The Biggest Cisco Stories Of 2013

Change In The Air At Cisco

It's hard to remember a time when Cisco wasn't in the spotlight in 2013.

Between the networking giant making targeted acquisitions in the security and storage space and, at long last, responding to the buzzed-about software-defined networking (SDN) trend, there wasn't a dull moment for the San Jose, Calif.-based company. Here's a look back at the top Cisco news stories form 2013.

10. Cisco Continues To Bet Big On Mobility

Mobility continued to be a major priority for Cisco in 2013, with the company making multiple acquisitions to bulk up its Service Provider Mobility Group.

One such buy was Cisco's $475 million acquisition of Ra'anana, Israel-based Intucell, which makes self-optimizing network software for configuring and managing mobile carrier networks. The deal, which closed in February, came on the heels of several other mobility-focused Cisco acquisitions, including that of policy control and service management specialist BroadHop in December 2012.

Cisco's mobility buying blitz continued in 2013 with its April acquisition of Ubiquisys, a U.K.-based manufacturer of 3G and 4G small-cell technologies for mobile networking, for $310 million.

9. Cisco Readies 'Internet Of Everything' Offensive

Cisco CEO John Chambers this year put some very real -- and very large -- numbers around the Internet of Everything phenomenon, or the ability for people, data and everyday objects or "things" to communicate with one another via the Internet. Chambers said the Internet of Everything represents a whopping $14.4 trillion opportunity for Cisco and its customers, and that the company expects there to be 50 billion connected Internet-enabled connections by 2020 (up from a measly 1 million in 1994). "Three to five years out, our major move will be to become the No. 1 IT player together, and we will do this with partners and in conjunction. To do that, we believe the major transitions will be around the Internet of Things," Chambers said at the Cisco Partner Summit in June. "And we will spend a fair amount of time on how we challenge each other and look at that." Cisco rolled out a number of new Catalyst switches and services routers in 2013 that it said are optimized for the Internet of Everything and the new generation of applications that emerging with the trend.


8. Cisco Teases 'UCS 2.0'

When Cisco launched its initial Unified Computing System in 2009, many were skeptical the networking kingpin could establish a foothold in servers. Fast-forward to today, and UCS represents a $2 billion-plus business that grew 44 percent in Cisco's last quarter alone. And that journey, Cisco hinted in December, is far from over.

At the Raymond James Systems, Semiconductors, Software & Supply Chain Conference in New York, Cisco vice president Paul Perez told investors that Cisco is readying another server market shake-up with the launch of UCS 2.0, a new version of the company's flagship converged infrastructure offering that, according to Perez, will be purpose-built for big data and complex Web service provider environments. "We are in the midst of executing what we call our UCS 2.0 strategy, and that is focused on data-intensive applications," said Perez.

Perez didn't give a specific timeline for a UCS 2.0 launch but said Cisco is working to integrate solid-state storage technology from its Whiptail acquisition into the product.

7. Cisco Gear Allegedly NSA Backdoor

When German news publication Der Siegel got its hand on a leaked NSA document this December, Cisco received what it called a shocking and unpleasant surprise: its networking gear has potentially served as a back door for NSA monitoring for as long as the past five years.

According to the documents obtained by Siegel, an NSA specialist unit has since 2008 been intercepting orders of computing and networking parts and implanting those parts with wiretapping bugs and spyware. Cisco, along with Juniper, Dell and other major technology firms, were among the targeted OEMs.

Cisco Chief Security Officer John Stewart responded to the leaked documents in a blog post, noting that Cisco is "deeply concerned" with the Siegel report and will "continue to pursue all avenues to determine if we need to address any new issues."

6. Cisco's Big Storage Play

Cisco made its formal debut into the data storage market in 2013 with its September acquisition of Whiptail, a maker of solid-state memory and storage systems.

Cisco paid $415 million in the deal and plans to integrate Whiptail's technology into its UCS fabric computing architecture, allowing UCS to better support the new breed of applications being created from trends like big data and the Internet of Things.

Apart from representing Cisco's official entry into the storage arena, the Whiptail deal immediately called into question the stability of Cisco's partnership with EMC, the storage giant that has traditionally provided the storage components for UCS.

Cisco told CRN in a statement that it has no plans to sever its ties with EMC. Still, the Whiptail acquisition marked the latest in a series of M&A moves that has suggested a growing rift between Cisco and long-running partners like EMC.

5. Cisco Sheds Linksys Unit

After months of speculation, Cisco in January finally sold off its Linksys business, along with the rest of its Home Networking Business unit. Selling off Linksys was the latest in a series of moves by Cisco to rid itself of its consumer-focused lines. In April 2011, Cisco killed off its Flip line of consumer-grade, handheld video cameras, dumping 550 employees in the process.

Linksys and Cisco's Home Networking Business unit was sold to Belkin, which said this year it's readying a new line of SMB-focused products under the Linksys brand, still one of the best known in the consumer and SOHO wireless networking markets.

For most, Cisco shedding its consumer-focused lines suggests the company is refocusing its efforts on its core networking strengths, along with higher-margin data center and converged infrastructure opportunities. For others, the moves suggest Cisco is staging a slow retreat from the SMB segment, as well.

4. Cisco Cuts Outlook

In the financial industry, Cisco is often viewed as a tech bellwether; if Cisco isn't doing well, it's often bad news for the IT market at large. Well, believers of that mantra certainly got a scare this year.

Citing continued weakness in its service provider and emerging markets business, Cisco at its financial analyst day in December slashed its three- to five-year growth outlook from 5 percent to 7 percent to a more modest 3 percent to 6 percent. Cisco shares fell about 2 percent on the news. Even more drastic, though, was Cisco's first-quarter earnings call in November, when Cisco said it expects its revenue for the current fiscal quarter to slide between 8 and 10 percent. As the news spread, at least 17 brokerages cut their price targets on Cisco stock, with two downgrading their ratings, according to Reuters. At Cisco's financial analyst day, Chambers stressed to investors that the downward spiral should only be temporary. "We clearly understand your frustrations with our Q1 and Q2," Chambers said. "But it is an exception, in our opinion, and an aberration in terms of what is going to occur."

3. Cisco Snaps Up Sourcefire

Cisco bulked up its security portfolio in a major way this year through its blockbuster $2.7 billion acquisition of cybersecurity specialist Sourcefire.

The deal, which closed in October, will give Cisco access to Sourcefire's time-tested and industry-leading intrusion prevention system, capable of conducting real-time traffic analysis, sniffing and packet logging. The move will also help Cisco compete against the likes of Palo Alto Networks and Check Point Software technologies in the increasingly hot advanced threat detection market.

Analysts told CRN that, while Cisco paid a premium for Sourcefire's technology, it's an investment bound to pay off. "Cisco every once in a while needs an infusion, and so adding Sourcefire to the Cisco world will help them in the next-generation firewall and application-control space," said Pete Lindstrom, principal analyst at Spire Security. "Cisco plays by different rules and so their ability to continue to develop the technology will be interesting to watch play out."

2. The VCE Coalition Gets Complicated

The Cisco-VMware-EMC alliance has, for a while now, been an interesting one to watch. Although the three tech giants have tightly woven themselves together to create their joint coalition VCE, all three vendors continue to make moves that create potential friction with the others. And in 2013, that friction only continued to grow. For Cisco and VMware, the beef largely revolved around SDN. When VMware in August introduced its flagship network virtualization platform NSX, Cisco was noticeably absent from its list of vendor partners, sparking speculation that the two were on the outs. Then, prior to Cisco making its own SDN debut in November, Cisco CTO Padmasree Warrior in a blog post made a not-so-subtle jab at NSX and the software-overlay approach VMware, along with other Cisco rivals, are taking toward SDN. Meanwhile, Cisco's acquisition of storage vendor Whiptail raised a few eyebrows in regards to Cisco's long-running alliance with EMC. While the companies maintain the nature of their partnerships is simply that of a co-opetition, the moves made by all three this year definitely left some partners and industry watchers scratching their heads.

1. Cisco Responds To SDN Threat

By nature, the SDN trend seemed to spell bad news for network hardware vendors, shifting the focus away from proprietary networking gear to software, commoditized hardware, and white-box switches and routers. That's why, everyone, it seemed, was waiting to see how Cisco would respond. In November, they got their answer: Cisco's Application-Centric Infrastructure (ACI). Developed in conjunction with Cisco's wholly owned subsidiary Insieme Networks, ACI, Cisco said, represents the next evolution beyond the software-overlay SDN solutions that the bulk of its competitors tout. Underpinning ACI is a new line of Cisco switches called the Nexus 9000 and Cisco's new Application Policy Infrastructure Controller (APIC). After the launch, Cisco got some flak from competitors who argued that, because a new line of Cisco switches anchor ACI, it doesn't promote the open, vendor-agnostic environment capable with other new SDN technologies. Cisco maintains that ACI is more scalable, easier to manage and can provide more visibility into physical and virtual environments than competing solutions. Time will tell which argument pulls more weight.