Barcelona event shows off ingredients for growth
CCS Insight’s enterprise research team — Bola Rotibi, Angela Ashenden and Nick McQuire — reflect on reasons for bullish optimism at Cisco.
At its recent Cisco Live event in Barcelona, Cisco Systems showcased a strategy that, while grounded in its network hardware heritage, embraces a software-driven approach to support greater levels of automation and programmability in its products and solutions.
The strategy recognizes the need for simplicity in the face of the complexity inherent in a technology-laden, hybrid IT landscape. Equally, it’s a savvy repositioning of a portfolio once centred on proprietary technologies and siloed products to the use of more open and common software standards and practices. The result, Cisco hopes, is a broader reach and greater appeal to prospective clients.
The Cisco Live event drew an audience of nearly 20,000 customers and partners; it saw several important announcements in networking, applications, security and collaboration. Here we lay out our impressions of the event and what it means for Cisco and the wider market.
Major Themes
The dynamic nature of the technology market, a challenging macroeconomic climate and the need to raise revenue growth mean all organizations need better support to navigate various technologies and infrastructures. During the keynote presentations at Cisco Live, the company emphasized the strength of its capabilities and the integrated solutions and services it offers to help its customers transform, innovate, improve experiences and raise productivity for their employees, partners and clients.
Specific focus was placed on:
- The business model for innovation, transformation and delivering exceptional experiences
- Trust, a de facto requirement for technology-enabled operations
- Effective control and management of change stemming from new technology requirements
- Security and data privacy as the ways of sharing information broadens
- The importance of social responsibility to people and communities
At the event, Cisco showcased its differentiation in a market characterized by a breadth of technologies that offer value to businesses but create a vortex of disruption.
Areas of Competitive Differentiation
The measure of a software supplier in a climate of overwhelming technology change is less about how well it can articulate a story of capability, but how good it is at demonstrating the relevance and value of its portfolio and partner ecosystem in the context of the challenges facing its prospective clients.
In this regard, Cisco’s differentiation emerges in the way that it has transformed the narrative so that the network is now a more integrated secure platform for centralizing and expanding operational control right out to an organization’s edge connections. Interaction and data collection at the edge is a new frontier for delivering business and operational value.
Software-driven operations that allow for greater programmability of networks are the foundations of Cisco’s software-defined network products. They underpin the company’s own transformation into a more IT-focused organization. This is recognized by many of its partners, particularly those looking to support Cisco in building up a more convincing strategy and portfolio for assisting the convergence of the IT and operational technology environments of many industrial organizations. The network presents a common information and connectivity layer and therefore an obvious mutual point of visibility and control.
The string of announcements and product releases at the Cisco Live event build on many of the strategic initiatives set by Cisco’s leadership team over the past three years. They reinforce the company’s central message that it is the bridge to all things transformative and possible through IT and its supporting infrastructure. This message is especially pertinent to its offerings for sectors such as healthcare, manufacturing and education, and to customers such as Rakuten, which has worked with Cisco and other suppliers to build a fully virtualized and automated cloud-native mobile network optimized for 5G.
Beyond the focus on cementing its intent-based networking portfolio, the event presented a more integrated view of the core products in its portfolio that Cisco believes will help organizations achieve the business outcomes they seek.
AppDynamics Gets a Visibility Boost
AppDynamics, an industry-leading application performance monitoring solution that Cisco acquired in 2017, headlined the company’s ongoing move to provide sharp visibility into the infrastructure systems and software code components that underpin front-end business transactions. Cisco made three important announcements that allow precise impact analysis of business transaction operations. All three products will become available in the second quarter of 2020.
AppDynamics Experience Journey Map automatically provides visual representations of the most important user experience journeys in mission-critical applications. By focusing specifically on business metrics and app experiences, it offers a single correlated view of business performance, user experience and application performance.
Cisco Intersight Workload Optimizer offers workload and cost optimization facilities that work on hybrid application architectures and take performance, cost and compliance constraints into consideration. Together, AppDynamics and Intersight Workload Optimizer provide an impressive tag-and-trace capability that works on multiple domains, on-premises and in the cloud, and for all connected assets and applications within the network and data centre. Importantly, the combination of both products identifies and aligns key performance indicators to better correlate the true performance of business transactions and pinpoint corresponding issues in back-end systems, offering a level of visibility that is so often missing.
Cisco HyperFlex Application is an integrated container-as-a-service product that offers the obligatory ease of provisioning, operating and managing Kubernetes containers across all domains, end to end.
Cisco has long claimed an ability to deliver greater depth of visibility into the infrastructure supporting application workloads through its command of the network layer. However, the steps that it is taking in expanding AppDynamics reach into front-end applications and mapping the user journey more comprehensively, help raise Cisco’s profile in areas outside its network origins.
Its foray into territories more associated with established e-commerce platform providers and front-end application suppliers presents an opportunity for an ecosystem to deliver a more integrated, comprehensive visibility mapping infused with artificial intelligence (AI) and machine learning that many customers and their IT organizations will welcome. Cisco working with partners to showcase the potential of an integrated, end-to-end collaboration will send a powerful signal that demonstrates the effectiveness of its solution and its pivotal role in workflows.
Security and Beyond
Another major area that stood out is Cisco’s position on security and trust. In her opening keynote presentation, Wendy Mars, president of Cisco’s Europe, Middle East, Africa and Russia region, stated that customers continue to push Cisco on security, privacy and transparency for their workforces, workplaces and workloads (see below). It was also a timely reminder of one Cisco’s areas of advantage.
Wendy Mars at Cisco Live 2020, Barcelona
Data security is now the biggest concern for most organizations, as highlighted in CCS Insight’s IT Decision-Maker Workplace Technology Survey 2019. It therefore came as no surprise that Cisco made security a major theme of the event. The company announced a new security architecture for industrial applications of the Internet of things (IoT) that uses Cisco’s monitoring and visibility capabilities to detect transgressions and vulnerabilities quickly and remediate them automatically. Given the increased attack surface created by digitization and broader and more-open connectivity, customers will welcome the maturity of Cisco’s portfolio to display greater levels of support for automation and best practices recommended by AI and machine learning.
Security is a key strength for Cisco. Past security announcements highlight the company’s ability to recognize the operational signatures of connected products and systems and test for vulnerabilities and risks in encrypted traffic without the overhead of decryption. The addition of a more comprehensive security architecture for industrial IoT demonstrates the firm’s correct approach in pursuing the principle of security by design.
Additionally, the breadth of its products in security, from firewalls, gateways and cloud access security brokers to identity and multifactor authentication and threat response, are all solid foundations for it to capitalize on the trends of “zero trust” architectures, supplier consolidation and product integration in security. According to our decision-maker survey, for example, 70% of organizations plan to reduce the number of security suppliers in the coming year.
Ramping Up the Artificial Intelligence in Collaboration
In collaboration, the headline announcement was the launch of Webex Meeting Assistant, which provides AI- and voice-enabled features for capturing notes and actions during meetings, as well as closed captioning and transcription services. The news builds on the Webex Assistant capabilities that Cisco launched for Webex Rooms in November 2017 and marks the first phase of the integration of Voicea, which it acquired in September 2019.
This is an important move for Cisco, which faces strong competition in the online meetings and video calling space from the likes of Microsoft Teams and Zoom. Other collaboration announcements at the event included expanded data residency options for Webex Teams to allow all content, metadata and encryption keys to be stored within a specified region; only US and Europe regions are supported so far. Cisco also announced the Webex Room USB, a new meeting room device designed for small organizations and priced less than $1,000.
Once the de facto standard for online meetings, Cisco Webex is now under pressure to better differentiate itself in a noisy market where competitors like Microsoft are exploiting their considerable weight in AI to augment and enrich their meetings technology. Cisco has made several acquisitions in this area in addition to Voicea, such as conversational AI player MindMeld in 2017 and relationship intelligence supplier Accompany in 2018, which have collectively fuelled Cisco’s “cognitive collaboration” initiative. The latest Webex Assistant announcement builds on these activities, but there is still more to do if Cisco is to move ahead of the competition.
Cisco also needs to improve its product strategy for Webex Teams. Though it is positioned as a team collaboration tool and a competitor to Microsoft Teams and Slack, in practice it remains largely a traditional instant messaging product and an extension of Webex Meetings, with limited emphasis on team productivity, automation and project-based work. Cisco needs to move quickly to avoid falling too far behind here; its announcement at Cisco Live Europe about integrating Webex Meeting and Calling with Microsoft Teams simply serves to highlight where the market momentum is in this area.
Cisco announced several enhancements to its range of contact centre products, including the launch of Webex Experience Management following the company’s acquisition of CloudCherry in October 2019. The contact centre is a growing area of focus for Cisco, which has been building out its capabilities and profile here since acquiring BroadSoft in February 2018. Cisco also signalled its expansion into the large enterprise market with the general availability of Webex Contact Center Enterprise, which scales to tens of thousands of agents.
DevNet Certification Formalizes Career Progression
In our view, Cisco DevNet is one of the most important offerings to emerge from the company, and as valuable as the transition to software-defined and intent-based networking. Cisco DevNet is a development programme that supports developers, IT and network professionals and engineers to understand and learn the full extent of network programmability. More importantly, it opens up the capacity for driving transformative network automation, enabling flexible, integrated operation and innovation at the network layer. There is much to explore about DevNet; we intend to cover the programme in future blog posts and reports.
At Cisco Live 2020 in Barcelona, the company launched the Cisco DevNet Certification programme. First announced at Cisco Live in San Diego in June 2019, it provides a structured way for companies to recognize and reward the DevNet learning process at the same time as providing a tangible and shared career path, and investment for the network and development community. Aligned to Cisco’s well-established and highly prized networking certification process, DevNet certification could mark a tipping point that raises the profile and capacity of the network beyond its traditional audience.
Conclusion: The Right Ingredients for Growth
On 12 February 2020, Cisco’s results for its fiscal 2Q20 revealed a 4% decline in revenue. The dip highlighted the cautiousness that continues to exist within organizations wary of a global economic climate beset by uncertainties and the prospect of low growth in key regions such as China. Firms are holding back spending on infrastructure renewals and investing in transformation programmes that implement the latest technological advances.
However, Cisco has developed a portfolio of solutions and services together with improvements in how it engages with its partner ecosystem to allow for more enriched and beneficial interactions. Crucially, the company has travelled some way from its heritage as a provider of network hardware, embracing a future that will need more-intelligent software-defined network connectivity with the flexibility to reach to all edges of corporate operations. As the role of a CIO shifts from being a builder of systems to a broker of systems, Cisco’s transition to the delivery of a simplified and integrated portfolio, backed by core values of trust and social awareness and greater support of its ecosystem, should appeal.
The company is clearly stepping up to serve the new generation of application demands in myriad industry sectors. It is also expanding its support of technical and social change in emerging and developed markets through its Country Digital Acceleration programming.
Importantly, Cisco has gone to considerable lengths in developing a broader partner ecosystem. However, the pursuit of hybrid, multiplatform support entails greater demand for open integration and interoperability across multiple systems and applications. Cisco must do more to demonstrate the strength and breadth of its cross-platform support if it is to reverse perceptions of a siloed portfolio and realize the value of its software-driven operations and control in a hybrid landscape.
The company operates in a highly competitive market with pressure coming from network operators, hyperscale cloud providers and other purveyors of infrastructure solutions and services. All promote similar value propositions to an audience often overwhelmed by what’s on offer and the skills needed. Cisco is not always the obvious choice of supplier or partner when selection requirements go beyond the network plane, so the company must work hard to differentiate its story and products.
That said, there is much to commend Cisco’s drive to support organizations looking to reimagine their applications, reinforce IoT cybersecurity and secure data. The network as a platform positions Cisco well. It offers a tangible foundation for transforming infrastructure and teams, raising the visibility into a hybrid IT estate, and so measuring the true impact on business transactions.