Straight talk from Cisco's John Chambers and Juniper's Scott Kriens
"He who lives by the crystal ball soon learns to eat ground glass."
Edgar Fiedler
Dear Vorticians,
Along with my colleague Jim Duffy, I had this week the pleasure of interviewing both Juniper CEO Scott Kriens and Cisco CEO John Chambers within a couple hours of each other. The hook behind the Juniper interview was the company's impending 10-year anniversary - which is incredible, because it seems like just yesterday that I met Kriens in a coffee shop in the Valley to talk about the launch of this audacious startup that wanted to take on Cisco in the routing market. The focus of the Chambers' interview was the recent acquisition of Scientific Atlanta - an unusual move, given SA's size and geography - and Cisco's initiatives in the data center, security and other markets. (Both interviews will appear on this site and I'll provide links ASAP. I wanted to give you an early look.)
At the very highest level, Kriens and Chambers seemed to be reading from the same script. The lines between consumer, small/medium business, enterprise and service provider networks will blur and service providers will play a bigger role in introducing new services and capabilities to customers, particularly in the consumer and SMB markets. Networks will become more and more intelligent, and will serve as the platform for a growing number of services, such as security and application acceleration. Video becomes an increasingly important part of the convergence story in every market segment.
Both CEOs were clearly uncomfortable when we asked them whether big service providers should be charging big Internet companies for 'premium' handling of their customers' traffic, the subject of my last entry. Chambers and Kriens said it's their job to provide service provides with the tools to differentiate traffic and charge for varying service levels, but it was up to customers and regulators to sort out whether such fees are legitimate.
But ask Chambers or Kriens about the other CEO's company and you get answers that are mirror images. Kriens talked repeatedly about focus - focusing on the really difficult network challenges facing big customers (more on the Kriens discussion next week.) - the strong implication being that Cisco is spreading itself too thin by playing in every market from consumer networking up to the core of the service provider.
From Chambers' perspective, it's a necessity to play in all those markets, and the companies that aren't covering all those bases and bringing together all the key technologies have already missed the boat. "We think the network will become the platform that will deliver services, applications, etc., to all four markets. We think (those markets) will blur. Our key premise is that you had to make those decisions five to 10 years ago. It's hard to come into those markets now. We thought you had to be a router and a switch and a security and a storage play, as well as a consumer and a wireless play, and an IP telephony and a video player. We were way out on this lake and we were the only one on the lake. You've got to have a healthy paranoia that maybe you're missing something because we were surprised that nobody followed us for a decade. Only in the last year have you begun to see players venture out a little bit. But if we execute right that's a very difficult hill to climb faster than we climbed it."
Part of the focus issue involves Cisco's buyout of Scientific Atlanta, precisely the kind of big, cross-country acquisition that Chambers has eschewed in the past and the kind of deal that puts Cisco in competition with a former partner (Motorola). Here's why Cisco did it, in Chambers' words. "We think (video) was a segment of the puzzle that we needed dramatically stronger capabilities in. (The deal) doesn't complete the picture but it really makes us pretty strong in terms of that expertise. I would clearly weight it as the one piece where we had the furthest to go. There's a natural play for video in service provider in the U.S., with (SA) just now going into the ILEC community, in addition to the cable companies. But we clearly offer them a play to do it way outside the U.S. with our relationships with service providers around the world.
"There are segments in Motorola where we will continue to complement each other, there are segments where we might have a little more overlap than before. That makes it harder to have the strategic partnership in a way I'd like to see it occur. It's an area we really had no choice in. We have to play in video and we have to play in an internal competency capability. And there are only two players at the high end. We made a decision to go with the one that was available in the market that had a certain amount of critical mass. Time will tell if that was the right decision or not but I feel very good with it. It's one of the few acquisitions that, the minute you do customers say I understand. I did not have one customer say we think this is a mistake. Even players who weren't using SA said it's a brilliant move."
I also asked Chambers if enterprise customers - the company's traditional, bread-and-butter buyers - ought to be worried that Cisco has so many irons in the fire. Will Cisco forget who brung 'em to the dance? Not to worry, claims John. "Our natural alignment is toward our enterprise customers. Actually, enterprise points us to what we need to do in service provider, commercial and even within the consumer segment. When I (spoke recently) with a large customer, they said they want us to have a security strategy for the enterprise but they want us to have it across service providers and down to the home - the most likely way to infect their network.
"Secondly, many of our ideas have come from the enterprise side of the house. The Big 3 (automakers) pushed us really hard on changing our support model to add the thin layer of consulting. They said 'If we're going to become dependent on you as our preferred player in so many areas, you've got to help us adjust to the new technologies faster. And you've got to tie them together and help us do that. While we might have expertise in some of the areas, we will never have expertise across the board. And while your partners will help us, nobody can help us like you do.'
Our track record has shown we've always stayed committed on issues. We think part of the reason people standardize on us is when we say we're going to do something, even if it takes us a long time to get it right -- network management we're still trying to get right -- we stay with it, stay committed to what we're doing or if we change we let them know. "
Sorry to go on so long this week. I'll share more of our discussion with Chambers and Kriens next week. Your thoughts, however, can be shared with me at any time. Reach me here
Bye for now.
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