The second quarter

During the second quarter, revenue from Cisco's switching products, which bring in 41 percent of its total revenue, took a sharp drop.

The Nexus 7000

Customers had begun switching to lower-cost Cisco switches that have higher price/performance ratios than the Nexus 7000, Catalyst 2960 and other high-end hardware on which Cisco's earnings had begun to depend too much.

So, led by Chambers, the $40 billion company in other words master of all networking, the global giant whose switches and routers form the core of corporate, government and telecom networks the world over, announced the decision that would bring back its focus and bring its share price back to par:

Shift that will cut 550 jobs from a total of 73,000

Cutting Flip is part of a shift that will cut 550 jobs from a total of 73,000, and cost $300 million. It's only the first obvious move in a series that will probably hit Cisco's consumer products a lot harder than its business business.

Other consumery products and acquisitions are likely to get the axe as then, or meanwhile to be pulled back into the core business.

That, ultimately, will answer analysts' call for focus on the corporate networking business, or rather than the 30 peripheral markets on which it has been spending time – cable set-top boxes, home video, consumer VoIP (Voice over Internet Protocol), home networking, and the late, lamented Flip.

The Ethernet switching market

As owner of 70 percent of the Ethernet switching market and 60 percent of the market for routers, its core business is at the core of nearly every other trend in IT – all of which rely on adaptable, broadband networks to make them work.

Its share of the router market is to tell the truth a pathetic remnant of the 90 percent share it had in 2000; it lost some to Juniper Networks, Alcatel-Lucent and a few others while the past decade.

Pretty broad list

That all in all sounds like a pretty broad list. Nevertheless when you generate $40 billion make the gear so common in corporate data centers and networking closets that it's as a matter of fact unusual to see anyone else's logo, you probably have the resources to cover most of them and enough credibility to make yourself heard in each.

When it comes to cloud computing, WAN optimization isn't an option; it's a necessity. Read this research brief to learn how addressing network limitations can make the difference between success and failure of a cloud-based system.

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