Tag Archive for Cisco

Staff End Runs Security

Social networkingWhen I in my remote Bach Seat, contemplating sharing tech services, I am constantly facing the consumerization of IT. The iPads have made an official beachhead and Skype has made it inside the perimeter. So I should not feel alone according to recent reports from Trend Micro and Cisco (CSCO).

Facebook Help Net Security reports that despite more workplaces regulating social networking site access, employees bypass security roadblocks to engage in social networking. The research by Trend Micro says that employees are finding ways around security roadblocks, making social networking a way of office-life around the world. Trend Micro’s 2010 corporate end-user survey, found that globally, social networking at the workplace steadily rose from 19 percent in 2008 to 24 percent in 2010.

The survey also found that laptop users are much more likely than desktop users to visit social networking sites. Globally, social networking usage via laptops went up by 8 percent from 2008 to 2010. In the U.S., it increased by 10 percent In 2010, 29 percent of laptop users versus 18 percent of desktop users surveyed said they frequented these sites at work.

MalwareThe survey also found that laptop users who can connect to the Internet outside of company network are more likely to share confidential information via instant messenger, Web mail and social media applications than those who are always connected to a company’s network.

A 2010 Cisco survey, which looked at the security impact of personal gadgets and social networking in the workplace, found that employees are consistently (Cisco’s words) finding ways around security policies. 68 percent of those surveyed by Cisco said that employees use unsupported social networking applications.  Heavy use of unsupported collaboration, P2P and cloud applications were also reported. More than half said social networking is one of their organization’s three greatest security risks. More than a third reported that their company lost data or experienced a breach because of employees using unsupported devices.

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So why is Facebook such a problem for enterprises? For one, it is a huge time waster.  Datacenter Knowledge reports that Facebook users spend a total of more than 16 billion minutes on social networking site Facebook per day. Facebook VP of Technical Operations Jonathan Heiliger stated that 3 billion photos are uploaded to Facebook each month and users view more than 1 million photos every second during a presentation at the Velocity 2010 conference

The more popular the social network, the more effective social networks become as malware distribution platforms. KOOBFACE, the “largest Web 2.0 botnet,” controls and commands compromised machines globally. This demonstrates the scale of the threat, and emphasizes the need to educate users and implement strong policies.

Trend Micro says that trying to just prevent users accessing social networks from work could potentially increase the risk to an organization as users look for ways around computer security possibly increasing the chance of exposure to security threats. The lesson, in Cisco’s view, is that you better find the technologies–and resources–to support personal devices and applications because they will be used regardless. “The best strategic approach is to focus less on restricting usage and more on effective solutions to ensure highly secure, responsible use,” said Fred Kost, Cisco’s director of security solutions.

Call me old-school but  it seems that employees have always learned to work within reasonable company boundaries. Another option for those organizations that need web 2.0 in the organization should tale a look at Palo Alto Networks who have developed a firewall that can block the wasteful parts of social media and leave some parts of the web 2.0 app accessible.

Consumer technologies evolve faster than the IT department budget, and it could be a constant game of catch-up trying to accommodate the latest rogue gadgets and widgets. Ultimately, rogue IT use is not so much a failure of technology, but a failure of policy and policy enforcement.

Cisco to Cut 11,500 Workers

Cisco‘s (CSCO) two consecutive under-performing quarters finally prompted CEO John Chambers to take action. One of the first actions Cisco will undertake during reorganization is to sell a set-top box manufacturing plant in Juarez, Mexico. FierceEnterpriseCommunications reports that Cisco will sell the plant to Foxconn Technology Group, The plant has about 5,000 workers who likely will remain as employees of Terry Gou according to FierceEnterpriseCommunications.

CiscoIn addition the embattled CEO vowed $1 billion in cuts this year to Cisco’s expenses. Mr. Chambers announced plans to cut its workforce by 11,500. Cisco said about 975, or 15 percent, would be executives with job titles of vice president or above. A Cisco spokesperson said the employee reductions announced would be enough to reach the $1 billion cost-cutting target Chambers set in May.

FoxconnGleacher & Co. analyst Brian Marshall told FierceEnterpriseCommunications that the staff reductions were a good first step for Cisco, but he added that the remaining questions, e.g. how Cisco would fix the top line and drive revenue growth and product innovations, need answers.

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I wrote about Foxxcom’s expansion into the America’s here. This also looks like another step in the de-consumerization of the Cisco product line.

Tablet Notes

Forrester Report Casts Doubt on iPad Competitors

ForresterThe New York Times cites a recent Forrester (FORR) report on the state and near future of the tablet marketplace titled “iPad Challengers Have Flawed Product Strategies.”

The report’s main conclusion was that Apple (AAPL) iPad competitors have not addressed pricing, distribution and product differentiation adequately to make a case to consumers.

  1. The new tablets are too expensive.Apple has, unexpectedly, kept iPad prices comparatively low.The Motorola (MMI) Xoom starts at $100 more than the iPad and Samsung’s Galaxy Tab can be had for $250, but that does not include a two-year contract with a mobile carrier. Someone should be coming in to undercut this market, but that has proved harder than it looks.
  2. The new tablets are sold through the wrong stores. Forrester’s research shows that one of the least-desirable places to buy a tablet is at a cellphone store. But many tablet makers continue to rely on wireless carriers as a primary retail channel, which Forrester’s report concludes is a bad bet.
  3. The new tablets are not distinguished enough.  The average users does not care about specs because it’s about the apps that run on these toys.
  4. The new tablets are not Windows. Forrester’s survey said the N0. 1 operating system people want on a tablet is Windows. If Microsoft (MSFT) is not going to release a true tablet-ready OS until late-summer 2012, those who want a Windows tablet may have to wait two generations of tablets.

Forrester speculates that an Amazon (AMZN) tablet could change the market. Amazon could offer more attractive terms to media partners than Apple. It already has scads of credit-card numbers for easy one-click app purchases. It has media offerings like streaming video. It now has some experience designing, marketing and selling its own hardware with the Kindle.

Cisco Cius

CiscoDoes anyone remember Cisco’s Cius? In case you don’t No Jitter has an article from June 2010 by Zeus Kerravala of the Yankee Group. The Cius was purported to be a tablet that can dock into a base station and can act as video phone. When undocked the device operates as a tablet computer that can be carried around and shared between workers.

Mr. Kerravala says the Cius tablet isn’t really meant to be a replacement for a laptop or an Apple (AAPL) iPad type of tablet. It’s a communications-centric tablet that can provide an easy interface into vertically specific applications, make videoconferencing portable and create a new way for people to interact with one another. The Cius will be centered on visual communications and not productivity applications like word processing and spreadsheets.

The Cius uses  Google’s (GOOG) Android operating system, perhaps to attract developers. The article says the Cisco (CSCO) of the few years ago would the company have chosen to build its own interface. Android is a key to the success of Cius. The likelihood of developers building applications for an Android-based Cisco device is higher than developers creating applications for a Cisco operating system.

According to the article, the Cius is to be priced under $1,000, comparable to a high-end Cisco IP phone. While no network operator partners were announced at the time, Cisco said that the device was WiFi, 3G and 4G capable.

Are the End Days Nearing for PCs (and Macs)

Apple iPad 2 GigaOm‘s Ryan Kim recently wrote that the glory days of the PC’s are fading with the rise of more nimble smartphones and tablets. Wi-Fi provider JiWire confirmed this trend over the Christmas holidays. JiWire, which operates 35,000 public Wi-Fi hot-spots in the U.S., saw new iPad connections increase by 33.8 percent and new Android (GOOG) users were up 47.9 percent while new Mac users were down 28.1 percent and new PC connections were down 12 percent over the Christmas holidays. Mr. Kim writes that this trend marks people’s dependence on computers is waning as they find more utility and portability in smartphones and tablets.

This trend is shaking up the computer world according to GigaOm. Gartner (IT) recently predicted that PC sales would decline 10% in the face of increased tablet sales. And as mobile networks ramp up to 4G and Wi-Fi usage grows, it’s only fueling the interest in mobile devices. This is a major shift that is forcing all the big players to adjust. The author points out that:

  • Microsoft (MSFT) re-entered the smartphone game at CES 2011 with Windows Phone 7 with Windows OS on ARM (ARMH) designed chips.
  • Intel (INTC) is working hard to get its chips to run on mobile devices though it’s still an uphill battle displacing ARM-designed chips.
  • HP (HPQ) bought Palm last year and is prepping a line of WebOS tablets and smartphones.

Apple (AAPL) is forcing these changes on the industry according to Mr. Kim. the iPhone and the iPad made mobile computing more user-friendly. Apple CEO Steve Jobs predicted that overall PC usage would decline and suggested that lightweight devices like the iPad would do most of the tasks people needed. GigaOm says that companies that embrace this new reality, are the ones best positioned for the future. The new iFuture means PC manufacturers will have to accept that the switch to mobile devices may come at the cost of traditional computer sales. The article concludes that manufacturers can let someone else lure their PC customers away with a tablet or smartphone or they can build one themselves.

Tablets Are Hammering The Notebook Market: Acer Sales Off 10%

AcerThe BusinessInsider reports that Acer (ACEIY) has warned that its 2011 Q1 sales will be off 10%. The Taiwanese PC maker is blaming Apple’s iPad and it tablet cousins for devastating its key netbook business.

Foxconn – The Empire Apple Made

AppleHon Hai Precision Industry Foxconn is now the biggest exporter out of China. The firm churns out products like iPadsiPhones and PlayStations for Americans. Among its clients are Apple, Cisco (CSCO), Dell, HP, IBM, Microsoft (MSFT), Nokia (NOK) and Sony (SNE).  Most American consumers never head of Foxconn, which is also known as Hon Hai Precision Industry, until employees began to commit suicide by leaping off its buildings. However the firm has a longer history.

Terry Gou aka the ‘general’ founded Foxconn in 1974 with a $7,500 loan from his mother. According to a recent Buisnessweek article his first world headquarters was a rented shed in a gritty Taipei suburb called Tucheng, which means Dirt City in Mandarin. Mr. Gou, then 23, had done three years of vocational training and served in the military. He then worked for two years as a shipping clerk, where he got a firsthand view of Taiwan’s booming export economy and figured he ought to stop pushing paper and get into the game. With the cash from his mother, he bought a couple of plastic molding machines and started making channel-changing knobs for black-and-white televisions. His first customer was Chicago-based Admiral TV, and he soon got deals to supply RCA, Zenith, and Philips (PHG).

Mr. Gou’s first step into American consumer electronics came in 1980 when he started supplying Atari with connectors that linked the joystick cable to its 2600 video-game console. At the height of the Atari craze, Hon Hai was producing connectors for the 15,000 video-game consoles that Atari’s Taiwanese plant made daily. Buisnessweek says Mr. Gou wasn’t content to be a mere supplier of dumb parts. He applied for patents on the technology his company developed, and he kept pressing into new areas.

IBMIn the early ’80s, Mr. Gou took an 11-month tour of the U.S. covering 32 states, during which he dropped in on companies unannounced. Buisnessweek reports that during this trip, he spent three days in Raleigh, N.C., motel close to an IBM (IBM) facility to get an appointment after which he came away with a firm order for connectors. “He is really one of the top sales guys in the world,” Max Fang, the former head of procurement for Dell in Asia who did business with Mr. Gou and was his regular golf partner told Buisnessweek. “He is very aggressive and always on your tail.”

Mr. Gou was early to recognize that China offered an almost limitless supply of cheap labor and was not deterred by  the primitive infrastructure or the Communist government. He set up shop in a suburb of Shenzhen across the border from Hong Kong.  In 1991, Mr. Gou listed Hon Hai Precision on the Taiwan Stock Exchange to fund expansion, mostly into China. By 1996, Mr. Gou told Buisnessweek, it was clear to him that China would become a manufacturing juggernaut, and he started investing heavily in his facilities at Longhua Science & Technology Park aka “Foxconn City.”

CompaqIn 1996, Mr. Gou offered to build the chassis for Compaq’s desktop computers at a fraction of what it would cost Compaq to do the job itself.  “He had this vision and the guts to do anything in a big way,” Mr. Fang is quoted in Buisnessweek. “When I first visited the factory, I saw the whole value chain nicely and effectively designed, starting from a big coil of sheet metal at one end that was cut, formed, welded, and stamped to make the top and bottom of the chassis. Then they did the in-line subassembly, adding a floppy drive, the power supply, and cables. It was all shipped to customers who only had to install the motherboard, CPU, memory, and hard drive. After this revolution by Terry, final computer assembly was easy.”

Buisnessweek says that to sustain an efficient Chinese workforce, Mr. Gou quickly discovered that he had to offer housing, food, and health care, additional costs that kept most of his competitors out of the country. He had to do everything himself. Michael Marks, then chief executive officer of contract-manufacturing giant Flextronics (FLEX), saw Foxconn’s Shenzhen operations taking shape in the late 1990s, “They were making wire out of ingots of copper,” says Mr. Marks. “They had chicken farms to lay the eggs for the cafeteria. One building had 2,000 toolmakers. We had none at the time. But we did after that.”

DellFoxconn was transforming the industry. It was shipping bare-bones computers to IBM, Hewlett-Packard (HPQ), and Apple (AAPL). In 1998, when Mr. Gou won his first order from Dell (DELL) to make the chassis for its desktops, Dell insisted he do it in the U.S., close to the final market. “I bought a company in Kansas City. We quickly needed tooling shops and stamping,” Mr. Gou told Buisnessweek. “That factory was a money loser, but Terry had to build it to accommodate Dell against his own will,” recalls Mr. Fang. “For Foxconn, it bought a ticket into the Dell business.”

Tech Titans Talk Tax Cuts with POTUS

Fortune is reporting that a group of tech, pharmaceutical and energy giants are lobbying for a tax cut that would allow them to bring home the estimated $1 trillion they’ve got parked overseas at a steeply discounted rate. Fortune’s sources say that Apple (AAPL), Cisco (CSCO) and Oracle (ORCL)  are among the major players looking to win a one-year tax amnesty on their foreign earnings, allowing them to repatriate that money at a tax rate of about 5%, instead of the 35% they face now.

Multinationals prevailed on Congress to approve a one-year tax holiday once before, as part of a jobs package in 2004. Back then, the companies argued the relief would help them boost economic growth, because they’d plow their repatriated money into research, investment, and hiring. And while plenty of outfits benefited from the break — 843 corporations made use of the holiday, bringing back a total of $362 billion, according to the IRS — the broader economic benefits were dubious.

The Treasury Department wrote rules trying to make sure that the recovered cash was in fact invested back into the companies. But money is fungible. Although the rules expressly prohibited using the funds for dividend payments or stock buybacks, later analysis has shown participants sent most of it to shareholders anyway. One study cited by Fortune from the National Bureau of Economic Research, found that for every dollar of repatriated cash, companies bumped up shareholder payouts between 60 and 92 cents.

“A tax holiday would bring a substantial amount of cash back to the United States and paying that out to shareholders is good for the economy,” said study co-author Kristin Forbes, an economics professor at MIT’s Sloan School of Management and a member of then-President George W. Bush’s council of economic advisers told Fortune. “But if you’re a politician claiming this will create a lot of jobs or new investment, it isn’t supported by the data.”

In order to sell the deal, Cisco CEO John Chambers and Oracle president Safra Catz argued in an October editorial in the Wall Street Journal that a second holiday would help put Americans back to work. But they don’t promise that companies would drive all of their repatriated money directly into job-creating investments. They acknowledge that companies might pass the money along to shareholders again. But Mr. Chambers and Ms. Catz argue on top of direct investments, the tax cut holiday would spur a new stimulus by boosting markets, thereby increasing consumer confidence. And they say the tax revenue itself could fund $50 billion worth of credits to encourage new hiring — a sum only possible in the unlikely event companies decide to bring home the entirety of their overseas reserves.

Obama tech- dinner toastPresident Obama’s recent dinner with a the Silicon Valley’s tech titans was a star-studded event according to TechCrunch. Invitee included Facebook CEO Mark Zuckerberg, Apple CEO Steve Jobs, Yahoo (YHOO) CEO Carol Bartz, Cisco’s CEO John Chambers, Twitter CEO Dick Costolo, Oracle CEO Larry Ellison, Netflix (NFLX) CEO Reed Hastings, Genentech Chairman Art Levinson; Google (GOOG) CEO Eric Schmidt; former state controller and venture capitalist Steve Westly Doerr, and Stanford University President John Hennessy. The event was held at Kleiner Perkins partner John Doerr’s home.

After the dinner, White House press secretary Jay Carney said the group talked about ways to invest in innovation and how to increase jobs in the private sector. He said Mr. Obama also discussed proposals to invest in research and development and his goal of doubling exports in five years.

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I don’t think its unreasonable to assume that what POTUS calls, “increase jobs in the private sector” would mean a “tax cut holiday” for the tech titans.

It should be no surprise that the Tech Titans who supped with POTUS were big political contributors and supporters of the tax cut holiday. What happened to “Yes We Can”?

Diner AttendeeRoleFirmTotal individual political contributions since 2008Total 2010 firm lobbyingTax holiday supporter
Carol Bartz
President and CEO
Yahoo Inc.$5,000$2.2 million
John Chambers
Chairman and CEO Cisco Systems Inc.
$17,200$2 millionYes
Dick Costolo CEO
Twitter Inc.
John DoerrPartnerKleiner Perkins Caufield & Byers
$3,000$200,000
Larry EllisonCo-Founder and CEO

Oracle Corp.$50,000$4.9 millionYes
Reed Hastings
CEO Netflix Inc.
$44,800$130,000
John Hennessy

PresidentStanford University$4,800$370,000
Steve JobsChairman and CEO Apple Inc.
$1.6 millionYes
Art Levinson
Chairman and former CEOGenentech Inc.
$250$443,500
Marissa MayerVP
Google $5.2 million
Eric SchmidtChairman and CEO
Google Inc.$72,300$5.2 million
Steve Westly
Managing Partner and FounderThe Westly Group$99,000
Mark ZuckerbergFounder and CEOFacebook Inc.$500$351,000

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