The 10 Biggest Networking Stories Of 201210:00 AM EST Wed. Dec. 05, 2012
Most 2012 discussions of the networking industry began and ended in the same place: software-defined networking (SDN), what is it, what technologies are involved, is the channel important in the SDN push and does it threaten old-guard networking vendors like Cisco and HP? The answers are just as varied and bound to get even more interesting in 2013 as SDN moves from academe to practical discussion to go-to-market focus for everyone in the industry.
But, SDN wasn't all that happened in networking this year; there were headlines aplenty for the likes of Juniper, Huawei, Microsoft and, above all, Cisco, which will exit calendar 2012 in a far better position than when it entered. Here are the 10 networking news stories that mattered most in 2012.
What happened to Juniper in 2012? It began the year aching, with partners still in a tizzy over technical problems with Juniper's SRX series security gateways, an earnings downgrade and plenty of uncertainty.
At the end of the year, it's still aching: Juniper is laying off more than 500 people, it's getting scowls from all over Wall Street, its converged data center product set, QFabric, is slow to sell, it's getting attacked all over by security players both established and emerging, it's still far too exposed to the idiosyncrasies of service provider buying cycles for some analysts, and many of its top executives and engineers are streaming out the door.
Cisco CEO John Chambers told CRN in October that he'd never seen Juniper so vulnerable, and while you'd expect to hear that from Juniper's biggest networking rival, you'd be hard-pressed to disagree with him.
There were many, much bigger acquisitions this year, but few matter more to the future direction of VoIP/UC than ShoreTel's pickup of M5 Networks, one of the industry's best-regarded hosted VoIP companies. ShoreTel’s since begun the delicate process of integrating cloud services into its offering, now rebranded ShoreTel Sky, while trying not to tick off either its own channel or M5's in the process. At $146 million, M5 cost ShoreTel most of its cash pile, and PR black-eyes like the ShoreTel Sky outage during Superstorm Sandy weren't exactly helpful. But if ShoreTel gets the cloud story right, it'll find its TAM rapidly expanding in a sluggish VoIP and UC market where big share shifts are quite rare.
"There's no reason why ShoreTel can't be a big player," Jon Arnold, principal analyst of J. Arnold & Associates, told CRN. "If they're not profitable a year from now, there are going to be serious questions about what they've done with this. But they've got the channel on their side and they have a good plan to bring their cloud story to the customer base."
It was a bodacious year all around for wireless, to wit: You had the emergence of commercial strategies around the 802.11ac standard, expected to slowly start replacing 802.11n in the coming years. You had a push by networking vendors to define unified wired and wireless strategies -- Gartner even nodded to the trend by consolidating its formerly separate Magic Quadrants for enterprise LAN and enterprise WLAN into one.
You had the beginnings of buzz around Miracast, a peer-to-peer standard blessed by the Wi-Fi Alliance and already seeing products. You had a strong year from Aruba Networks, whose channel story is getting better and better. You had a disappointing, but still-remarkable IPO from Ruckus Wireless, which has the channel on its side. And right near the end, you had a monster acquisition from Cisco, which plunked down $1.2 billion for Meraki and plans to attack the midmarket full-bore with Meraki's cloud-managed networking wares.
The move toward software-defined networking and virtualized, converged data centers highlights the ongoing importance of customers' applications themselves, from how available they are to how smooth and speedy the user experience. It's in this paradigm where data center performance-oriented vendors like ADN kingpin F5 Networks and WAN op powerhouse Riverbed thrive.
Both F5 and Riverbed had good years, but the bigger story is how each company's specialty has become mainstream and how both are looking to push beyond those specialties, e.g. F5 into security and custom development and Riverbed into application delivery, Web content optimization and cloud storage. Now that a vendor like Cisco's decided exit the load balancing market, it's a big deal. With Riverbed pushing further into F5's ADN space, and F5 making noise about displacing security players, expect both companies to be much toothier competitors going forward, especially with overall growth in WAN op and ADN having slowed in recent quarters.
A year ago, it was all Huawei all the time when it came to discussions of disruptive networking vendors in North America.
But after a modest start to Huawei's enterprise channel push, including the enterprise program launch in October 2011 and the addition of Synnex and other distributors throughout 2012, its progress is unclear. Huawei U.S. channel chief Rob Claus said Huawei is ahead of where it thought it would be in earning its U.S. channel stripes. But it's still early days for partner recruitment, and Huawei's had plenty of solution provider doors slammed in its face even before a scathing report from the U.S. House Intelligence committee denounced the company as a "national security threat" in October.
It's hard to salute Huawei for 2012, especially with its earnings and gross margins declining and several of its better-known Western executives, such as John Roese (pictured) and Matt Bross, heading for the exits.
Whereas last year every vendor was talking up a "BYOD strategy," this year they started to make money from them. While there's no question the trend will continue, the industry-wide conversation shifted this year to focus on the practical challenges of BYOD. For example, a November study by Blue Coat suggested most organizations still aren't realizing the full benefits of mobile device use due to IT administrators' hesitation. Meanwhile, telecom researcher Ovum recently suggested that the move toward BYOD might have cultural implications. "Employees in high-growth, emerging economies are demonstrating a more flexible attitude to working hours, and are happy to use their own devices for work. However, in mature markets, employees have settled into comfortable patterns of working behavior and are more precious about the separation of their work and personal domains," Ovum said. "This bifurcation in behavior will shape not just future patterns of enterprise mobility in high-growth markets compared to mature markets, but also dictate which markets, structurally, are going to benefit most from this revolution in how and where we work."
When Microsoft entered the VoIP market in 2007, Chairman Bill Gates heralded a "transformation to software-based communications is going to be as profound as the shift from the typewriter to word-processing software."
Five years and a bunch of roadblocks later, Microsoft Lync, which was the evolution of OCS when it launched in November 2010, has become one of Microsoft's most important emerging businesses and is growing fast enough that Cisco now considers Microsoft, not Avaya, its fiercest competitor in the UC space. Back in July, Microsoft said Lync revenue grew 45 percent year over year, and analysts from all over have pegged Lync as a potential boon for Microsoft in the enterprise. Even VARs that lead with Cisco and Avaya UC say they've been forced to put Lync in their back pocket -- or risk losing customers who want to go Microsoft. Lync now looks like the bona fide blockbuster it was always positioned to be, and should be even more so once Microsoft finally has a solid story around how Lync users will leverage Skype.
Most observers see this move -- and other SDN-related acquisitions such as Brocade's pickup of Vyatta -- as a sign not only of SDN's increasing market importance but also as a harbinger of many more SDN mergers and acquisitions to come.
Even by itself, it's a doozy: a $1.2 billion gauntlet-throw by VMware -- which, it's been rumored, outmaneuvered Cisco to get the deal done -- that puts it in probable competition with many of the networking and infrastructure vendors it counts as allies. That includes Cisco, which is a close strategic partner of both VMware and its majority-owner EMC in the market for converged infrastructure but is increasingly at odds with both vendors.
In 2011, in the heat of Cisco's global restructuring, more than a few Cisco observers were calling for CEO John Chambers' ouster and wondering if the mighty networking king really, truly was in decline. But entering its 2013 fiscal year, which began on Aug. 1, Cisco looked pretty darn solid, especially compared to what rivals like HP, Juniper and Huawei have gone through this year.
Chambers (pictured) sees Cisco's 2012 position -- respectable earnings, monster data center growth and a renewed focus on core priorities instead of 30-50 "adjacencies" -- as validation. Now, as attention shifts more conspicuously than ever to Chambers' succession, Chambers is justified in telling partners that the bet they've made with his company is the right one, especially with other tier-one vendors like HP, Dell and Oracle posting year-over-year declines and muddling their channel strategies. "When you partner with Cisco, you partner with a company that doesn't lose," Chambers told CRN in an exclusive interview. "When we need to reinvent ourselves, we do."
Suddenly, every major networking vendor has an SDN or software-defined data center strategy, and it was the No. 1 networking topic in 2012.
Networking staples like Cisco, HP, Alcatel-Lucent, Juniper and others sought to define their SDN strategies. Some were big leaps forward, others seemed like slideware and marketing. Meanwhile, SDN startups, from better-known names like Big Switch Networks and Embrane to emerging players like Midokura and Plexxi, had their profiles raised. Some hotshot SDN players, like Nicira, got acquired. Others, like ADARA Networks, are in play but are pushing solid channel strategies. Regardless, the space has attracted the attention of industry observers, VCs and the channel, and it's shifting from academic discussions to practical use cases and how to sell it to customers. "It's still early days for it and for the people who are going to lead it," Gary Alexander, president and CEO of Alexander Open Systems, an Overland Park, Kan.-based solution provider, told CRN in October. "But there's no question it's coming."