Cisco’s 5-Part Strategy to Reduce Customers’ IT Costs

Cisco is investing and revamping many areas of its business to help network operators and hyperscalers transform their infrastructure, according to Jonathan Davidson, SVP and GM at Cisco’s Mass Scale Infrastructure Group.

“We sit at a critical point where there are significant architectural changes that are starting to happen that will fundamentally transform how infrastructure is transforming how they can significantly reduce their cost,” he said during a recent press briefing.

Bandwidth is growing at an annual rate of about 30% globally, up to 100% in some places, but budgets remain relatively flat and revenues aren’t growing at similar rates, excluding public cloud providers, he explained. This means service providers need to reduce capex and opex significantly.

Davidson highlighted five areas of innovation that Cisco is targeting to help deliver on that goal: converged SDN transport, routed optical networking, a modernized stack for hyperscalers, edge computing, and 5G and 5G cloud services.

Converged SDN Transport, Router Optical Networking

Converged SDN transport simplifies infrastructure by reducing three-layer network architecture to a flat infrastructure, he said. This allows customers to reduce the number of elements in their network, lower costs, simplify automation, and introduce new services by treating their network like an API.

“Just like you would go to a public cloud and get instant-on gratification for applications and services that you want to turn up, we’re enabling our customers to do the same thing with their converged SDN transport networks,” Davidson said.

Router optical networking involves the shift from fixed or chassis-based platforms for optical transponders and integrates those into a pluggable form factor in a routed network, he said, adding that this also lowers cost structure. This objective also underlines why Cisco fought so hard and paid $2 billion more than it originally planned to acquire Acacia Communications for $4.5 billion in a deal that formally closed today.

Disaggregated Stack for Hyperscalers

Cisco has also over the last four years revamped and modernized its entire technology stack for webscale and hyperscale customers. This includes new business models that allow customers to buy its silicon, systems without software, or software in a standalone manner, or all components together in a traditionally integrated fashion, Davidson explained.

The disaggregated offerings are resonating primarily with hyperscalers because they have the size, scope, and scale to integrate their own technologies effectively, but Cisco has “seen traction in every single one of those different business models,” he said.

Hyperscale customers are also evenly split in their preferred models and typically purchase two paths from Cisco, he added.

The vendor’s services edge strategy, which calls for moving functions closer to where humans and machines reside, is something the company is partnering with carriers around the world on, according to Davidson. The primary goal there is to decrease latency and allow network operators to develop, deploy, and offer new services.

Cisco Expects 5G to Fuel Architectural Changes

Last but not least, Cisco is investing in 5G and cloud services that interoperate with 5G, he said, highlighting the company’s work with T-Mobile US that helped the operator deploy the world’s first 5G standalone network last summer.

“We believe this overall internet for the future that we’ve been talking about since December 2019 really begins with 5G and we believe that 5G not only just brings us more bandwidth capability with new radios and new backend technology stacks, but also we believe that it’s going to dramatically help close the digital divide,” Davidson said.

Cisco envisions at least three fundamental changes that will occur with the rise of 5G networks: the IP transport network, the 5G mobile core, and the services edge.

The IP transport layer, which traverses from the cell site router back into the core of the IP infrastructure has to change because “there is just too much bandwidth capacity in 5G networks to use the existing installed base,” he said. This presents Cisco with a new opportunity to help network operators build a more modern and agile network, but it’s not going to be a complete rip and replace effort, he added.

“This is going to be a major opportunity to dramatically transform how these networks are made,” Davidson said. “This is a time to revisit some of the fundamental beliefs that we’ve had for the last three decades on how networks should be built, and I can’t overemphasize that point.”

The 5G mobile core, which dictates the user experience, is also critically important, he said. “This is an opportunity for [carriers] to move from legacy appliance-based architectures into cloud-native infrastructure.”

Whereas network appliances are generally upgraded every six, 12, or 18 months, some of Cisco’s customers that use cloud-native technology are upgrading infrastructure once or twice a week, according to Davidson. “I cannot overemphasize the capabilities of cloud-native technologies as it relates to every aspect of network infrastructure, but especially inside of the mobile network.”

Source: SDXCentral