John Chambers predicts 'brutal' consolidation in IT industry

Written by PTI | San Francisco | Updated: May 20 2014, 21:07pm hrs
The IT industry will see a "brutal" consolidation as it experiences change that is twice as fast as it was a few years ago, John Chambers, Chairman of the networking solutions giant Cisco, predicted today .

Chambers, who is also the CEO of the US-based firm, said the Internet of Everything (IoE) has changed the way the world looks at data and technology. Now it is about providing the "right information to the right person at the right time."

Chambers, in his 19th year as the firm's chief, at his keynote address at the Cisco Live event here said: "You will see a brutal, a brutal consolidation in the IT industry. Out of the top 5 companies only maybe two will be able to be meaningful in say 5 years from now."

Cisco Live, which is in its 25th year, is the networking solution major's annual event for the education and training of IT professionals.

Chambers further said: "Growth like previous years will not be easy. Markets, economy is all changing very fast and so are the business models. So innovation has to be fast and the change in IT also has to keep pace with it."

Cisco chief added that many industries will also consolidate and enterprises will have to transform themselves and adopt end-to-end architectures like Ciscos to stay competitive.

Another issue is the fast pace of digital transformation with enterprises and governments laying stress on going digital not just to ramp-up their services, but also to cut operational costs, he said.

We will win with a combination of ACI (Application Centric Infrastructure) platform with hardware built from a combination of third-party and Cisco-developed silicon," Chambers said, adding that traditional, standalone networking equipment will be sidelined.

Addressing over 25,000 customers and partners attending the event, he said the future growth will come from the IoE, which is generally referred to as the sharing of data between smart devices over a network without requiring human-to-human or human-to-computer interaction.

"The simple concept, as you move forward with IoE, is that you have to get the right information at the right time to the right device to the right person to make the right decision. It sounds simple, but it is very, very difficult to do, and is almost impossible to do without our architectures and technology," Chambers said.

Chambers said Cisco will "bounce back" by concentrating on building full architectures for enterprises and government and through software and services like Cisco's InterCloud offering.

Elaborating on the growth strategy for the company, he said the focus is on cloud, mobility and security solutions. In the medium term, Cisco will strategise around services, collaborations (with other firms), videos and software.

In the long term, the firm will focus on API, SDN (software-defined networking), IoE, Intercloud among others.