Peter Christy

The Light at the End of the Tunnel (or is that a train coming our way?)

How do you sense the turn about? It probably requires a basic understanding of calculus - the most important issue is the first derivative (no I'm not talking about bad investments!) and not the absolute value. For example, Cisco just reported another really bad quarter in the sense that their revenues are nearly 20% under last year, and more or less the same is expected for next year. So how could John Chambers possibly have optimism other than too much Diet Coke in one afternoon? The answer is that the quarter-to-quarter and seasonable behavior is starting to look a lot healthier (the first quarter-to-quarter growth in a year). On top of that both Cisco and Microsoft have done an impressive job of ripping out cost, so if revenues start to rise they are both in a pretty good position to move forward and do body damage to their less sturdy competitors (what normally happens in a downturn is that the strong get stronger).

InterOp and the Recession

For years Cisco has been an avid supporter of InterOp because of the interoperability testing that has always been a part of the show. As part of that support, Cisco has had an analyst dinner and executive mingle at InterOp. That event has been on the wane since Sue Bostrom took over for James Richardson as CMO (Sue herself never made the dinner) and this year with the economic overlay they cancelled the dinner. Traditions die hard. The exhibition was still BIG and had traffic, but our friends with booths said the crowds were down significantly (InterOp management assured them that the percentage of "qualified" buyers was up! J ) and the vendor to civilian ratio was up as well. My old friend Alistair Croll had signed me up to lead a Cloud and Data panel. It was the last time slot on the last day which made me apprehensive, but the turnout was good and the discussion interesting. All of the speakers on my panel really understood both IT and the Cloud (Greenplum and Vertica — scale out data base providers, Aspera — large file data transfer technology — and Cisco), but in some of the earlier Cloud panels some of the speakers knew large scale web systems but were clueless about enterprise IT. That seems important because a key Cloud issue is how you extend existing IT with Cloud based services — a truism about enterprise IT is that applications don't get rewritten until you literally can't buy parts for the computers they run on. Data makes the point clearly: it's one thing to wax eloquently about "Cloudbursting"  -- using the Cloud to deal with peak loads. It gets uglier if the application depends on use of a 5 TB database and you can't do that over the Internet (Amazon just announced that you can ship them data in disks via FedEx as an alternative to networking — harkens back to discussions of the bandwidth of a freight car moving at 50 MPH full of floppy disks!).