Cisco is seeing positive data center trends across that sector of its business, according to Ish Limkakeng, SVP of product management for the company’s Data Center Business Group.
“We’re very excited about where we are with data center switching and kind of a lot of the underlying trends that are driving that market,” he said Nov. 28 at the Credit Suisse Technology, Media & Telecom Conference in Scottsdale, Ariz.
“From a public cloud standpoint, of course, there has been a lot of growth there,” he told the conference, adding that “you can think of” the market in “three pieces.” He explained: “There’s this public cloud mega-scale data center. There are these traditional services providers and then there are [many] enterprise, commercial, public sector customers. They’re really three distinct markets and we see different growth dynamics and trends in each of them. In the enterprise and commercial side of the world, what we see is there’s still a lot of growth there, but a lot of those customers are kind of wrestling with challenges of what a hybrid cloud world looks like.”
That presents “a great opportunity for us in the industry and for us at Cisco specifically to help them with that challenge,” he said, adding: “Pretty much all of our customers have some combination of an on-prem environment and a public cloud or at least a third-party hosting environment and they’re looking to figure out ‘how can I do workload placement in a way that is business-driven, not technology-driven?’ And so that feeds into a lot of what we’re doing in our data center business — not just, of course, providing state-of-the-art data center switching and our server business, but also the software above that and how we can help them orchestrate policy, move workloads and have consistent security across these different environments.”
One of the “key dynamics that we see in that enterprise-commercial” segment of the market is that the “architecture play is really effective for us and, I think, effective for the customers,” he also said.
“From a service provider standpoint, we have great traction there,” he went on to say, pointing to “a lot of progress” there. But he said the trends there “have a lot more to do with the underlying aspects” of customers’ businesses. At least some service providers are “evaluating new business models,” he noted.
“The shift to the cloud has been a major driver for data center spend,” moderator Brad Zelnick, a software analyst at Credit Suisse, told the conference. In contrast, “service provider spending has remained not as robust,” he said, adding: “I think a lot of Cisco’s future is about software,”
Cisco also “see an opportunity to continue to innovate in silicon,” Limkakeng said during a Q&A with attendees, but told the conference his company was being “very pragmatic about it.”