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Consumers drive network use, not enterprise, Cisco says

Cisco is paying attention to the fact that consumer use of technology is now driving network development rather than the enterprise, and shifting its focus accordingly.

In one of the biggest networking shifts in the last 10 years, the consumer appears to be driving technology changes rather than the enterprise, according to Cisco Chief Development Officer Charles Giancarlo told attendees at Cisco's C-Scape 2007 analyst meeting in San Jose last week. Cisco must embrace the shift, Giancarlo said, which is a 180-degree turn from where Cisco started in developing enterprise technology.

Cisco isn't deserting the enterprise or service provider markets, but paying close attention to what is driving networking behavior, since understanding the marketplace is key to developing any company's vision, Giancarlo said. A major influence on Cisco's direction, Giancarlo said, is that users want to access the applications they use at home -- such as Facebook or YouTube -- in business as well. With this blurring of user boundaries, Cisco is no longer dividing users strictly into consumer or worker categories.

Cisco is clearly embracing a consumer strategy, according to Robert Whiteley, senior analyst of enterprise networking at Forrester Research Inc., but he noted that this isn't the only strategy at Cisco. "As Cisco approaches a $40 billion run-rate, then it will have to address multiple segments across consumer, enterprise, small business and service providers," Whiteley said. "However, one of the unifying themes is this 'consumerization' of IT."

Last year Cisco developed unique architectures for each customer segment, with its Enterprise, SONA; SMB, Smart Business Communications; Consumer, Connected Home; and Service Provider and IP NGN offerings, Whiteley pointed out. "Now they are pursuing strategies for each segment," he said. "I think this is a sign that Cisco is maturing and building the blueprint to continue growing beyond $40 billion."

Today's market is about the merging of private and public networks, not about the use of data, voice and video in different market segments. It's about information and information sharing, collaboration and communications across environments, and entertainment, Giancarlo said. "Finally, it's about having the freedom to communicate at any time, anywhere, on any device."

Cisco's point of view on these changes in behavior is that the network needs to make communications fluid and transparent. "We're looking at the network as a platform," he said. Over the next three to five years, Cisco will be moving forward as a platform provider that also provides software, as opposed to a vendor that just sells network hardware.

Video drives the vision

At its conference, Cisco repeatedly drove home the message that video is the networking driver of the foreseeable future. Tony Bates, senior vice president of Cisco's Service Provider Group, offered a variation on the message. "I think the killer app is broadband, actually, and one of the greatest enablers is video. Enough bandwidth has been built out that the time for video is now."

To prove the point that 2008 will begin the age of IP-enabled video in many forms, Giancarlo said nine billion video streams were served over the Internet in 2005. In 2006, the number grew to 301 billion. In 2007, the number of video streams will easily beat all projections, he said.

Even though consumers may be pushing video adoption, the increase in video streams, according to Giancarlo, is creating new opportunities he groups under the name "video convergence." This convergence includes business telepresence and videoconferencing, desktop video, digital signage and video surveillance. "All of this data needs to be transported and managed," he said.

Despite Cisco's shift in focus, Whiteley believes that Cisco will maintain its network hardware dominance for the foreseeable future.

SearchNetworking Site Editor Amy Kucharik contributed reporting to this article.

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