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Cisco to begin Early Field Trials of AVE to extend ACI to Microsoft Azure, AWS and Google

Cisco had recently announced its plans of extending Application Centric Infrastructure (ACI) – its Software Defined Networking (SDN) solution, to the public cloud – Microsoft Azure, AWS and Google.

This will allow quick innovation and digital transformation as enterprises will get to access ACI anywhere along with the flexibility of running their applications across their private and chosen public cloud, while maintaining constant network policies along complete multi-cloud domain.

ACI helps in reducing data center complexities by providing hardware and software capabilities jointly via one environment. Approximately 4,000 customers of Cisco are currently using ACI platform.

In the wake of this development, Cisco made another announcement of commencing Early Field Trials (EFT) of its ACI Virtual Edge (AVE), Cisco’s next generation Application Virtual Switch (AVS) for the ACI environments. AVE is independent of hypervisor and offers seamless policy control across a number of hypervisors, with its basic version targeted for VMware ESXi.

Frank Palumbo, Senior Vice President, Global Data Center & Enterprise Networking Sales announced this development in his blog post. He said, “We are on schedule to ship by the end of this year.”

He added, “Cisco understands the burden of operational change. We have designed the ACI Virtual Edge for an easy transition with minimal operational disruption. Current customers can continue to use the AVS and move to the AVE at their convenience. We will continue support for the AVS to alleviate customer concern. With this solution, customers can maintain their existing policies and operational procedures.”

With traditional hardware based switches and routers quickly fading away, Cisco has been continuously trying to position itself as a software vendor. This year, the company experienced a dip in its switching revenue by approximately 9% YoY in fiscal 4Q17, that cover almost half of its revenue.

Cisco seems to be in the initial transition stages of moving to the software and subscription revenue business model and so this dip is expected when the companies switch business models. The recent announcements are the proof that the tech giant is focusing on innovation that can create long term business value.

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Despite revenue decline, Cisco fights back with new acquisition and plans for product extensions

Cisco Systems Inc. recently announced its intent to buy Springpath Inc, leading hyperconvergence software provider for $320 Million in cash.

The decision came few days after the computer networking giant announced its fourth quarter earnings report of a declining revenue base.

Total revenue was down 4% recorded at $12.41 billion.

The revenue from many of its products was considerably low (5% down). The primary products revenue was down in the fourth quarter, while services saw an increase by 1%. Security and wireless offerings recorded 3% and 5% upsurge. While other revenue sources were all in the decline, including switching and routing (9% down year-over-year).

Reportedly, analysts said that they don’t expect much improvement to the business in coming quarters, but the company can perform well in the long run. This can be due to the increased efforts towards acquisition of software and subscription businesses.

The intention to buy Springpath can be considered as one such effort. Cisco’s HyperFlex HCI (hyper-converged infrastructure) is an Original Equipment Manufacturer(OEM) of Springpath.
The duo, thus, have been working very closely since 2012, when Springpath was founded. And, most of the customers and channel partners expected the companies to merge businesses in future.

Rob Salvagno, Vice-President, Corporate Business Development, Cisco said, “This acquisition is a meaningful addition to our data center portfolio and aligns with our overall transition to providing more software-centric solutions,”

He further added, “Springpath’s file system technology was built specifically for hyperconvergence, which we believe will deliver sustainable differentiation in this fast-growing segment. I’m excited to be able to provide our customers and partners with the simplicity and agility they need in data center innovation.”

The company also announced its plans to extend ACI (Application Centric Infrastructure) into public cloud segment.

In a company blog it said that now the customers will be able to run applications across their private as well as public cloud. The service will soon be available on Microsoft Azure, Amazon Web Services and Google Cloud platform.

With this, the company aims to offer maximum flexibility to its customers. Currently, ACI service supports multiple hypervisors, Linux containers and bare metal servers. The company even co-engineered with over 65 Data Center ecosystem partners who run their products with ACI. This has helped ACI turn into the most flexible and widely deployed SDN (Software defined networking) solution.

And now by extending the same facility to public cloud domain, customers will get more benefits.

With such developments and efforts in revamping product line, it would be interesting to see how Cisco jumps back with higher revenues.

Stay tuned for updates!