As reported in Bits last month Insieme was founded by three Cisco employees who have previously two other created Cisco-funded companies, one in data storage and one in high-speed networking. Like Insieme, these companies were designed to be purchased by Cisco, a creation known as a “spin in” company. The spin-ins can create disruptive products quickly, but also risk hurting company morale by making some star employees multimillionaires with little risk, while others are left behind.
Insieme is expected to boost Cisco’s portfolio in the rapidly-advancing business of software-defined networking, or S.D.N., which is expected to be a cheap and efficient way to deploy large cloud computing systems.
In the memo, entitled “S.D.N.: Evolving the Network as a Platform,” Cisco said:
“Insieme’s product development efforts are complementary to that of Cisco’s current and planned internal investments. Insieme and other internal programs will be components of Cisco’s broader programmability framework. These types of investments have strongly benefitted Cisco in the past, and we will continue to look for similar ways to complement our internal development capabilities.”
Other details about Cisco’s investment in Insieme are expected in a late-May 10Q filing with the Securities and Exchange Commission.
David McCulloch, Cisco’s director of corporate communications, described the memo as “a kind of stage-setting” so that employees would understand Cisco’s position in S.D.N. Insieme, he said, “is quite different and quite complimentary to what our existing teams are doing” inside Cisco. He added, “this is one of the ways, certainly not the entire way, Cisco will address network programmability.”
Indeed, much of the memo, which runs about 1,000 words, is about the company’s overall strategic outlook. “The network is no longer a cost center; it is central to revenue generation and strategy execution,” the memo says, adding that S.D.N. “promises to make the network more agile, scalable, and cost-effective.”
The memo also says that “Cisco is operating from established positions of strength, which include the scale of its operating systems, superior ASICS, unique embedded intelligence, experienced engineering expertise, and an expansive installed base—most of which has no interest in completely replacing what it has already invested in so heavily.”
Many outsiders, however, including former Cisco employees, questioned why, if the company’s assets are so superior, it again needs to reach outside of its usual operational process to create new technology.
On Tuesday, however, Cisco did get at least one unsolicited plug, when a top engineer at Google said Cisco would likely be among the leading players in S.D.N. He also placed Juniper Networks, NEC, and Alcatel among the leaders.
Not surprisingly, Mr. McCulloch, the Cisco spokesman, agreed his company would prevail. “Seventy percent of the world’s networks are Cisco, it makes sense that when customers talk about how to program them they’d talk to Cisco,” he said. “Our strategy has always been we will build, we will buy, and we will partner.”
Insieme looks like some combination of the three, with a special addition, risk of internal discord as Cisco revives its internal star system. No wonder its “all hands” note also stressed the importance of collaboration in the months ahead.