Cisco reportedly set to “disrupt its networking hardware business”

Cisco is reportedly working on “disrupting one of its biggest businesses”, by selling operating system (OS) software for networking devices, according to an exclusive report by The Information.

The report indicated that the company is building a new network OS that enables businesses to run networking features without the need for its high-end hardware. Instead, they will be able to use older and cheaper Cisco switches and routers that run on chips made by other vendors like Broadcom.

Sources close to The Information said the standalone version of the OS will be named Lindt.

According to the source, the purpose of the OS is to prevent end users from choosing networking companies such as Juniper Networks and Arista Networks, that have software in place to run “white box hardware”.

A report by CNBC said the move could possibly affect the profit margins and revenue of Cisco’s switching business, if customers choose to purchase Cisco’s software without its high-end hardware and pick the “white box hardware” instead.

But for partners, this could be a positive step for them, in bringing a range of Cisco’s solutions to market, to tailor fit the needs of end users’ specific needs, budgets, and requirements.

Cisco has been chasing after software growth, and in an attempt to move away from its core legacy business.

“When it comes to disruption, many of them are worried about what their future looks like, what they need to do to adjust," Cisco A/NZ partner business group director, Jason Brouwers, told ARN previously.

"But what might seem as a threat could be a positive outcome. We can’t always rely on what we’ve done in the past, we’ve got to look to the future.”

Cisco also recently closed its approximately $3.7 billion deal for application analytics specialist, AppDynamics, bolstering the networking giant’s software strategy.

Nutanix vice-president of channels, Christopher Morgan, recently acknowledged that all legacy vendors, including Cisco, remain challenged when it comes to moving towards software.

"They would have put some things in hardware, and some things in software," he told ARN previously. “That makes it really difficult for them to change their go-to-market. They have a top line revenue number, that they report to Wall Street, that includes reselling commodity hardware.

"It's hard for these companies to untangle from and there will always be that dependency on hardware because architecturally, it is very difficult to do true cloud solutions from a three-tier starting point.

"From VMware, to IBM, to pick your favourite, they all can't deliver a true enterprise cloud experience - it's because of this complexity,” he said.