Cisco argues that by tying the network to the application, enterprises will have greater insight and management capabilities, which will help them better serve their customers. Which does make sense.
That being said, Cisco admits that it doesn’t yet own the crucial ‘service’ component of the IoT stack and that shifting to a software-as-a-service, service focused organisation itself holds its challenges.
Rowan Trollope, Senior Vice President of IoT and Applications at Cisco, sat down with me in Berlin this week at Cisco Live!, its annual European event. Trollope is an apps guy, by his own description, and he has been brought in to head up this IoT software agenda - bringing a new focus for the networking giant.
Trollope explained that the acquisition of Jasper, which was announced early last year, was because of its ability to automate the provision of IP enabled ‘things’ and its ability to manage the network. Jasper’s programmable interface, according to Trollope, enables Cisco to scale IoT deployments for its customers. He said:
There was no system to automate the network, to say turn all these things on, and provision these to that network - there was no interface to do that. So Jasper built a programmable interface to the mobile network operators for 'thing' makers.
So we are taking that same approach as we build the next generation of the core network itself. The difference is that Jasper did it as a bolt on, we’re doing it right in the core networking infrastructure for the next generation of our networking equipment. Completely automated, manageable, analytics built in, all that kind of stuff. To operate things at scale.
Meanwhile, Cisco last month announced its intention to acquire application performance management company AppDynamics for $3.7 billion. Again, this performance play is about bringing additional management capability to Cisco’s IoT platform - especially for the application that enterprises use to ‘servitize’ their business for consumers (for more information on why IoT is mostly about companies turning from product companies to service companies, see my article here).
The acquisition of AppDynamics was to be able to connect the visibility of the analytics and the application, all the way back down to the infrastructure. Whether that’s cloud or on-premise based infrastructure. The application is the business. When you look at Uber, for example, the Uber app is the business, there’s no other ‘Uber’ business.
Trollope explained that this should give its customers not only visibility into their IoT business, but also enable them to take control. For example, he said, application developers in an IoT company may know that there is a slow load time for a confirmation page, but they might not know that it is being caused by a network problem. Equally, the network people may know that there is a slow network link, but they may not know what impact it is having on the customer.
Cisco is hoping that it can tie these two silos together, will give customers insight all the way from the network up to the application. Trollope said:
What happens when you get insight into the application, it moves you all the way beyond the application to the user. When you can instrument essentially from the user all the way back to the code and the infrastructure, that kind of visibility is highly relevant to the business owner. What was my revenue today? How much am I converting at this particular site?
That all comes from application performance management. You can go all the way down into the weeds and do a specific ERP system to report that, but if you’ve instrumented the application at the user layer, you can actually get it right at the very front. So it’s kind of like leapfrogging to the front of the stack. And then our strategy is to tie that back down to the infrastructure.
He added that this platform will touch all parts of their customers’ business - as becoming a service-focused business requires a rethink of all parts of the organisation. But more importantly, Trollope said that the platform will have “tentacles” that go out to the ERP and CRM, and all other core business systems.
That’s really relevant and puts us in a really interesting position with regards to being relevant to the business transformation.
Once we have closed that acquisition we are going to essentially be connecting all of the infrastructure analytics to the application analytics. So they have one dashboard to see how everything is performing, relative to the user.
According to Trollope, there are five pieces to an IoT business that enterprises will have to assemble. It seems that Cisco is making a play for three out of the five.
The two that Cisco isn’t interested in are the compute for the device (Intel, Qualcomm, etc.) and the app infrastructure (AWS, Azure etc.), which is understandable. Cisco’s strongest position is in the connectivity of the fabric itself - it’s core business.
However, with the recent acquisitions, and by opening up its platform to developers to create IoT apps, it is also making a play for the fourth component - the app itself.
Finally, the area Trollope believes Cisco is lacking, the last component of the stack, but one which it would like to go after, is the service management layer. Given GE Digital’s recent acquisition of ServiceMax, this is an area of the market that is growing in significance. Trollope said:
If you only did the first four, you haven’t really transformed your business, you’ve just connected the device. What IoT allows companies to do is to transform from being a product to a service company.
That transformation is way more interesting than just connecting the device. The ability to have a services business and relationship with your customer that’s an ongoing monetisation relationship. That’s the piece that nobody has. Nobody has this last piece.
However, Cisco’s shift in focus from hardware to software, and integrating the two, also has its challenges, admitted Trollope. He said:
Moving fast enough is a problem. Speed. And the ability to think more like an application company. One of the challenges we have is an opportunity bias problem. Where every opportunity we see, almost, is from the lens of the network.
One of the reasons why I came to Cisco, or at least why I’m in the role I’m in now, is that I’m an app developer. So I’m looking at the problem top down. That’s why I acquired AppDynamics. That’s why we acquired Jasper. These are application technologies that are looking down the stack. It’s new, it’s hard to do new things, but I’ve got a lot of confidence.
Essentially, Cisco is undergoing an IoT transition itself. It is having to do exactly what it wants its customers to do - move from selling products to selling services. And, as Cisco notes, that’s not easy. The one advantage Cisco has over other ‘product’ companies looking to make the transition is that at least Cisco is a technology company - it has, or can attract, the skills to make that happen.
However, as we know, it’s not just a skills problem. It’s a culture and process redesign problem. It’s very hard to make it work. Time will tell. But the important part is getting the fifth servitization component of the stack right - that’s the bit that brings value to customers.