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Senior Editor

What to expect from Cisco in 2018

Nov 29, 20175 mins
Cisco SystemsNetworking

As Cisco transitions from hardware to software, it’s rolling out a whole new line of products for IoT and cloud

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As the preeminent networking company shapes its plans for 2018, analysts and users say Cisco is at somewhat of an inflection point, transitioning from a hardware-based company to an integrated hardware and software-focused one.

In doing so, Cisco has plotted the next generation of its network management products in the form of intent-based networking. Meanwhile, as hardware sales growth slows due to workloads shifting to the public cloud, the company eyes the Internet of Things and edge computing as new frontiers for revenue growth.

“If you look at HPE, Dell, IBM and Cisco, all of those companies are trying to reinvent themselves for this cloud, IoT world,” says Forrester networking analyst Andre Kindness. “The traditional way of doing things is dead. They’re all big enough that they’re not going away anytime soon, but they also may have to find something else to power them in the future. For Cisco, maybe that’s IoT, maybe that’s software.”

From a business perspective, Cisco is still doing fine. The company earned revenue of $49 billion in 2015 and 2016 and $48 billion in the fiscal year that ended in July 2017; switching sales were down 5% in the fiscal year, while service revenue was up 3%. Below are some of the key technology areas the company is hoping will spur a new era of network innovation in 2018 and beyond.

Intent-based networking

While major networking advancements in recent years have centered around software-defined networking, in mid-2017 Cisco launched a new intent-based networking (IBN) strategy that is expected to shape the company’s future network management roadmap. What is IBN? Users dictate policies, and network orchestration software automatically configures and maintains the desired state of the network. In 2018, expect the theoretical advantages of IBN to become a reality as proof of concept deployments are rolled out.

Brad Casemore, an analyst with IDC, says Cisco also has to reconcile its somewhat disjointed IBN strategies. When Cisco launched IBN it did so in the context of campus networking equipment, based off its Catalyst hardware line and the DNA Center software. Cisco says it’s been doing IBN for years – although not calling it that – in the data center with its bundle of Nexus 9K routers, Application Centric Infrastructure (ACI) and Tetration analytics. “I think you’ll see Cisco talking more comprehensively about how intent-based networking will be rolled out across their portfolio, in the data center, the campus and across the WAN,” Casemore says. “I think they’re try to tie those narrative strands together.”

Kindness, the Forrester analyst, says he wouldn’t be surprised to hear Cisco apply the intent-based moniker to other management systems: intent-based security, intent-based data centers, etc.

Cisco’s transition to SaaS

While announcing its new IBN strategy, Cisco executives made a key point: It’s selling the software that runs IBN in a new way. Traditionally the software that runs atop Cisco networking hardware has been sold in perpetual licenses. DNA Center, the company’s IBN platform for its campus switches, can be purchased as a subscription or SaaS model.

“It’s pretty obvious they’re in a transition from being hardware centric to software focused, and that comes with its challenges,” says Amy Arnold, a Cisco user and network engineer who works in the public sector in Texas. As Cisco rolls out its new products like DNA Center and Tetration via software, she notes that hardware is still important, though. “We’ll still have plenty of switch board counts, but maybe just not as many,” she says. Arnold says if better software can improve uptime, reliability and allow network engineers to be more agile then she’s all for it. Casemore notes that financial investors will also be monitoring this transition closely.

The Internet of Things

As traditional network hardware sales begin to level off, the broad new internet of things market is an area where Cisco is expecting significant growth. Cisco has already invested heavily in creating ruggedized hardware equipment that can run in IoT devices, as well as software platforms to control IoT deployments. In 2016 Cisco purchased IoT management vendor Jasper for $1.4 billion. In 2017 Cisco launched Kinetic, an IoT operations software platform that allows users to automate connections to IoT devices, extract data from them and route it for analysis. Expect Cisco to market itself aggressively in the IoT market on both the hardware and software side.

Cisco’s latest cloud strategy

After a handful of pivots, Cisco is ready to give its latest cloud strategy a try. In years past Cisco attempted to build up Intercloud, its network of Cisco-powered clouds, but it gave up on that in 2016. This time Cisco is partnering with Google Cloud Platform to offer a hybrid cloud platform based on the open source Kubernetes software for running application containers. Cisco will enable its server hardware systems to run Kubernetes, while providing integrations with Google’s cloud-based Kubernetes service. Meanwhile, Cisco’s partnership with Google is not exclusive, so it will also help customers manage connections with other public cloud providers. As VMware partners with AWS, Google and IBM, Cisco seems like it felt a need to buddy up with a public cloud provider, and chose to do so with Google. Further clarification of exactly what will come from this partnership, and Cisco’s overall cloud strategy, could come in 2018.

Senior Editor

Senior Editor Brandon Butler covers the cloud computing industry for Network World by focusing on the advancements of major players in the industry, tracking end user deployments and keeping tabs on the hottest new startups. He contributes to and is the author of the Cloud Chronicles blog. Before starting at Network World in January 2012, he worked for a daily newspaper in Massachusetts and the Worcester Business Journal, where he was a senior reporter and editor of MetroWest 495 Biz. Email him at and follow him on Twitter @BButlerNWW.

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