Dumb LANs? Smart LANs? A crossroads for the industry and buyers
"I know you're supposed to set goals for yourself. I see all that motivational stuff on television. 'Think about the future, what's next!' But I'm all into the journey. It's fascinating to me. So if I make certain what I want moment to moment, I'm cool at the crossroads." Cassandra Wilson
Hi all,
In gearing up to moderate Network World's IT Roadmap 2006 event, I sought input from colleagues and others about the road ahead in key technology areas like voice over IP, identity management, security and network management. Many different opinions about the key issues, lots going on, lots to talk about.
Different story when I brought up local area networking. People got a glazed look, as though I had asked how they felt about all the new developments in dust mops. What's going on in LANs? Well, they're getting faster and cheaper, right?
Well, yes, actually. But, believe it or not, the future of the LAN has been one of the more contentious topics at our Roadmap events so far. Why, you ask?
Because, to put it simply, LANs are at a crossroads and it isn't entirely clear in which direction customers will go with their local area networks. And this isn't an academic debate over jumbo frames or quality of service tagging bits. This debate is central to the future health of Cisco and any other company that makes its living selling switches and routers.
Here's the nub of the discussion: Will LANs become true commodities - cheap, fast, vanilla boxes provided by whomever can deliver the lowest cost, brawniest boxes? Or will they become increasingly intelligent and play an ever more central role in such vital areas as security, management, application acceleration and data center virtualization.
During one of our events, a speaker from a company that does not sell LANs suggested that IT staffs would be able to shift resources away from managing LANs in the future because they'd just be big, dumb commodity pipes. That drew immediate protests from virtually every other panelist, LAN vendor or not, who claimed that LANs will be going in just the opposite direction. The audience seemed to be up in the air.
Clearly, if you are Cisco, Foundry, Extreme, 3Com or any other LAN maker, the commodity road leads nowhere. The future lies in building more intelligent capabilities into devices and being able to gin up more profits by selling these higher level services. Let's take Cisco as an example. How on earth can Cisco get back to - or even approach - the growth rates of its headier days unless customers are willing to pay a premium for smarter, more capable LAN products? If LANs go in the opposite direction, yikes! Nice run, John Chambers, enjoy your retirement!
This is the perfect lens through which to view many of Cisco's strategic initiatives, such as its foray into application switching (Application Oriented Networks), management, security and data center optimization. If Cisco networks become the platform supporting next-gen functions, Cisco commands higher prices and maintains strong customer control.
But it is not entirely clear customers want to go in that direction. Putting aside the open question of whether vendors can actually deliver on these visions, this issue raises a number of questions.
First, do customers believe that it makes sense, technologically, for the LAN to handle all of these things? Is a smart network really better than a dumb network? Is virtualization better handled at the compute layer or by management systems than at the network layer? Are automation, virtualization and security better handled by software or specialized devices than in switches? Does control in these key areas rest with different vendors with different skills?
Second, do customers want to pay a premium for those functions? Or will they come to expect that getting all these features and all that braininess is simply what it takes to keep them from switching to a true commodity LAN supplier?
Finally, if customers want to take an open, standards-based approach to solving such problems, do they to rely so heavily on a single vendor to support so many critical functions?
All of this leads me to believe that there is a vast opportunity here for a credible vendor to take LANs in the opposite direction from where Cisco - and virtually every other LAN player - is driving. All of the key LAN vendors are moving toward more smarts, more features. But can someone make this like the desktop PC market, where price, performance and supply chain efficiency rule?
Foreign manufacturers like Huawei were seen as the most credible threat on that front in the past, but none has really materialized as a viable competitor. They lack brand awareness and, perhaps, the requisite feeling of 'safety' for IT buyers. Could one of them emerge? I think it's doubtful for the foreseeable future.
But what about Dell? Sure, Dell's dabbled in networking, but has never made real inroads. But Dell has corporate brand awareness, great skill in process and supply chain efficiency, and the resources to really attack this market if it chose to do so. What's more, Dell's PC business is slowing, forcing the company to look to new worlds for growth.
Could the future hold a pitched battle between Cisco, as the standard bearer for the smart networks camp, and Dell as the champion of the dumb LAN world? Which other company might embrace that role of King Commoditizer? Which road will customers take?
Let me know your thoughts on this here.
Bye for now.
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