Cisco Systems, Inc. (NASDAQ:CSCO) CEO John Chambers warned that the IT industry will witness “brutal consolidation” in the next few years. Mr. Chambers was speaking at the company’s annual Cisco Live 2014 event in San Francisco on Monday. He said that now the pace of change in the technology industry is twice as fast as it was in 2011. Chambers predicted that many of the current tech heavyweights will disappear in the next 10 years. Hewlett-Packard Company (NYSE:HPQ) and International Business Machines Corp. (NYSE:IBM) haven’t seen a revenue growth for some time.

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Cisco’s progress in ACI should alleviate SDN concerns

Cisco Systems, Inc. (NASDAQ:CSCO) is betting big on the Internet-of-things to drive its long-term revenue growth. Earlier this month, the company announced that it will invest another $150 million in the Internet-of-Things (IoT) startups over the next two years. Cisco has also made some multi-billion dollar acquisitions such as SourceFire to strengthen this game plan. Chambers said that Internet-of-Things requires fast innovations and fast IT at a pace never seen before to deliver the right data to the right devices.

Cantor Fitzgerald analyst Brian J. White said in a research note Monday that the threat of SDN have persisted for about two years. But Cisco Systems, Inc. (NASDAQ:CSCO)’s early stage progress in the Application-Centric Infrastructure (ACI) has started to alleviate the SDN concerns. The San Jose-based company unveiled its ACI vision during last year’s Cisco Live event, and introduced the Nexus 9000 in November last year.

Cisco building the world’s largest global Intercloud

The number of customers for Nexus 9000 and ACI solution has grown from just 20 in Q2 to over 175 in the third quarter. Mr. White says the pipeline is approaching 1,000 customers. And most of them are likely to start generating revenue by next year. Cantor Fitzgerald expects Cisco Systems, Inc. (NASDAQ:CSCO) to move further into the cloud with its Intercloud. In March, the company announced to invest more than $1 billion to build the world’s largest global Intercloud. The Intercloud will be hosted across Cisco and partner data centers around the world.

Cisco Systems, Inc. (NASDAQ:CSCO) indicated last week that it may announce more Intercloud partners at this week’s event. Cantor Fitzgerald expects the company to reveal more about its cloud plans at the Investor Day, planned for May 20. The research firm has a Buy rating on the stock with $29 price target.