Nothing succeeds like success, but uneasy lies the head that wears the crown. For eight years now, Cisco has mounted an effective campaign to build awareness around the opportunities for improved productivity and new service delivery that can be achieved through the connection of digital processes, an exercise that is now widely associated with the Internet of Things. Engineered by IoT evangelist and chief globalization officer Wim Elfrink, and supported by top Cisco executives as well as a creative market communications team, the IoT campaign has evolved through five discrete stages described by Elfrink as: thought leadership to create a market defined by use cases and business models; creation of solution standards/protocols; revamp of government policies and regulations; development of public/private relationships; and the establishment of new partner ecosystems. “We see this as the creation of a new industry,” Elfrink proclaimed back in 2008, an ambitious agenda that has since been executed with consistent effort and which has met with considerable success. IoT, the Industrial Internet, or IoE, Cisco’s branded iteration that references the connection of people, processes and things, commands significant media mindshare, lingers at the top of analyst lists (year two at the peak of inflated expectations in Gartner’s Hype Cycle), and has inspired the creation of multiple standards groups, product and marketing innovation within many vendor organizations, as well as novel customer implementations across the range of industries. As Elfrink noted at the IoT World Forum in Chicago last October, “IoT is here, it is now.”
Cisco has played a star role in shaping the discourse around IoT for some time now, but what is to be done with success now that everyone, including competitors, are on board? The answer for Cisco SVP, Internet of Things & Internet of Everything Chris White is, “you keep going. You really understand the value add. We will continue to keep innovating. If you look at the set of assets that a $50 billion networking company has in data centre technologies, switching, routing, our ability to marshal those resources into this world and to accelerate things like security and scalability, we have a pretty good hand. I’m not saying we can’t get beaten, or that we can’t get outsmarted, but competition is always good to keep us on our toes. If more companies jump in and embrace this market, it helps validates it.”
On a company level, Cisco has managed to turn this market validation to some measure of growth. Because IoT implementation often represents a set of solutions cobbled together from a number vendor offerings, or from across different business units within a particular supplier organization, this ‘measure’ can be complex, and is not yet well defined by many providers. For its early market strategy, Cisco relied on what White called “lighthouse account strategies,” a borrowing from Geoffrey Moore’s ‘chasm’ theory, in which an account is identified where an IoT project would be recognized by others in the target industry as something that members could relate to. From 10-15 lighthouse accounts established in the early days, Cisco has developed a number of formal use cases with measurable productivity outcomes that showcase IoT benefits. Over this same period, the company has also engaged in internal sales training and education of the IoT partner ecosystem to ensure the right strategies have the right focus at the right time to encourage market movement. According to White, “we are doing the classic tracking of prospects, pipeline and how much revenue we are generating.”
But here’s the rub: what differentiates a switch sale from an IoT switch sale? While products that are purpose built for Iowa – the ruggedized product line, for example, which has been developed for extreme industrial conditions – are easy to count, other assets, such as analytics software or energy management solutions that Cisco is looking to incorporate into Iowa may be less so. “The tricky part,” White explained, “is really tracking what goes into IT and what goes into OT [operational technologies] in customer environments.” Based on analysis of these “buckets,” White estimates that Iowa growth is healthy – “in the 40, 50 or 100 percent annual range, depending on which part of the portfolio [smart cities, sports and entertainment, or industrial] you are looking at.” And while the share of total Cisco revenues that these buckets represent is not sharable information, White noted that Cisco Iowa revenues are now in the “billion plus range.” In addition, he added, Iowa projects generate “a nice pull through” for other Cisco data centre or networking products, which are tracked but not measured as Iowa revenues.
To accelerate IoT revenue growth, Cisco recently introduced a new “IoT System,” composed of “Six Pillars” or technology components, aimed at allowing customers to connect and manage large scale systems of diverse endpoints and platforms, while providing the analytics capability needed to derive value from information, and an application development platform for creation of the tools, services, control, etc. required in unique IoT projects. These six pillars consist of:
- Network connectivity, including purpose-built routing, switching, and wireless products available in ruggedized and non-ruggedized form factors.
- Fog computing, a distributed computing infrastructure for IoT, which extends computing capability, including data analytics applications, to the network edge for fast local processing. Cisco estimates that 40 percent of IoT-created data will be processed in the fog by 2018, and has enabled over 25 of its network products with the edge data processing platform, I Ox.
- Security, an integrated approach to cyber and physical security that blends Cisco's IP surveillance portfolio and network products with TrustSec security and cloud/cyber security products to provide better protection against combined IT and OT attacks.
- Data analytics, provided through an optimized infrastructure that supports implementation of both Cisco’s Connected Analytics portfolio and third party analytics software.
- Management and automation, an “easy to use management system” that provides enhanced security, control and support for multiple siloed functions and enables management of an increasing volume of endpoints and applications.
- Application enablement platform, a set of APIs for industries and cities, ecosystem partners and third-party vendors to design, develop and deploy their own applications on the IoT System foundation.
When deployed together in a single architecture, Cisco claims these six critical technology elements can reduce the complexity of digitization for the customer. In addition to offering ‘one throat to choke’ in response to issues that are likely to occur in sophisticated IoT implementations, Cisco product sets in the new System are presumably optimized to work together, improving the operational efficiencies as well as the complexity of project installment. But labelling products with the IoT system brand may also provide the company with greater insight into the role of IoT in driving product demand and revenues. This focus on the IoT portfolio is also evident in the company’s new solution line up. Along with its “System,” Cisco also announced the introduction of more than 15 new IoT products.
On the networking front, this includes the IE5000, an IE switch that brings connectivity to factory-level manufacturing and cities, the IW3702 wireless access point for connected mass transit systems and city Wi-Fi, the IR 809, IR 829 series (seven new industrial routers with Wi-Fi and 4G/LTE connectivity aimed at transportation or IoT application deployments), the 4G/LTE module for CGR 1000 for utilities, the Mobile IP Gateway (MIG-2450) for connected rail solutions, and 5921 Embedded Services Routers to extend the reach of industrial networking into remote environments.
On the security front, new products include 360° 5MP & 720p IP cameras, which can host third party software applications, and feature a 360° view for situational awareness, as well as audio and digital sensors. Cisco has also introduced Physical Security Analytics, camera applications that have audio detection, sensor aggregation, audio message triggers, metadata generation, local video player and video summarization capabilities.
In data analytics, Cisco has introduced Fog Data Services that allow operators to create policies for monitoring and for executing actions based on data-in-motion in the IoT environment. This service resides on the IOx platform to allow users to integrate custom policies with applications.
To buttress management and automation, Cisco has announced the IoT Field Network Director, management software that allows operators to monitor and customize IoT network infrastructure for industrial scale. The company has also introduced Fog Director, a platform for the central management of multiple applications running at the edge to provide administrators with better control of application settings and lifecycle, and easier visibility into large-scale IoT deployments.
Packaged with testimonials from customers and partners who are building new levels of productivity and product opportunity through the incorporation of Cisco solutions which are now aligned under the IoT System, Cisco’s announcements are designed to reinforce messaging around the importance of an evolving IoT ecosystem. As White observed, “We’ll play to our strengths, while making sure that we are grounded in the reality that says we can’t do it all alone. So partnerships, and investments in things like the innovation centre in Toronto are key to leveraging some of the things we don’t even look at. We look at the world through a certain lens because of who we are. It’s great to get some of these partnerships on board that will challenge us to look at things a little differently.” Interestingly, most of the testimonials hail from the OT, rather than IT sphere: GE, Klas Telecom, Rockwell Automation, Itron, Covacsis, OSISoft, Toshiba (for its manufacturing, transport and smart city solutions), and integrators CGI and Valtellina SpA – a testament to Cisco efforts to build out all the key ICT components – networking, analytics and compute processing – needed in IoT projects, sensors and broadband excepted.