As the industry gears up to welcome 2020, things have not been looking very bright in the world of networking. This is primarily because key players like Arista and Juniper have been reporting business slowdowns as there have not been any new big deals and cloud providers haven’t been as free-spending as in the past.

As per Gartner, worldwide IT spending has been very slow and is projected to total $3.7 trillion in 2019, an increase of 0.4% from 2018; this has been the lowest growth forecast so far in 2019. However the good news is that global IT spending is expected to rebound in 2020 with forecast growth of 3.7%, primarily due to enterprise software spending, as stated by Gartner.

2020 a great year for Cisco

Networking giant Cisco is the latest to lay blame on the world economy in general terms and slower than expected enterprise deals in its latest quarter more specifically.

After its Q1 2020 financial call in November, Cisco revamped some of its business units and leadership in order to increase its competitive tactics – primarily in the cloud arena. For example it rolled its Enterprise Networking and Data Center networking teams into one group and that includes cloud computing.

So from Cisco’s point of view, things aren’t gloomy by any means. In fact company’s core-strategy shift to a software and subscription model is clearly going well, according to it. CEO Chuck Robbins said that software subscriptions for Cisco are now at 71% of the vendor’s total software revenue, up 12 points year-over-year. Comparatively four years ago that number was a third or less, he said.

And that is good for Cisco as a business, Robbins said. “This transition to software not only aligns to how our customers want to consume our technology, but we also believe it will lessen the impact of macroeconomic shifts in the future.”

1.       Cloud

Software in a variety of forms will be the focus for Cisco in 2020, and perhaps no area will be more important than its hybrid-cloud-interconnect strategy.

“Cisco will continue to have a significant focus on tying together cloud offerings from AWS, Microsoft, Google and other different cloud manifestations as it looks to help bring consistency across and mitigate the complexity of hybrid-cloud environments,” said Brad Casemore, IDC research vice president for data-center networks.

Foretelling the importance the company puts on cloud interconnect integration, in December Cisco tied ever-closer to AWS by extending its SD-WAN technology to manage and automate connectivity between branch offices and the AWS Cloud via the AWS Transit Gateway, which lets customers connect their Amazon Virtual Private Clouds (VPCs) and their on-premises networks to a single gateway.

With this new support customers will be able to apply network segmentation and security policies to cloud traffic flows. The package will also enable policy exchange between Cisco SD-WAN Controller and AWS Transit Gateway, which will let IT teams implement consistent network and data security rules.

2.       ACI

Cisco is also expected to further enhance its Application Centric Infrastructure (ACI) Anywhere technology, which gives customers the flexibility to run and control applications anywhere they want across private or public clouds or at the edge while maintaining consistent network and security policies across their entire domain.

ACI Anywhere lets policies configured through Cisco’s SDN Application Policy Infrastructure Controller (APIC) use native APIs offered by a public-cloud provider to orchestrate changes within both the private and public cloud environments, Cisco said. Cisco’s Orchestrator helps provision and manage the implementation across multiple sites and services.

Cisco has embarked on this ACI Anywhere expansion strategy already. In addition to its SD-WAN extension to AWS in December, Cisco also extended ACI Anywhere to AWS Outposts. Outposts offers AWS-designed hardware that lets customers run compute and storage on premises, while connecting to AWS’s cloud services.

In September Cisco added new pieces of ACI Anywhere that integrates Microsoft Azure clouds and a cloud-only implementation of ACI. It also rolled out Cisco Cloud ACI for AWS that lets users configure inter-site connectivity, define policies and monitor the health of network infrastructure across hybrid environments.

There are many that think that Cisco needs to take bolder steps towards integrating hybrid clouds.

3.       SD-WAN

While the cloud is a big growth area for Cisco, it will also further develop SD-WAN, which is a big deal because IDC says almost 95% of enterprises expect to be using it within 24 months. Cisco says that as of August 2019, 70% of the Fortune 100 is using some form of Cisco’s SD-WAN. It also said late this year that it had 20,000 customers using its SD-WAN across its Viptela and Meraki lines.

What’s critical for Cisco is the intersection and integration of the network and security – it is moving them closer together. That’s particularly important in the SD-WAN arena as those two technologies become intertwined.

4.       Security Integration

Better security for cloud interconnect, SD-WAN and other environments will be an area where experts expect Cisco to show a lot of activity.

That will reveal itself in continued efforts to interlock and integrate security as the company moves toward more holistic security.

Cisco Tetration Analytics introduced in 2016 gathers information from hardware and software sensors and analyzes the information using Big Data analytics and machine learning to offer IT managers a deeper understanding of their data-center, private- and public-cloud resources. It includes the ability to improve enterprise-security monitoring and simplify operational reliability.

Cisco’ defines zero trust as an all-inclusive approach to securing authentication and access, while offering segmentation and policy-setting capabilities across an organization's networks and applications. Cisco customers can expect the company to continue adding zero-trust capabilities across its software portfolio.

A recent Forrester Wave report stated that Cisco has spent significant time and expense to realign much of its security portfolio to enable or enhance zero trust, including integrating and operationalizing authentication, supported by technology it acquired with Duo.

Cisco paid $2.35 billion in cash and stock for network-identity, authentication and security company Duo in 2018. Cisco says Duo helps protect against breaches with cloud-based software that verifies the identity of users and the health of their devices before granting access to applications.

Challenges ahead for Cisco in 2020

The right steps for Cisco will be to upgrading their SD-WAN products to include specific zero-trust connectivity management, and they are afraid to do that because it might overhang their existing security products, experts point out. They need to broaden their vision of security to envelop SD-WAN but also to secure cloud-native, Kubernetes-distributed applications.

Zero trust is also reflected in Cisco’s overarching security Threat Response platform which includes a number of core Cisco products, among them Umbrella, advanced malware protection for endpoints, and intrusion protection.

Experts predict Cisco will continue to fill out and improve integrations with its threat platform especially where it involves the cloud and access at the network edge.

According to Cisco, its security business grew 22% year-over-year from Q1 2020 to Q1 2019, and experts expect the company to continue that success in 2020.