechTarget speculates that Cisco may go so far as to separate the Network Operating System (NOS) from the hardware. They contend that such a move would be a dramatic departure from Cisco’s traditional business model of bundling high-margin hardware with its NOS. The author believes that market trends will likely force the vendor to release an open NOS.

Cisco Catalyst 3750-E.TechTarget cites reports from the The Information that a hardware-independent NOS called Lindt is coming. Reportedly Lindt will run on a white box powered by merchant silicon. According to the article, a number of market trends are driving the move to a hardware-independent NOS.

The first market trend forcing Cisco to release a hardware-independent NOS is the company’s declining dominance of the Ethernet switch market. Since 2011, the company’s share has dropped from about 75% to less than 60% last year, according to the financial research site Trefis. The decline is important to Cisco’s bottom line because switches accounted for 40% of Cisco’s product sales in 2016, 30% of net revenues and 20% of the company’s $162 billion valuation, Trefis reported.

Infrastructure as a ServiceCisco’s weakening performance in switching is tied to the second market trend forcing Cisco to release a hardware-independent NOS. It’s customers are turning to public cloud providers, such as Amazon (AMZN) Web Services, Microsoft (MSFT) Azure and IBM (IBM) SoftLayer, for their IT infrastructure. The more enterprises subscribe to infrastructure as a service, the less networking gear they need in their data centers.

The shift to cloud providers is found in the latest numbers from Synergy Research Group. Revenue from public cloud infrastructure services is growing at almost 50% a year. In the fourth quarter of last year, revenues topped $7 billion.

Cloud providersThe third market trend forcing Cisco to release a hardware-independent NOS is the trend where enterprises that were Cisco’s largest customers are joining cloud providers in building open networking hardware and software to replace inflexible proprietary systems that lock them to a vendor. Those companies include large financial institutions, like Bank of America, Goldman Sachs and Fidelity Investments, and communication service providers, such as AT&T (T), Deutsche Telekom and Verizon (VZ).

The technology shift is driving an enormous amount of spending on IT infrastructure. Worldwide spending on public and private cloud environments will increase 15% this year from 2016 to $42 billion, according to IDC. Meanwhile, spending in Cisco’s core market of traditional infrastructure for noncloud data centers will fall by 5%.

Arista NetworksWhile Cisco is ignoring the trend away from proprietary hardware, the article says Cisco’s rivals are embracing it. Juniper Networks (JNPR) and Arista Networks (ANET) have released a version of their NOS for white boxes favored by cloud providers and large enterprises. Both companies reported year-to-year revenue growth in switching last year. Even Cisco’s patent lawsuit against upstart Arista was set-back by the courts.

Rohit Mehra, an analyst at IDC hypothesized that Cisco’s resistance to change is likely due to fear that giving customers other hardware options would accelerate declining sales in switching. “There would be potentially some risk of cannibalization in the enterprise space,” he added.

Cisco insists its customers are not interested in buying networking software that’s separate from the underlying switch. The Cisco spokesperson told TechTarget:

Cisco insists its customers are not interested

The vast majority of our customers see tremendous value in the power and efficiency of Cisco’s integrated network platforms, and the tight integration of hardware and software will continue to be the basis of the networking solutions we offer our customers

TechTarget adds that Cisco doesn’t say the article is wrong. Instead, the company falls back on a corporate cliché for refusing to discuss a media report. “We don’t comment on rumor or speculation,” a Cisco spokesperson said.

The networking market is evolving away from the hardware that Cisco depends on for much of its valuation. Cisco will resist changing its market approach for as long as possible. But in the end, the company will have to become a part of the trend with an open NOS capable of running on whatever hardware the customer chooses.

Mergers and acquisitionsRather than change its model for selling networking gear, Cisco has spent billions of dollars on acquisitions over the last few years to create software and subscription-based businesses in security and analytics. But Cisco’s software push has yet to pay off with 5 conservative down quarters.

Finally, Cisco just recently patched a flaw in IOS software that affected more than 300 models of its switches. Despite issuing an advisory on March 17, Cisco did not release the patch for this vulnerability until May 8, 2017. The Cisco vulnerability was part of the Vault 7 WikiLeaks dump of alleged CIA hacking tools.

Alleged CIA hacking toolsThe vulnerability, rated a critical 9.8 out of 10 by the Common Vulnerability Scoring System, is in the Cluster Management Protocol, or CMP. could allow a remote, unauthenticated attacker to reload devices or execute code with elevated privileges. This vulnerability can be exploited during Telnet session negotiation over either IPv4 or IPv6.

Related articles

Ralph Bach has blogged from his Bach Seat about IT, careers and anything else that catches his attention since 2005. You can follow me at Facebook and Twitter. Email the Bach Seat here.

Limes in Your Data Center

Times are changing in the data center. For decades data centers were wired with orange multi-mode fiber optic cable. MMF is the choice for the date center connections because it is smaller and faster than copper and cheaper and more forgiving than single mode fiber optic cables typically used for long haul transmissions. The orange flavor of MMF was pulled into data centers to deploy Gigabit Ethernet.

Multimode fiber optic cableThis type of MMF would work with links up to 600 meters. MMF uses the 850 nm and 1300 nm wavelength to transmit data. The typical MMF is 62.5/125 µm which means it has a core size of 62.5 micrometres (µm) and a cladding diameter of 125 µm, OM1 (“OM” stand for optical multi-mode). A second generation of MMF is 50/125 µm (OM2). These cables used LED transmitters. Newer installations often used laser-optimized 50/125 µm multi-mode fiber (OM3). MMF that meet this designation have enough bandwidth to support 10 Gigabit Ethernet (GigE) up to 300 meters.

10 GigE is a great technology, but many organizations have outgrown it. New variants of Ethernet can reach speeds of 25 Gbps, 40 Gbps, 100 Gbps and soon, up to 800 GigE is needed to keep up with the new requirements of enterprise and cloud data centers.

Data centerThe industry determined that a new type of fiber was needed to physically pass the bits back and forth at these new speeds and yet maintain backwards compatibility with older installations. In October 2016, the international cabling standards development body International Organization for Standardization/International Electrotechnical Commission (ISO/IEC) decided that the new standard would be called OM5.

Cabling Installation & Maintenance magazine reports that the new OM5 standard was developed to meet the increasing bandwidth demands but maintain compatibility with older MMF installations, “The standard specifies 50/125-micron laser-optimized fiber that is optimized for enhanced performance for single-wavelength or multi-wavelength transmission systems with wavelengths in the vicinity of 850nm to 950nm.”

Multimode fiber optic cableSr. Fiber Product Manager at Legrand Randy Harris, explained that OM5 fiber is a new type of 50 micron core, laser optimized multimode fiber (LOMF) designed to provide better performance for applications using wavelength division multiplexing (WDM). It operates over a wider window in the range of 850nm to 953nm to support at least four wavelengths. Swiss-based cabling provider R&M says OM5 fiber-optic cabling supports duplex transmission by sending four wavelengths over a single multimode fiber to create future bandwidths up to 200 Gbps.

Cindy Montstream explained in an article published in Cabling Installation & Maintenance magazine in September 2016,

The 40 GE SWDM4 and 100 GE SWDM4 specifications support transmission over duplex OM3, OM4 and OM5 multimode fiber types. Maximum reaches vary from 75 to 440 meters depending on data rate and fiber type. The group added that in the future, SWDM technology could be leveraged to enable 200-, 400-, and 800-Gbit/sec Ethernet traffic on multimode fiber cabling as well.

LimesIn June 2016, a Telecommunications Industry Association (TIA) TR-42 subcommittee approved the new standard, which specifies wideband multimode fiber. In February 2017, the TIA TR-42.12 Optical Fibers and Cables subcommittee approved lime green as the OM5 jacket color. At that time it also approved a project to develop Addendum 2 to the TIA-598-D standard.

The evolution of Ethernet is driving changes in the data center. The IEEE has developed a couple of new standards for Etherntet, which I wrote about here. The new standards include IEEE 802.3by, which covers 25 Gb/s switch interconnects for data centers.

In well done cable installations cables can be distinguished by jacket color:

  • Orange jackets indicate legacy 62.5/125 µm (OM1) and 50/125 µm (OM2) fiber-optic cabling
  • Aqua jackets show 50/125 µm “laser optimized” OM3 and OM4 fiber fiber-optic cabling
  • Lime-green jackets  50/125 µm “laser optimized” OM5 fiber-optic cabling
  • Yellow jackets indicate single mode fiber-optic cabling

It took decades to install all the orange old-school MMF, it is going to take several more decades to get it all uninstalled.

Ralph Bach has been in IT for a while and has blogged from his Bach Seat about IT, careers and anything else that catches his attention since 2005. You can follow me at Facebook and Twitter. Email the Bach Seat here.

Who Owns Ruckus Today?

Who Owns Ruckus Today?Ruckus Wireless was founded in 2004 and supplied Wi-Fi services and equipment to enterprises and service providers. At its peak, it had annual revenues of almost $400 million and more than 1,000 employees. Ruckus was the first firm to roll out enterprise 802.11ac Wave 2 AP. The company’s products powered high-profile public Wi-Fi installations, such as New York City’s LinkNYC.

Ruckus WirelessIn April 2016, San Jose, CA-based Brocade  purchased Ruckus Wireless in a deal worth about $1.5 billion. Brocade is most famous for data center SAN switches and a player on the NFV and SDN scene. Brocade planned to add Ruckus’s Wi-Fi products to its enterprise networking business.

At the time of the purchase, Brocade CEO Lloyd Carney said, “The acquisition will strengthen Brocade’s ability to pursue emerging market opportunities around 5G mobile services, Internet of Things (IoT), Smart Cities, OpenG technology for in-building wireless, and LTE/Wi-Fi convergence,”

BrocadeRuckus changed hands. Irvine, CA based chip maker Broadcom (AVGO), which supplies to phone vendors purchased Brocade for $5.9 billion. But the chipmaker said it plans to divest the Brocade IP networking business that consists of wireless networking, data center switching and software networking offerings.

Brocade CEO Lloyd Carney wrote on the company’s website. “In terms of our IP Networking business, due to competitive overlap with some of Broadcom’s most important customers, Broadcom will seek a buyer for the business.” The Ruckus product line competes with industry titans like Cisco and Apple.

BroadcomBroadcom CEO Hock Tan said in a press release, “… we will find a great home for Brocade’s valuable IP networking business that will best position that business for its next phase of growth.” It seems Broadcom has found a firm willing to take Ruckus off their hands.

FierceCable is reporting that cable set-top box manufacturer Arris (ARRS) is in talks with Broadcom to pay around $1 billion for Brocade’s wireless network edge business – i.e Ruckus Wireless. The article says Arris CFO David Potts told investors that the vendor might transition into serving the wireless needs of its customers. Arris client, Comcast is developing a wireless service based on its MVNO relationship with Verizon.

cable set-top box manufacturer Arris Reports are that Arris does not want  to buy other parts of the business being divested by Brocade. Brocade is reportedly looking for a buyer for the rest of their IP portfolio, which includes data centers, switching and software.


Ralph Bach has been in IT for fifteen years and has blogged from his Bach Seat about IT, careers and anything else that catches his attention since 2005. You can follow me at Facebook and Twitter. Email the Bach Seat here.

Avaya Goes Chapter 11

Avaya Goes Chapter 11-Updated- 03-07-17 As predicted Avaya spun off its networking business. The lucky winner is Extreme. The presser from Extreme is here.

In one of the worst kept secrets in tech, Avaya has finally declared bankruptcy. The Santa Clara, CA-based communications company filed for chapter 11 protection on January 19th 2017 in the U.S. Bankruptcy Court for the Southern District of New York. Reports are that Avaya faced an end of January deadline to reach agreements with creditors to address its $6.3 billion debt or potentially default.

Avaya Goes Chapter 11The company’s presser announcing the bankruptcy characterizes the decision to seek Chapter 11 as a necessary re-do on deals made a decade ago. The company was spun off from Lucent, a former AT&T unit, in 2000. Avaya went private in 2007 when private equity firms Silver Lake Partners and the Texas Pacific Group took over the firm for $8.2 billion. Avaya was set up as a leveraged buyout – loaded with debt. At the time the new owners said going private would help Avaya to accelerate product development. In 2009 Avaya scooped up the remnants of Nortel for $900m.

The Nortel acquisition added Ethernet switching and VoIP to Avaya’s portfolio. While the move added needed hardware to the Avaya portfolio the rest of the tech world started the shift towards software-as-a-service and the cloud. Avaya was not able to digest Nortel while taking on Cisco, Microsoft and the cloud at the same time.

$6.3 billion debtAvaya was both late with VoIP and Unified Communications. Neither Microsoft nor Cisco were competitors in the TDM/PBX era. Cisco joined the race with VoIP and Microsoft then came along with Unified Communications. Both have tremendous enterprise penetration and brand recognition.

The pressure forced Avaya to consider selling it’s crown jewel, its contact center products to Genesys in 2016, in the hope it would raise some cash. When the deal with Genesys fell through, Avaya decided to file for bankruptcy. Avaya CEO Kevin Kennedy said in a statement, “…chapter 11 is the best path forward at this time.

In order to keep the lights on during the reorganization, the company has secured a $725 million loan underwritten by Citibank.

As part of its debt load, Avaya owes its pensioners $1.7 billion unfunded pension liabilities. According to NoJitter Avaya will honor it obligations to maintain and continue the pension (as did GM in its reorganization).

Chapter 11 only impacts Avaya’s United States operations. In the rest of the world the company is moving to assure customers and stakeholders that it’s business as usual.

My experience is that the Avaya IP Office product is way over-priced, even in a bid environment. Why would anyone buy an Avaya Ethernet switch or access point when you can get a Cisco or an HP?

So what is to become of Avaya? One likely case is that all of business units will be sold off to satisfy the creditors. The only thing left of Avaya will be a service organization to care for the huge installed base of orphaned Nortel and Avaya systems.

I know people are already getting calls from Cisco about replacing Avaya.

Ralph Bach has been in IT for fifteen years and has blogged from his Bach Seat about IT, careers and anything else that catches his attention since 2005. You can follow me at Facebook and Twitter. Email the Bach Seat here.

Linux Turns 25

Linux Turns 25Linus Torvalds released the first Linux operating system kernel on Oct. 5, 1991. On Oct. 6, 1991, Torvalds began arguing with volunteer developers who would go on to make Linux an open-source powerhouse and eventually a household name. Today the Linux community is upwards of 86 million users strong.

Linux Turns 25As part of celebrations to mark Linux’s 25th birthday the Linux Foundation has published its annual Linux Kernel Development Report (PDF reg required). According to the Register, the report concludes that Linux is in great shape, “There may be no other examples of such a large, common resource being supported by such a large group of independent actors in such a collaborative way.”

The independent actors have a lot to collaborate on. The report notes that the first versions of the Linux kernel comprised about 10,000 lines of code. Now it’s nearing 22 million and growing at a rate of 4,600 lines a day.

Wall StreetWhile Linux may have started out as a hobby OS, that changed in the early 2000’s. At the turn of the century, Wall Street banks demanded Linux support for their enterprise application servers says Tech News World.

“That was a moment that broke down resistance to Linux in the big IT vendors like BEA, IBM and Oracle (ORCL). That hole in the dam was the start of a flood,” said Cloud Foundry CEO Sam Ramji. “Today Linux is the home of operating system innovation.”

LinuxAporeto Virtualization Expert Stefano Stabellini, who has been a Linux user and open source advocate since the 1990s explained the transition. “… back when I started with Linux in the ’90s … [companies] did not understand it. They thought that open source was unsustainable, and Linux was niche and hobbyist.” He says that now everything has changed. Every company has an open source strategy now. “Microsoft (MSFT) was the biggest foe and now is a strong ally. Linux is the most widely adopted operating system of all times.

Dice points out that the most active contributors to the growth of Linux have included (in descending order) Intel (INTC), Red Hat, Linaro, Samsung (005930), SUSE, IBM (IBM), and various corporate consultants. Google (GOOG), AMD (AMD), and Texas Instruments (TXN) also ranked in the top 15.


So my first pass at Linux was Red Hat Linux 5.0. when Novell bought into Linux. Yeap I was a Novell CNE 5 way back in the day.

The last couple of projects I have been involved with have used Linux and not Windows, CMS, IVR, PAFW’s and storage.

Ralph Bach has been in IT for fifteen years and has blogged from his Bach Seat about IT, careers and anything else that catches his attention since 2005. You can follow me at Facebook and Twitter. Email the Bach Seat here.