Tag Archive for Amazon

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.

Who Rules the Internet?

Who Rules the Internet?Singapore based ISP Vodien published an infographic which lists the 100 highest ranking websites in the U.S. by traffic, according to website analytics company Alexa. There are over 1.1 billion websites on the internet, but the majority of all traffic actually goes to a very small number of firms. Seven companies control 30% of the top 100 web sites and the related web traffic.

100 highest ranking websitesNot surprisingly Alphabet controls the most popular sites on the web, Google and YouTube. Surprisingly, Microsoft controls the most sites in the top 100. Redmond controls seven of the top web properties including recently purchased LinkedIn, Bing and Microsoft.com. For a long time, MSFT’s online efforts were a disaster. That seems to have changed with Azure, but I still hate Bing. According to the Vodien infographic Alphabet controls four of the most popular sites.

The Visual Capitalist points out that Google.com gets an astounding 28 billion visits per month. The next closest is also a Google-owned property, YouTube, brings in 20.5 billion visits.

Facebook (FB) controls two of the most popular web sites; Facebook (#3) and Instagram (#13).

Jeff Bezo’s firm Amazon (AMZN) directs four popular web sites;

The infographic says Verizon (VZ) now controls the Huffington Post (#49) and AOL (#59) and will control Yahoo (#5) and Tumlr (#12) if the deal closes in 2017 Q2.

Reddit.com comes in at #7 and Reddituploads.com is #61.

Online retailer eBay comes in as the #8 website.

POTUS favorite Twitter (TWTR) is the 9th ranked website and t.co is #25.

Video streamer Netflix comes in ranked #10 by Vodien.

Microsoft (MSFT) controls 7 of the top 100 web sites with recently purchased LinkedIn at #11, Live.com #14. so-so search engine Bing is #17, followed by Office.com (#23), Microsoft Online Services (#24), MSN (#37) and Microsoft.com (#41).

100 Websites that Rule the Internet


The consolidation of all of this web traffic is troubling. The current administration is going to allow online firms to sell all the personal information they collect to the government, data aggregators or anybody else to make a buck.

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.

Scary Numbers

Scary NumbersAs you may have heard by now, the second largest health insurer Anthem gave away at least 80 million of their customers records to hackers. I say at least because they these always grow as the experts dig through the wreckage. The WSJ reports the Indianapolis based insured did not encrypt this data (I covered encryption here and here). That means customers social security numbers, phone numbers and other PII were easy targets for Chinese hackers according to CNBC.

Security breachAnthem is just the latest. There are even larger targets out there. The Business Insider published some pretty scary numbers. BI reports that somehow the biggest tech companies have done a great job at convincing people that their services for sending/receiving payments and purchasing goods are trustworthy and worthwhile. The article  estimates that Apple has somewhere around a billion iTunes accounts (with plenty of PII and credit cards) on file.

This chart from BI IntelligenceApple (AAPL) is nearing a billion iTunes accounts on file, and that number is likely to surge immensely. Customers in China can now link their UnionPay payment cards to their Apple IDs: For context, UnionPay is the largest card network in the world with more cards in circulation than Visa and MasterCard combined.

Amazon (AMZN) has approx. 300 million payment cards on file while PayPal has around 200 million payment cards on record.

Apple, Amazon, PayPal Payment Cards on File - Business Insider

Data breachA second BI article indicates that based on leaked Uber data charted analyzed by BI Intelligence, the ride-sharing firm has well over 12 million payment cards on file. Their closest competitor Hailo has 4.4 million payment cards on file.

Ride-Sharing Payment Cards on File - Business Insider


You have been warned. The next mega data breach could come from a tech firm like Apple or Amazon.

The WSJ article argues that companies can use many techniques to secure your data, but  those things slow companies down, sometimes to a degree they find unacceptable.

I think most victims of identity theft or credit fraud find that unacceptable.

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.

How Amazon Delivers

How Amazon DeliversNow much did you spend with Amazon (AMZN) this Cyber-Monday? Here is how they process all of those orders. In 3913, CNet says, customers ordered more than 36.8 million items globally, or 426 items per second from the online giant. They use robots like these ….


The 10 Amazon fulfillment centers in California, Texas, New Jersey, Washington and Florida use:

  • More than 15,000 Kiva robots;
  • Robo-Stow, one of largest robotic arm on Earth for moving large quantities of inventory for customer order fulfillment;
  • New vision systems for enabling the unloading and receipt of an entire trailer of inventory in as little as 30 minutes instead of hours; and
  • High-end graphically oriented computer systems for employees to use while fulfilling orders for customers.

Amazon Robot USA Today reports the Kiva robots are about a foot tall and weigh about 350 pounds and can lift 700 pounds. They can travel at 5 mph. The Kiva software determines which items each human packer needs and in what order and sends instructions to the robots.

The Kiva-bots follow bar-coded stickers on the floor, to bring a line of shelving units to the human packers, stopping just long enough for the correct item to be plucked from the shelf. Then the Kiva robot carries the whole unit back to its place, and goes to get another one.


Despite the robotic army, AMZN says they plan to hire 80,000 seasonal employees this year, a 14 percent increase on last year. They also claim to retain thousands of those new employees in regular, full-time roles after Christmas. We will see about the jobs.

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.

Another Cloud Implosion

Another Cloud ImplosionCode Spaces, formerly a popular source code hosting service run by AbleBots from New Jersey was forced to close. Infosecurity reports that after an attacker managed to get access to its Amazon (AMZN) Web Services EC2 control panel and delete most of its customers’ data.  According to an explanation on the Code Spaces website, the firm was a victim of DDoS with the apparent attempt to extort “a large fee in order to resolve the DDOS.”

As the firm attempted to restore control of its machines, the attacker escalated the attack, the site says;

… the intruder had prepared for this and had already created a Ablebotsnumber of backup logins to the panel and upon seeing us make the attempted recovery of the account he proceeded to randomly delete artifacts from the panel … We finally managed to get our panel access back but not before he had removed all EBS snapshots, S3 buckets, all AMI’s, some EBS instances and several machine instances. In summary, most of our data, backups, machine configurations and offsite backups were either partially or completely deleted.

Code Spaces marketed itself as a trusted provider offering “Rock Solid, Secure and Affordable Svn Hosting, Git Hosting and Project Management” and a “full recovery plan” with full redundancy, duplication, and distribution of the data across three different geographical data centers if things went wrong. According to the Infosecurity blog despite the marketing hype the Code Spaces sites is folding up its tent and hanging out a closed sign by saying;

Code Spaces will not be able to operate beyond this point, the cost of resolving this issue to date and the expected cost of refunding customers who have been left without the service they paid for will put Code Spaces in an irreversible position both financially and in terms of on-going credibility.


Another high-profile Cloud Computing service goes bust. Last year when Nirvanix went belly up I wrote about the need for a cloud exit plan. Calum MacLeod, vice president of EMEA at Lieberman Software told CIO.com that security incidents like this are avoidable if companies take effective steps. He suggested firms should implement:

  • Certificate-based authentication along with normal user IDs and passwords,
  • Whitelist applications,
  • A schedule for changing Credentials every few hours for critical applications,
  • Continuous discovery of the systems and applications to check if there were any changes to account settings, like happened to Code Spaces where new privileged accounts were created to allow the attack to continue.

He concludes that the Code Spaces incident reads like a cyber attack 101 scenario, where the failure to properly manage privileged credentials ultimately was the cause of the breach.

Other suggested measure for organizations using AWS would be to enable multi-factor authentication for admin logins. Alternatively, to prevent the wholesale lose of files Amazon Glacier could be used for longer term data archival, to augment regular offline backups.

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.