Cisco Systems (CSCO) reported its fiscal fourth-quarter 2008 financials last week, but while the San Jose, Calif.-based networking giant beat Wall Street estimates, thanks to the hurdle posed by the law of large numbers, it forecast more modest growth going forward. “The market is clearly in transition, and we will use this time as an opportunity to expand our share of customer spend and to aggressively move into market adjacencies,” CEO John Chambers said in statement.
The question is, what are those markets adjacencies? After all, in order to move the needle, Cisco needs to find as-yet untapped markets that it can serve. Such a challenge comes at a particularly difficult time: The telecom market has consolidated in the hands of a few carriers, new opportunities are few and far between, and the overall trend is towards hardware becoming a service.
Therein lies Cisco’s solution: It needs to start thinking like a software company, one that assumes that “the network is the corporation.” If it does that it will see that one of the biggest potential areas for growth lies with the (seemingly boring) infrastructure found in data centers, since (as a reader points out) the growing popularity of cloud computing means corporate data centers will increasingly start to look like Internet data centers. Continue »
