Brocade Offers I&O An Opportunity To Control Costs With Their Subscription Program

Brocade isn’t the loudest networking vendor on the block, but more than two weeks ago it released a subscription switching service that should have sent a shockwave through the industry. With Brocade Network Subscription,customers pay for their network infrastructure on a monthly basis.  Sadly, the new service was not some new xfabric or new-fangled technology, the industry was quick to dismiss the news as anything more than another cloud announcement, and so Brocade’s subscription program registered only a murmur. What was missed was that the service helps to solidify I&O as a business unit on the same level as manufacturing, services, energy, and other businesses.

I’ve written extensively about how networking solutions need to support two business realities: 1) Enterprises are embedding themselves in their customers’ lives, and 2) businesses are forming symbiotic relationships with their vendors. In regard to the latter, businesses want to ensure that their vendor is creating products and solutions that are in the best interest of that company, and so there is an expectation that their partners will carry some of the financial risk and burden, ensuring that they will stay committed. On the vendor side and with respect to embedding themselves, the reasoning is twofold. First, Wall Street rewards recurring revenue streams, and this is more likely if the vendor can create something the customers can only get from that particular source. Second, vendors know it costs ten times as much to find new customers and would prefer to have a customer keep coming back to keep their operating costs as low as possible.

As a result, there has been a shift to a subscription service model. Take for example three distinct markets that support this strategy:

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Prediction: HP Cuts Loose Their Networking Hardware And Transforms Into A True Networking Alternative

HP’s startling announcement, two weeks ago, to discontinue Touchpad and all webOS-based products, purchase Autonomy Corporation, and split off its PC divisions, caught the market off-guard. Hewlett-Packard Chief Executive Officer Leo Apotheker feels the company could be the next Polaroid in the consumer products and mobile device war — a business that requires companies to be “much faster than a conglomerate can move in most circumstances.” The reality is this new strategic direction should not have surprised anyone who has read Leo’s résumé; it was the board’s intention to hire a strategic thinker who could evolve the company into a software and services organization by leveraging HP high-margin assets coupled with a few acquisitions. HP has one of the strongest orchestration software portfolios in the industry, which encapsulates everything from enhancing user experience through its APM solution all the way down to controlling Layer 2 through the Intelligent Management Center (IMC). With strategy toward creating and servicing cloud infrastructures, HP should examine what it has and figure out if its current networking portfolio differentiates the company, changes the way networking is done, and aligns HP’s networking division to HP’s strategic goals.

Three things I&O teams should think about when it comes to HP:

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