Posts Tagged broadcom
Optimism was abundant at Interop in Las Vegas this week. Attendance and energy was up from the more economically subdued shows of the last two years. While I only got to spin through the event for a few hours, I did get to talk to a bunch of the companies and bloggers at the show. While cloud (and the fabric networking that enable scalable architectures) may have been the big theme, but the undertone in the networking space was attacking Cisco while they are believed to be vulnerable due to some soft financial results and restructuring.
Commoditization of IT, moving to more standardized components is a force that affects every product line across the industry. Looking at the details of any server or storage device will show the impact that Intel has had. Network switches have specialized chip designs that differ from processors, but face the same competitive pressures of creating new generations of products at a lower cost with more functionality. The move to standard switch components has moved significantly over the last decade and is creating a shift in the economics of the switch market. Specifically, hardware value is flowing from the switch vendors (Cisco) to suppliers of switch silicon (Marvell, Broadcom, QLogic). The implication is that to maintain margins, switch manufacturers will need to look for alternative value streams.