A few years back I started a tradition of making “Unpredictions,” because everybody else does predictions. In an unprediction, I predict something that won’t happen.
Let’s review 2015’s unpredictions, which were made last January. Here’s the rundown, as well as a self-grading of my own opinions:
1) Juniper Drama Won’t Stop
Just when it appeared I was doomed to fail on this prediction, news of Juniper’s security back door broke, rescuing me. Juniper drama was back in the headlines! At the last minute, this enabled me to upgrade a certain “F” to a “C.”
But aside from that, I got this one wrong. Juniper Networks appears to have turned things around. The networking company had a much better 2015 than 2014.
2014 was a tumultuous year for Juniper. Previous CEO Shaygan Kheradpir quit in November 2014 under mysterious circumstances. Attacks from activist investors made for some ugly headlines. All of this created a lot of doubt and uncertainty around Juniper’s leadership. At the beginning of the year, it looked like that could continue. It turns out that the opposite has happened.
New CEO Rami Rahim appears to have steadied the ship: The company has had a couple of good financial quarters, and its SDN strategy with Contrail is finding a comfortable niche. Even an investigation into whether Juniper violated the Foreign Corrupt Practices Act has fallen behind the scenes, with nary a headline for months.
Best thing? Juniper share price has leaped about 30 percent since the beginning of the year.
Yep, missed that one.
2) John Chambers Won’t Stay
In June of 2014, I made some waves when I reported that talk in San Jose was rising that Cisco CEO John Chambers was close to announcing his retirement. After I wrote that article, the chatter and news coverage exploded.
There was clearly something behind it, as plans were underway to pave the way for new CEO Chuck Robbins to take over from Chambers. After years of speculation, 2015 was the year that the Chambers succession strategy became public and complete. Robbins became CEO in July after Chambers announced his departure in May, marking one of the biggest turning points in Cisco‘s leadership in decades.
Chambers’s two-decade run was remarkable, establishing his credibility with investors and clients as the master of positive spin.
By most measures, it has been a smooth transition. Robbins immediately put his stamp on things by shuffling the executive leadership. Chambers remains executive chairman and has remained involved and visible at Cisco and in the media, making many public appearances. There’s also the fact that he still owns 1.6 million shares of Cisco stock, according to SEC filings earlier this year.
The bottom line is that Chambers is gone, and it’s Chuck’s company. Glad we finally got that one right.
3) NFV Won’t Take Over the World Overnight
There is no doubt that network functions virtualization (NFV) remains hot, with many active deployments and proofs-of-concept. But in the carrier world, it’s been relatively slow going. The number of public mass deployments remains low, and many large communications service providers are still in the planning stage. You can look through our NFV Report 2015 for a list of benefits and concerns about NFV.
Meanwhile, the marketing wars continue apace, with everybody plugging OpenStack into their servers and calling it NFV. Truth is, it will be more complicated than that. SDxCentral research indicates that service providers are looking for real solutions — as well as proof of ROI.
Expect progress in NFV to continue apace as service providers modernize their infrastructures. But as I’ve written before, the largest challenges are on the business, operations, and cultural level, where the NFV mavens have yet to prove their value. Hopefully, 2016 will become the year when that becomes clearer.
4) Service Provider Capex Won’t Grow
Well, this was easy, because the large global service providers have told us over and over that they cannot sustain capital spending (capex).
The service providers continue to be cautious about spending outlooks in their public announcements. At best, capital spending projections in 2015 were flat to up single digits.
Research firm IHS said that service provider capital spending grew by about 3 percent in 2014 and that revenue grew only 0.4 percent. But what about 2015? IHS analysis projects that capital spending will be close to flat for 2015 and in the near future.
“We’re entering a new era of desynchronized cycles in telecom spending. Regions and economic powers have their own investment agendas and pace, and this will result in overall flat-to-low-single-digit capex growth through 2019 unless a major event occurs,” said Stéphane Téral, research director for mobile infrastructure and carrier economics at IHS. Téral’s comments appeared in a press release announcing the findings.
It’s clear that the carrier capex trend is flat or low single-digit growth at best.
5) The Cloud Won’t Stop
In the meantime, while the carriers struggle for rationalizing their investments, cloud services and infrastructure spending continues to boom. Spending on all manner of cloud services is being driven by enterprise demand.
Anybody that has a great cloud story — just look at Amazon and Google — has seen their stock price rise. Even Microsoft, with shrinking revenue and a legacy operating system, is getting a boost from its Azure story.
Research firm IDC said in October that the cloud IT infrastructure market would grow 24 percent year-over-year in 2015, driven by expansion of the public cloud data centers.
It’s clear that the cloud remains the No. 1 story in networking technology and IT infrastructure. And so far, nothing appears to be slowing it down.
That’s it for 2015’s unpredictions. I hope you enjoyed them whether I got them right or wrong. Would love feedback on what you’d like to see in 2016 — send me a note at email@example.com. I hope everybody has a happy holiday season! I’ll be back in the first week of January with more unpredictions for 2016.