John Chambers predicts 'brutal consolidation' of IT industry at start of Cisco Live

John Chambers predicts 'brutal consolidation' of IT industry at start of Cisco Live

Summary: The Internet-of-Things has been a focal point of Cisco's long-term vision for a few years now, fueling its developing rhetoric purporting "fog computing."


SAN FRANCISCO---The speed of change in technology is twice as fast now as it was three years ago, according to Cisco's CEO, who asserted the networking giant intends to repeat that process over the next five years.

In his 19th year as chief executive officer at Cisco, John Chambers held court at his 23rd appearance at the company's regularly scheduled IT summit, Cisco Live.

"You're going to see a brutal, brutal consolidation of the IT industry," warned Chambers, hinting at a "musical chairs-like movement" over the next few years.

He further predicted that many of the current players in "high tech" won't exist 10 years from now. Citing Gartner research and recent earnings reports, Chambers pointed fingers at IBM and Hewlett-Packard, citing the beleaguered tech giants haven't produced revenue for some time.

Defending "no one is going to eat our lunch," Chambers championed the Internet-of-Things movement as Cisco's trump card and key to revenue growth. He cited a handful of multi-billion dollar acquisitions in the last year to bolster this game plan, notably SourceFire and Meraki.

"You'll see us make a huge leap versus our peers," Chambers promised.

The Cisco chairman theorized that Internet-of Things requires both fast IT and fast innovation at a pace not seen before in order to deliver the right data to the right devices in real-time.

Chambers acknowledged that's easier said than done.

"We have to look to what Apple taught us. It has to be simple," Chambers remarked.

The Internet-of-Things has been a focal point of Cisco's long-term vision for a few years now, motivating the San Jose-headquartered corporation's recent push into the enterprise cloud market as well as its developing rhetoric around "fog computing."

Chambers reiterated how this concept is defined in which most data will be collected and kept at the edge rather than in the cloud.

Back in January, the Cisco IOx debuted as an architecture designed to provide routers and switches with computational abilities for the purpose of managing massive amounts of unstructured information pouring out of connected data points.

Essentially, that data would be computed more on the devices and sensors themselves, which has fueled Chambers and company to previously predict that the IoT market will blossom into a $19 trillion market in just the next few years.

In turn, this should lighten broadband consumption and demand loads on networks with the intention of pleasing everyone on points from better performance to lower costs -- at least in theory.

Shifting the compute location -- and the comprehension of that movement on the part of IT admins and employees alike -- might be more important than ever given the heightened debate over Internet security in the last year.

Cisco has been drawn into the center of that drama in the last few weeks. It was recently unearthed in former Guardian reporter Glenn Greenwald's new exposé tome that the National Security Agency has been hacking into Cisco-built routers and other IT equipment for the purpose of installing surveillance beacons.

In response over the weekend, Chambers penned a memo to President Obama, petitioning the U.S. Government to consider new rules preventing federal agencies from hijacking networking equipment at it moves through the supply chain.

Topics: Enterprise 2.0, Cisco, Cloud, Networking, Security

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.


Log in or register to join the discussion
  • I agree totally

    I also think that companies such as IBM and HP are now teetering on the brink of total obscurity as they try to reinvent themselves as high-value cloud (smoke and mirrors) businesses. I think this is bound to fail because people are now far more business and tech-savvy and are not prepared to pay thousands for project-managers etc, that add no value apart from to the bill.
    • Don't forget Cisco...

      Or did Chambers quit using revenue to buy back his own stock options? Not exactly a strategy for long term growth.
  • Yes, but..

    I don't trust the opinion of anyone who uses the expression: "no one is going to eat our lunch,"

    They are obviously exponents of the Dilbert pointy-haired-manager school of IT management and should be dropped from the top of a tall building to protect the species
  • My initials

    This is all utter B.S.. These people are living in a cloud of their own imagining and that cloud will fall apart soon enough. And it will not be HP and IBM that will be gone in 20 years time, it will be Microsoft and Apple (in that order) and the rest of them will partner with Google which will grow into something humongous eventually morphing the entire model of the internet structure into something quite exciting. Mark my words.
  • Can't Buy a Clue

    Oh the IoT will be on the edge alright but what it will be doing will be local as well unless an exceptional condition occurs which is when it *may* ask for help. I can't see a Cisco piece of gear being required for any of it. Indeed, given what rudimentary privacy we'll have left, the customer will *demand* a limited connection for most everything.

    I can see a role for a semi-autonomous agent, a future type of Google Now/Siri/Cortana, streamlining our lives. I can't see Cisco getting that right. Even the current players are stumbling now and again with it.

    Lastly, even without complicity on the part of Cisco, which is pretty much a given if any devices ever were returned for service, the NSA has set Cisco up on the buffet line. Sorry Mr. Chambers. Lunch is being served.
    Brian J. Bartlett