July 19, 2013, 4:15 PM — Facebook's Open Compute project, which is working on open source servers and switches, will be limited by "weaknesses" in scope that Cisco can exploit, CEO John Chambers said this week.
In an exclusive interview with Network World where he also touched on the consumer market and EMC alliance, Chambers said efforts like Facebook's to commoditize and wring cost out of hardware purchases will open up opportunities for Cisco to provide solutions that are better tailored to specific customer needs.
"I think this will just be one more series of good challenges that Cisco will say 'what's the business objective on,'" Chambers said of Open Compute. "There are a lot of weaknesses to the area -- we're going to go back and solve customer problems. If you're standalone anything, this is going to be a hard market to play in. Anything white label, where the decision is cost or opex, you're going to lose."
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What Cisco will not do is sit around and let Open Compute proponents and supporters guide the discussion on commodity switches and servers. Cisco's messaging will be proactive instead of reactive this time.
"What we will not do is leave that concept alone like we did SDN, and allow other people to gain the high ground and then play defense," Chambers said. "This one you will see us out ahead of the game on."
Chambers also addressed Cisco's exit from the consumer market after failures with the Flip videocam and umi TelePresence system, and the recent divestiture of Linksys. Cisco was late addressing opportunities in that market and they ultimately passed the company by.
"Consumer-to-consumer, we're out," Chambers said. "We missed our window on areas such as Flip and even Linksys. And we made the mistake of getting too fascinated with the device. I love my Flip camera, but it was about FlipShare (video software) in the cloud to any smartphone that would have outmaneuvered Apple. And my team just missed it. Shame on me for not catching it."
Chambers said Cisco is still in the business-to-consumer market through various channels. He said Cisco will not enter markets where it can't gain "sustainable differentiation," 40% share and alignment with its core networking business.
Alignment is also key to the VCE data center coalition Cisco owns with EMC. EMC and its VMware business have been increasingly competitive with Cisco outside of VCE, yet Chambers insists the joint venture is "going to have a good life cycle."
"EMC is a very important strategic partner with us," Chambers said. "VMware is a partner at times, competitor at times."
VMware's entry into networking via the Nicira acquisition strained relations between EMC and Cisco, but turned out to be "the best thing to happen" to the company, Chambers said.
"Even though I wish VMware did not get into networking it was the best thing to happen to us because once they did, then we went back to what we do best: open architecture, support four hypervisors, not tied to any vendor for strategic long term direction," Chambers said.
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