Wednesday, July 29, 2015

Business Transformation Through Innovation

Based on a presentation by Jim Walsh the Vice President and Chief of Staff at CISCO

Jim’s opening statement is “Our customers success drives CISCO success”. To understand CISCO’s strategy we must first understand what our customers are going through. This is one of the most difficult times for our customers. “IT” is under siege from:

  • Emerging technology
  • The business Implications of this new technology
  • The expectations that come with new technology

The two most profound are Mobility and Cloud. Cloud is very disruptive and accelerates the pace of development, delivers pay-as-you-go models and is dynamic in nature. If you contrast this to the pace of regular IT, it tends to be slower and less efficient. Mobility has changed customer expectations; users can interact wherever and whenever they like; Application changes in-flight are accepted because they deliver the latest features and additional value.

Compounding this problem is the internet of everything. Cloud applications are built on different platforms such as OpenStack. We need to innovate and adopt these technologies however IT is challenged by flat budgets and having to deal with the complexity of security and compliance.

80% of Money in enterprise IT is locked in lights-on spending and very little leftover for innovation. Gartner predicts that 90% of current IT budgets will be spent outside IT by 2020. 52% of customers are using SaaS solutions and 55% of companies are turning to Cloud for lower costs(according to Gartner). Based on CISCO’s own review of customer environments, IT tends to underestimate the amount of Cloud usage by a magnitude of 5 to 10 times in their environments.

All industries are being impacted. In every industry this technology is disrupting the business model. In addition existing customers of an industry are being impacted by non-traditional competitors entering the market. Amazon has delivered 852% revenue growth between 2005 – 2013. Uber billed 2.8 Billion in 2014. New models in finance like Lending Club which crowd funds loans are appearing. Services like Apple Pay are getting in front of financial transactions formerly delivered through traditional financial institutions.

Digitization is creating new value everywhere. This scares internal IT organizations however the opportunities are boundless. Digitization is based on device-to-device communications and the data being used to drive analytics. It is a 19 trillion dollar industry. To deliver services in this new era you will need to up your game in order to be relevant to customers.

CISCO is finding that the public sector is adopting digitization faster than anyone else. CISCO believes every city will become digitized in order to compete for business and citizens on a global scale like the City of Mississauga.


CISCO is in the process of building the largest distributed development platform for business to deliver applications on (see Intercloud below). CISCO refers to the new architecture approach for this platform as Fast IT. You cannot talk about Fast IT unless you talk about software. CISCO has committed to making everything that is provided in hardware, software.

CISCO believes security has to move from the perimeter to something that is fully integrated into every base level component. Without security the internet of everything will end. Where the magic happens is in taking the software, integrating automation and accelerating decisions by leveraging analytics. Many customers are going to be looking at partners to help them through this complexity.

Digitization will drive a necessary network refresh as all this analytics will need to be move to a distributed model, Take for an example an autonomous car; the decision making needs to happen at the vehicle not centralized and then responded to as the inherent delay is problematic. This means that we need an application centric network. The network will advertise its features to the application and the application will leverage that information to respond accordingly.

CISCO is looking at the current environment which is a world of standalone clouds. CISCO believes in an “Intercloud” concept which connects any Converged Infrastructures to any Cloud provider with no compromise. This provides Choice, Compliance and Control. This is how you keep the game fair as no individual service provider can lock customers into a vendor specific solution. The Intercloud model is a partner driven solution which will launch in August. This allows partners to offer there service globally without building there own infrastructure.