Chambers pointed the finger at Net Neutrality for a slow down in purchasing by carriers in US markets and that he perceives it as damaging to Cisco business interests. I find it more credible that SDN/NFV is slowing capital investments than some far off political change.
Cisco is Anti-Neutrality
On the Cisco Web Site in a dedicated page on Net Neutrality in the Government Affairs, Issues section:
Opponents of net neutrality regulations, including Cisco, believe that allowing the development of differentiated broadband products, with different service and content offerings, will enhance the broadband market for consumers.
Cisco sells products to customers on the value of their ability to provide advanced features that can provide differentiated services. This is often used to justify the extra cost of Cisco products and contributes greatly to the profits Cisco can return to shareholders / extract from customers. Particularly, Quality of Service (the technology of Non-Neutrality) is a feature that Cisco uses to lead sales in all large accounts and a “common carriage” mandate removes most of the need for fancy equipment and moves customers requirements towards commoditised technology.
Convenient Kicking Post
In the Earnings Call Transcript for Q1 2015, John Chambers said (in reference to the 10% drop in sales to Service Provider market segment:
Service provider is the big challenge, let me be very explicit, that’s due to two to three U.S. service providers, who have dramatically slowed the order rates and I mean dramatically slowed the order rates with us. And that’s an implication also I think of some of the — what you’re seeing in terms of net neutrality, Titled II discussions going on, where in my opinion it would be a very disappointing in result if we moved back to regulation, the Internet like we did voice many decades ago. It would dramatically slow the ability of service providers to be on our broadband and at time that our country is finally cut backup.
Chambers points the finger at Net Neutrality for a slow down in purchasing by carriers in US markets and that he perceives it as damaging to Cisco business interests but this doesn’t seem likely.
Take the ONOS Project
I find it much more credible that SDN/NFV is slowing capital investments than some far off political change or fundamental transition that big telcos in the US are turning away from incumbent suppliers. As evidence, take a look at the founding board for the ONOS Project to build an new SDN grouping for service providers which is led by AT&T and NTT. The apparent purpose of this project is to move against Cisco, other hardware vendors and the vendor dominated SDN technologies of today including OpenDaylight.
The ONOS Project looks more like a political move than a technology project since Service Provider network are functionally identical to any other network (although that is not the common credo amongst service providers). OpenDaylight could have a “service provider edition” and it would make more sense to do this than start another project.
The EtherealMind View
Cisco continues to oppose Net Neutrality because it removes a major competitive advantage for Cisco products AND now accuses the issue for damage the revenue stream for the next several years if the US carriers become “common carriers” under FCC rules. Cisco’s motivations for opposing Net Neutrality are consistent and becoming more urgent as it damages their bottom line.
More importantly, there are early signs that customers are strongly searching for alternatives that actually reduce purchase and operating costs for their network hardware. The ONOS Project is the most recent example and joins OpenFlow, ONF, OpenStack among the movements of a significant numbers of customers looking for new choices.
American service providers are a small minority that they having almost no civil responsibility to the community and society in which they operate. As someone who works in global markets, I baffles me that American society doesn’t want at least some guarantee of freedom to use and consume the Internet. The same rights that allow guns, God and individualism applies here.
Governments regulate the food and water supply to ensure safety of citizens. Internet also needs some regulation to ensure supply and safety. I would maintain that unregulated corporate control of the Internet bandwidth would result in a significant loss of personal and societal freedom.
Cisco, Net Neutrality and Service Providers continues to look like a train crash in very slow motion and I’m sure we will be watching it happen for a long time to come.