Cisco CEO John Chambers also had a bit to answer for on Thursday afternoon following a very mixed earnings report on Wednesday.
Here's a glance at the myriad of topics that Chambers discussed in less than an hour during the lunchtime keynote:
- Cisco's CapEx plan: Chambers noted a number of shifts going on at the moment, especially in the U.S. market, starting with a divergence from a compute-centric model to a network-centric one. That's compounded by Cisco's shift to serving customers primarily through new subscription-based business models.
- Earnings: Chambers defended that Cisco's earnings reports have been "remarkably consistent over time," downplaying Wednesday's report as part of one of the "fluctuations" that happen from quarter to quarter. Chambers acknowledged a few weak spots, hinting about broadening the customer portfolio while also admitting "that doesn't mean there aren't certain issues in wireless." Chambers advised that investors and analysts to remain patient, promising improvements and higher run rates for switching and routing by the first quarter of next year.
- Software-defined networking: For Cisco, according to Chambers, it's about delivering "the most full implementation of it in the marketplace." That also translates to delivering a platform and not just a buzzword as Chambers remarked he has "yet to hear a customer say they want SDN," but rather ask for reductions in capital and operating expenditures.
- Internet of Things: Chambers reflected that you usually see market transitions occur three to seven years out, adding if you're jumping in within one year, you should go into acquire-mode or else. In contrast, Chambers boasted that Cisco started in on Internet of Things/Everything at least six years ago. He predicted that most of the computing capability and analytics will be at the edge of the network to turn around data into major leverage points. The bottom line, as projected by Chambers, is that the IoT is going to be a $19 trillion profit market in the next few years. That includes $2.9 trillion for manufacturing, as one example, alone. Internet of Things is becoming the backbone (at least in rhetoric) of Cisco's overall business strategy, and Chambers pointed in that direction once again, stressing that Cisco's IoT game plan combines the company's cloud strategy with data analytics, mobile, collaboration, and most important of all, security. He reiterated that it's really about how quickly can you get the desired business outcomes matched by lower OpEx.
- China: Chambers cited that China represents less than five percent of Cisco's business. Nevertheless, he asserted Cisco is "committed to" this market, adding he has been following many of the leaders and trends in the region "for decades." Chambers noted that Cisco is aware there are some security issues that do affects its business there. "But I probably would not be a good barometer for what is happening in China," Chambers concluded.