They say contentment comes from knowing your place in the universe. For Lloyd Carney, Brocade Communications Systems Inc.’ place is in the data center, not in the wilds of connecting every possible electronic device to the Internet.
During a presentation this week, Brocade’s CEO Carney told investors and analysts that the company is going to take on Cisco Systems Inc. by focusing on what it does best: building and enabling high-performance data centers, not chasing wild marketing slogans.
“We don’t do the network of everything,” said Carney, according to Enterprise Networking Planet. “I have no interest in networking my fridge. We’re all about the data center.”
“We know with certainty where the puck is going, and we’re gliding right there. The end result is that we’ll enable our customers to be more efficient so they can do more with less,” he added.
Cisco is pushing the notion of the Internet of Things, in which more than 50 billion IP-enabled devices will be connected to the Internet. Building networks that can process all the traffic and data generated by these devices is a $14.5 trillion opportunity, Cisco says.
What Brocade’s Carney is probably postulating here is that Cisco is overreaching. While more electronics — everything from refrigerators to sewerage systems — are being connected to the Internet, the immediate and more addressable opportunity is in the data center.
Moreover, Carney believes Cisco made a strategic mistake getting into the server business. For years, Cisco partnered with server companies such as IBM Corp., Hewlett-Packard Co. and Dell Inc. to marry their products with its routers and switches. Now Cisco is a server vendor; while it has a small base, it’s growing faster at the expense of former partners.
Brocade plans to take advantage of the tension between Cisco and other server vendors by forming strategic partnerships to create integrated data center solutions.
Brocade isn’t the only company that believes it can take on Cisco. Last week, Extreme Networks plunked down $180 million to buy Enterasys, virtually doubling its size overnight. With Enterasys technology, Extreme will attack Cisco’s core networking business as well as its flanks of security, WiFi and management software.
In 2011, Cisco got into trouble by trying to press too many divergent products and strategies. The result was a restructuring that downsized the company to focus mostly on enterprise solutions. While Cisco is growing, it’s also seeing challenges caused by economic uncertainty. Next week, Cisco will start another round of layoffs to reduce its global headcount by 4,000.
Leave a Reply