Disrupt or die. Cisco's vision for the Internet of Everything: Part 1

Sean McGrath attends the Cisco Partner Summit 2015 in Montreal and asks whether or not the networking giant can complete its most ambitious transformation to date

Be BOLD – that’s the key message coming out of the Cisco Partner Summit, which kicked off in Montreal on Tuesday.

Over 2,200 global partners and 70 press and analyst attendees descended on the largest city in Québec to see what one of the largest networking companies in the world had to say.

CEO John Chambers has famously been at the helm of Cisco for 20 years and has steered his ship through a series of transformations and countless technology adoption cycles. To his credit, he has (for the most part) been able to foresee change and reinvent the company when necessary; not a trivial task for an organization the size of Cisco. As he said in his keynote, “Cisco has many faults and Lord knows, as the CEO, I do as well; but the issue we don’t miss on is market transitions.”

“Many CEOs, as recently as a couple of years ago, view the IT organisation as overhead and technology almost as an expense,” Chambers said. “And the fundamental change versus the session last year is that almost every CEO, almost every mayor, almost every head of country is beginning to understand that there is a transition going on around digital companies and digital countries that will completely transform their citizenries and their success in the future.”

The transformational change Chambers faces now is undoubtedly the largest hurdle he has had to overcome to date.

Chambers obviously sees where the market is heading, but seeing it coming and responding to it in time are two very different things. The transformational change Chambers faces now is undoubtedly the largest hurdle he has had to overcome to date.

The hearth that Cisco forged its name in no longer exists; with software-defined networking changing the paradigm, the 31 year-old company is very much under pressure to evolve its bread-and-butter offerings. Chambers believes that the Internet of Things is the platform to make this happen.

And Chambers doesn’t just need to transform his own company; he needs to convince channel partners to come on the journey with him. So strip away the marketing fluff from the conference and the key message coming out of Montreal is:

Now is not the time for natural evolution, it’s time for, in Chambers’ words, ‘brutal change’; and not in ‘three to five years through traditional attrition’, but ‘now’.

Underlining every session at the summit is the IoT, or as Cisco likes to call it, the Internet of Everything (IoE). If Cisco is a networking caterpillar, the IoE is its butterfly. It wants to own the Internet of Everything, or rather be the primary facilitator of IP-based connectivity, from the edge to the core and everything in between.

Cisco is not the only caterpillar in town but because ‘things’ need a network, it has a head start. It controls 63% of the router and switches market and 30% of the network security market; thus it already owns a significant proportion of the required infrastructure right out of the gate. But Chambers knows that this is not enough.

The networking firm expects IoE to become a $19 trillion industry within the next decade.

The San Francisco-based company has enjoyed strong growth with its Unified Computing Systems (UCS). Combining servers, storage, networking hardware, security and virtualisation software into a single package, Cisco points to its UCS-M series servers as a prime example of it being a company that can facilitate the individual components of IoE.

The networking firm expects IoE to become a $19 trillion industry within the next decade and is investing heavily in R&D. It will be opening an Internet of Everything research centre in Toronto, Canada this summer, which will, according to Cisco, be ‘the smartest building in North America’. The firm also announced last year $150m to fund early-stage IoE firms around the globe.

Cisco predicts that out of this $19 trillion industry, private business will be generating $14.4 trillion, while cities, governments and other public-sector organisations will be worth $4.6 trillion. Of the total figure, $7.3 trillion of that will be generated by data analytics alone. These are staggering figures and hard to embrace, not least because it represents more than the GDP of the United States.

Assuming that they are even close to correct, then Cisco and its partners will want as big a chunk of the pie as possible, and with analytics representing more than a third of the pie, the networking giant has started pushing what it calls ‘Connected Analytics’. By building analytics functionality into the network hardware and providing front-end visualisation software, Cisco is able to provide real-time analytics in the truest sense of the words. They are effectively streaming analytics at the edge of the network, which in theory, negates the need for traditional analytics solutions (from traditional analytics vendors).

The clearest example of this technology in action was a demonstration in San Francisco, where Cisco placed sensors on a digital billboard. The length of the message displayed to a driver was directly affected by the speed at which the car passed. Faster drivers got shorter messages, slower drivers got longer messages. It is very nifty technology and will undoubtedly play a role in this new world of sensors.

For Part 2 click here

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