Following Cisco’s signature Live! 2021 event in late March, I recently had the opportunity to speak with Jonathan Davidson, who leads the company’s Mass Scale Infrastructure (MIG) group. During our one-on-one, we discussed several topics, including the recent Acacia acquisition, 5G and its private cellular networking opportunity and the book he co-wrote nearly 20 years ago! It was an engaging conversation and one that I believe reveals much about the success of Cisco’s service provider business unit.
The early years
Mr. Davidson began his career at Cisco in early 1995, through the acquisition of Combinet, an ISDN access company. While he got his start answering phones for the company’s TAC troubleshooting networks, over a decade and a half, he rose to solution engineering and product management roles. During that time, he even found the time to co-author a book related to Voice over Internet Protocol (VoIP) fundamentals (and edited another associated with the deployment of VoIP). If interested, you can find the first book here. I am impressed by this accomplishment—I’m currently writing my first book, and I’m learning just how challenging it can be.
Mr. Davidson left after his first tour of duty at Cisco to pursue an opportunity at Juniper Networks that allowed him to enter the executive management realm. While at Juniper, Mr. Davidson managed several initiatives, including routing, switching, security, and serving as the lead for its campus and data center business unit. Eight years later, he returned to Cisco in the fall of 2018 to lead the service provider business after Yvette Kanouff’s departure to pursue working with start-ups. Flash forward to the present, and Mr. Davidson has been instrumental in helping to close the Acacia acquisition that brings with it the opportunity to strengthen Cisco’s optical networking portfolio.
The potential of routed optical networking
Mr. Davidson and I also spoke about IP and how it has driven better economics over time—especially in optical networking. Cisco announced its intention to acquire Acacia in July 2019 and eventually closed the purchase earlier this year. Despite having to renegotiate the purchase price significantly, from my perspective, it was a smart move for the networking giant. Cisco is one of only a handful of infrastructure providers that offers a complete optical networking portfolio, and Acacia complements it with pluggable coherent optics. Pluggable technology is compelling because it can simplify network operations, reduce complexity and provide better investment protection through modularity. The resulting routed optical capability also offers significant capital and operational expense savings while providing more bandwidth per link.
The old technology adage of “faster, cheaper, better” is certainly applicable for the combination of Cisco and Acacia. I recently wrote on the integration of Acacia into the Cisco portfolio following the Cisco Live! 2021 event in March. If interested, you can find that article here.
Mr. Davidson and I spoke about the importance of allowing Acacia to continue to serve its large customer base in China and the rest of the world. This stipulation was one of the requirements with China’s final approval of the merger, and from my perspective, it is good for optical networking in general. Providing customers with more choices keeps pricing competitive, but it also stimulates innovation by having more participants that are vying to stand out in the ecosystem.
The 5G opportunity
During our conversation, Mr. Davidson and I also discussed the opportunity tied to 5G. The Cisco MIG team is involved in many 5G initiatives that span private wireless, Open Radio Access Networking (OpenRAN) and cloud-native architectural approaches. These initiatives aim to help operators reduce costs, mitigate risk, scale deployments and find new monetization opportunities. The latter is compelling given Over the Top (OTT) mobile application providers in my mind did a better job of monetizing services over 4G LTE cellular network connections than the operators that funded the deployments. While the past was mostly about access and adding unlimited subscriber data plans, operators cannot run the same playbook with 5G.
The enormous expense involved in deploying 5G infrastructure and purchasing increasingly costly spectrum makes the old way of doing things untenable.
From a private wireless standpoint, Mr. Davidson views the opportunity as a multi-route to market, but the key to its success will lie in its simplicity. I agree – enterprise network professionals have years of experience with Wi-Fi, but it has been relatively straightforward with its use of unlicensed spectrum. Private cellular networking requires the use of licensed spectrum and topologies that knit core to RAN hardware and software. It is an entirely different animal. If Cisco can make it as simple as the Wi-Fi deployment and operational experience, it will be a winner with specific use cases. I personally believe that most use cases for private cellular are within non-carpeted operational technology (OT) environments—those that have been traditionally unconnected or served by connectivity solutions that do not scale or easily talk to one another. On the other hand, I expect that Wi-Fi will continue to lead the deployments in information technology (IT) environments given the existing install base and Wi-Fi 6’s improvements in speed, latency and device density.
Cisco has brought a complete optical networking platform to market through a combination of organic roadmap development and acquisitions. Al Gore once staked his claim to the Internet, but clearly, Mr. Davidson and his MIG organization can make a better argument for their involvement. Cisco is on a mission to deliver the Internet for the future by providing the needed headroom and scale to accommodate the increasing traffic and proliferation of data (and its exchange). It is an audacious goal, but one that I believe the company is well-positioned to deliver on.
Disclosure: My firm, Moor Insights & Strategy, like all research and analyst firms, provides or has provided research, analysis, advising, and/or consulting to many high-tech companies in the industry, including Cisco Systems, cited, or related to this article. I do not hold any equity positions with any companies cited in this column.