Cisco: Pondering 2008

Cisco will be on the prowl for software developers, extend into virtualization and become more consumer friendly as it evolves into being more of a software provider.

Those nuggets come from Forrester analyst Robert Whiteley in a blog post. Here's a look at his key points and my take.

Cisco's business is just swell, but it will move up the software stack to become an IT services provider instead of a network hardware vendor, argues Whiteley. Indeed,2008 could be a turning point for Cisco and it is becoming more interested in Enterprise 2.0 technology. But moving to be a well-rounded IT provider (software, hardware and services) puts it into competition with IBM, HP and Microsoft. That's a different model entirely and Cisco won't flip the switch quickly.

Other points to ponder:

Cisco will need software developers. Whiteley argues that Cisco will need software developers used to working with enterprise applications. He floated the idea of a BEA acquisition as being logical. My take: Again, this is tricky for Cisco. A more likely outcome is Cisco eyeing Web 2.0 as a way to pull an end run around enterprise applications.

Cisco will embrace virtualization. Whiteley adds that Cisco will leverage its VMware partnership, but needs to grow its own virtualization intellectual property throughout its business. My take: Perhaps, an acquisition of Citrix would be a better fit for Cisco.

Cisco needs to become more consumer friendly and redefine carrier partnerships. Whiteley argues that Cisco needs to beef up its voice and digital home offerings. Whiteley correctly adds that Cisco's Linksys brand lacks mojo compared to something like Tivo. My take: That's true to a degree. Keep in mind though that Cisco owns Scientific Atlanta, which via its cable boxes, is really today's home entertainment hub.