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Why Cisco is winning the IoT race

Everyone is vying for a spot in the Internet of Things things race. How has Cisco managed to take pole position?

This article can also be found in the Premium Editorial Download: MicroScope: MicroScope: April 2016:

As IoT makes the transformation from a talking point to an undeniable reality, all of the major vendors are vying for as big a piece of the IoT pie as they can comfortably munch. Microsoft, IBM, Intel, Google, and AWS have all thrown their hats into the ring and each has a unique proposition to bring to the fight.

But there is one fighter that has a unique set of capabilities.

Cisco is the undisputed champion of networking, with 80-something-percent of the world’s data traffic flowing through its network.

At the peak of the dot-com bubble, Cisco surpassed Microsoft, becoming the most valuable company in the world. However, the firm was a victim of its own success and less than a year later, it was forced to lay off 11% of its workforce. By 2008 Cisco began losing its networking equipment marketing share, and despite gaining a strong foothold in the unified comms and collaboration markets, the company was widely regarded a legacy provider, not destined for success in the world of Web 2.0.

Of course, Cisco would always have a place in the world. It was, after all, still providing much of the backbone to power the World Wide Web. But investors want growth and companies are obliged to do what they can to deliver it. There was, for a time, significant doubt over – how exactly – Cisco would manage this market transition. It was near on impossible for traditional vendors to compete with cloud-native companies in an increasingly software dominated landscape.

The Internet of Things hysteria was exactly what Cisco needed to reverse its fortunes.

The San Francisco-based company made the not-particularly-savvy observation that in order for IoT to become truly ubiquitous, all of the ‘things’ would require networks. Hardly a ground-breaking observation, but one that set Cisco on a new path. 

The edge of success

Cisco took a long hard look at the IoT paradigm and began playing to its strengths. A great example of this, is Cisco’s play on edge computing.

The networking giant had already been integrating compute capabilities into its routers and quickly realised that edge computing could prove to be disruptive to the central computing paradigm. Bandwidth is widely viewed as the most significant inhibitor in the world of IoT. While Moore’s Law sees compute power nearly double every two years, the same can not be said for bandwidth. With billions of sensors streaming data 24 hours a day, it becomes untenable to assume that it can all be pushed back up to the cloud, analysed and acted upon in real time.

Why not process that data as close to the edge of the network as possible? Not only does this remove the burden on the core network, but it allows for near-real-time analytics.

While the concept of edge computing is as old as the internet itself, Cisco has revitalised the model, rebranding it as ‘fog computing’ (like a cloud, just closer to the action).

Cisco’s fog computing technology is still in a prepubescent phase, but is available in the form of IOx – a middleware platform that sits on devices such as routers. This clever combination of hardware and software allows developers to take control of analytics at a local level and promises to play a fundamental role in the IoT world. While edge computing doesn’t belong exclusively to Cisco, the firm has a major advantage in that its hardware already permeates most networks and so it is not a major leap to bring compute capabilities closer to the edge.

Partnerships

Cisco’s hardware traverses the competitive divide. You’d be hard pressed to find a vendor that doesn’t have Cisco equipment somewhere in its technology stack. The networking giant seems to have hit the IoT market with the same partnering ethos that got it so far in the networking world.

Cisco quickly partnered with General Electrics. This was a no brainer. GE is a leading supplier across the entire industrial landscape, from manufacturing and aviation, to energy and transportation. Cisco and GE are working to integrate GE’s Predix software on Cisco networking products to enable the collection and analysis of asset performance and operational data anywhere in the network.

Cisco has also signed a memorandum of understanding (MoU) with SK Telecom, which will see SK’s ThingPlug IoT platform integrated with Cisco’s fog computing solution.

Acquisitions

To become the world’s IoT overlord, Cisco knew that it would have to up its software game. The firm has been strategically acquiring companies at a startling rate in order to give it the software capabilities needed.

The acquisition of Parstream in 2015, was particularly noteworthy and ties neatly into the fog computing concept. ParStream provides a specialised database built for IoT environments, allowing customers to compute and analyse large amounts of data at the edge in real time, with minimal infrastructure and operating costs.

More recently, Cisco announced its intent to acquire Jasper Technologies. One of the biggest challenges facing IoT is the lack of a ubiquitous framework. There is no single platform capable of tying all things together, whilst providing automation and analytics capabilities at the same time. In the enterprise space, Jasper’s platform is the closest thing to a full blown solution that exists and so this acquisition perhaps represents the most significant piece of Cisco’s IoT puzzle. Jasper provides a platform that connects, optimises and automates IoT environments, analysing data along the way. It is by far the most prevalent IoT platform on the market today and could ultimately become the backbone of Cisco’s IoT ecosystem. 

What does all this mean for channel partners? 

At the moment, this is the million-dollar question. As of right now, Cisco’s IoT ambitions look something like an unfinished jigsaw and it can be difficult to see where the channel fits in. Take Jasper as an example. The IoT provider deals almost exclusively with carriers and service providers. There is currently little opportunity here for channel partners. One can only assume that Chuck Robbins and his executive team have a well-defined strategy in which all of the pieces fit nicely together. When that happens, Cisco will be reliant on its channel to drive the vision forward.

Wendy Bahr, senior vice president of Cisco's Global Partner Organisation, told MicroScope that Cisco’s IoT vision should be viewed as a slow burn strategy.

“I think on any journey like the Internet of Things, it’s a series of steps,” she said.  “An important step with the acquisition of Jasper is that we have a platform that really allows for that machine to machine element, complete with very robust analytics and billing.”

“Yes, today it is a service provider play with many of our largest enterprise customers. That in itself is very powerful, but it’s where we take that capability, I think is the exciting bit.”

Bahr says that for partners who want to get involved in the IoT space today, Cisco has already built the necessary capabilities into its portfolio.

“[Partners] can already go to the head of a workplace and say: ‘You have several disparate networks, you don’t have the appropriate level of security, you’re not collecting your data, it’s all in separate stovepipes. You need to be able to look at your analytical data, you need to be able to secure your systems and you need one network to be able to do that. I have the tools and the skills to bring the ecosystem that will make this a reality.”

Bahr is referring to a number of IoT partner specialisations that Cisco has introduced, giving the channel the knowledge and the skills to begin dipping their toes into the world of things.

The specialisations include: ‘Connected Safety and Security’, which provides training on designing, reselling, installing, and maintaining video surveillance and access control solutions; ‘Manufacturing’ which, as the name suggests, provides expertise on connecting equipment with data for the manufacturing industry; and ‘Industry Expert’, which allows partners to combine their OT experience with Cisco IT networking expertise in order to gain a comprehensive working knowledge of all things IoT.

Bahr says that by taking the plunge now, partners will be well equipped for Cisco’s final act, whatever that might be.

“At some point down the road, that go to market motion, coupled with a platform [like Jasper] is going to create a unique advantage for both our partners and for Cisco. But in any market transition, it takes a series of steps to get to the end state of the journey.”

Cisco is winning

There will be no one winner in the Age of IoT. There are too many moving parts to worry about monopolies. Machines, sensors, networks, clouds, analytics solutions and, of course, people. By its very nature, IoT will always be here, there and everywhere.  And there is a long road ahead; plenty of time for the rules to change.

But as of right now, Cisco is leading the pack. It has become a thought leader in this new space, shaping the debate and thinking outside the box. More importantly, Cisco isn’t just talking the talk – it is walking the walk. It is fully committed to transforming itself into an IoT-first company and is making all of the right moves to remain a dominant force in the next computing era.

This was last published in March 2016

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Innovation isn’t determined by how groundbreaking an idea is. I recently heard someone say that innovation is a small change that makes a difference.
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