Tag: Cisco

The cost of the cloud: How the disrupters are being disrupted

Cisco, Autodesk and Microsoft’s cutbacks and pivots show technology companies are not immune from disruption

A common factor when talking to tech companies is their talk of disrupting industries, they themselves are not immune from change though.

This week networking giant Cisco announced they would cut seven percent of their workforce, nearly 5,500 employees, as the company deals with the shift to software defined networking equipment continues.

Industry commentators are warning Cisco are not alone as software and cloud based services change the tech industry with Global Equities Research’s Trip Chowdhry estimating the sector may shed up to 370,000 positions this year.

Today I had the opportunity to ask Autodesk’s Pat Williams, the company’s Senior Vice President for Asia Pacific, about the challenges facing companies transitioning to the cloud. At the beginning of the year Autodesk announced they would be cutting ten percent, over 900 jobs, as part of a structuring plan.

“I think there was a model that we had that as we moved to a subscription business that said we would see a bit of a drop in revenue and we realised our gross margins would be pressed,” he said.

“What we were trying to do was right-size the business,” Williams continued. “Sometimes you need to do that. It was a very intentional forward looking move we made.”

Autodesk and Cisco are far from the first tech companies to suffer from the software industry’s shift to the cloud. Microsoft have been probably been the business most affected by the change.

Cisco themselves have been dealing with this shift for a decade as well, with a major restructure in 2011 that saw 6,500 jobs cut.

What is clear in a transitioning industry is that Microsoft, Cisco and Autodesk are far from alone in making cuts. As Autodesk’s Williams points out, it’s probably best for managements to be doing this proactively rather than waiting for the changes to force their hands.

The stories of Cisco, Autodesk and Microsoft show all industries are facing changes. Assuming you’re safe in any sector is brave thinking.

Reaping the security dividend

Digital disruption is driving boards and executives into realising the value and importance of cyber security, Cisco claims.

Boards and executives have finally got the message about security John Stewart, Chief Security and Trust Officer at Cisco.

For most of the computer era security has been seen as an inhibiter to innovation and speed to market, but now with most businesses finding they face a three year time frame to transform in face of digital disruption Stewart says corporate managments now see security of their products as being a valued feature.

Stewart bases his view on an online survey, Cybersecurity as a Growth Advantage, where Cisco polled 1,014 senior executives with extensive cybersecurity responsibilities in 10 countries and 11 in-depth interviews with senior executives and cybersecurity experts.

From this, Cisco found a third of businesses now sees security as being a competitive advantage.

Digital disruption drives the shift

Stewart puts this down to boards and senior executives realising how widespread digital disruption is, “it’s highly unlikely Weight Watchers saw the disruption coming from Fitbit,” he muses. “In fact it’s hard to see how anyone could have seen that coming.”

As a consequence of these widespread and often unexpected disruptions, corporate leaders are trying to shore up their existing positions against unforeseen competitors by shifting to digital platforms as quickly as they can.

“We have to do digital and if we are going to do digital we have to have strong cybersecurity controls,” says Stewart in explaining why cybersecurity is an important part of this strategy.

Security as a cornerstone

“By making cybersecurity a cornerstone of their businesses, security-led digital organizations are able to innovate faster and more effectively, because they have significantly greater confidence in the security of their digital capabilities,” Stewart says.

Certainly managers are worried about the risks of going digital with Cisco reporting many businesses have put projects on hold due to concerns about security risks, “a lack of cybersecurity strategy can cripple innovation and slow business, because it can hinder development of digital offerings and business models.”

According to Cisco’s findings, seventy-one percent of executives said that concerns over cybersecurity are impeding innovation in their organizations. Thirty-nine percent of executives stated that they had halted mission-critical initiatives due to cybersecurity issues.

Encouraging moves

While the possibility that corporate leaders are taking cyber security seriously is encouraging, that change is yet to be seen in the marketplace, particularly in the consumer Internet of Things market where being first trumps security, design considerations or even basic safety.

The real test for how important cybersecurity really is remains in the marketplace — will customers pay more for secure products?

One sense that in Cisco’s marketplace of enterprise customers where security failures could have expensive, embarrassing and possibly catastrophic consequences, customers will pay more for trustworthy devices. In the consumer field it may well be different.

Probably the most important finding from Cisco’s survey is that businesses are now understanding security has to be designed into products and processes rather than being bolted on as an after thought. If that is true, then we have come a long way.

Cracking open the black box

Cisco looks to life in the API economy

One of the things confronting technology vendors in the past five years has been the commoditization of hardware and the opening up of standards. As software has eaten the computer hardware industry, those companies are being forced to make their systems more open.

In that world of open systems, it’s the ecosystem of developers and products around platforms that drives success. The best example being the iPhone where the range of third party apps available made Apple’s product the most compelling on the market.

At Cisco Live in Melbourne last week Susie Wee, the company’s Vice President in charge of the company’s DevNet developer relations program, described how the networking company is opening their systems with Application Program Interfaces (APIs) to build an ecosystem.

“What we want to do is help people with this transition,” says Susie. “With the network, with the infrastructure and with the cloud we want people to get more out of it.”

Cisco, like most hardware companies, are finding the shift to opening their data streams to be wrenching. The business model of a decade ago involved mysterious black boxes running on proprietary software with the data dished out sparingly.

While the the ‘black boxes’ still remain, becoming a ‘platform’ and making data available to all comers is very much a cultural shift for once dominant hardware companies like Cisco.

The question for IT hardware companies is how long they can defend their proprietary software systems – the hardware side is already slowly declining as software defined equipment takes over – while establishing dominance with their software and data feeds.

Users too need to be treading carefully as those APIs and the data being fed through them is subject to the business imperatives of the

Cisco hopes they can achieve this through their current market power and business networks, it is a hard ask for them though. For the entire tech industry, the shift to an API driven marketplace is going to be testing.

Paul travelled to Cisco Live in Melbourne as a guest of Cisco

Bringing cybersecurity into the mainstream

The corporate world is taking security seriously says Cisco’s Chief Security and Trust Officer, John Stewart

“Cybersecurity is out of the dungeon and now selling itself as a business service,” says Cisco’s Chief Security and Trust Officer, John Stewart.

Stewart was discussing his company’s security challenges at a Cisco Live briefing at their Melbourne conference yesterday.

The shift to security as a business service follows the pattern of computerisation in business believes Stewart, “at first businesses said you can’t keep important documents on computers, then they said you could only keep important data on computers”

For Stewart, the fact c-level execs recognise the importance of cybersecurity is a positive sign that indicates organisations are taking IT and communications security seriously.

When asked what keeps him up at night, Stewart said it was worries about infrastructure security, the Ukrainian power network’s experience after an attack from a seriously motivated group of hackers indicates just how serious this is.

Interestingly Stewart remains focused on the risks of security breaches, as the Internet of Things rolls out it may well be the integrity of data streams becomes a far greater focus for system administrators and security officers.

Paul travelled to Cisco Live in Melbourne as a guest of Cisco

When software ate the network

Software is eating the IT hardware industry which is a lesson for other businesses

I’m attending the Asia Pacific Cisco Live in Melbourne Australia this week which is starkley illustrating the shift in communications technologies and the business models around them.

To kick off the press program Cisco made a joint announcement with Australian incumbent telco Telstra on the rollout of a smart software defined networking product.

Software Defined Networking uses basic computer hardware, basically glorified personal computers, to do the jobs of the expensive routers, switches and network appliances that were insanely profitable for companies like Cisco a few years ago.

It wasn’t so long ago when Cisco executives were taking technology journalists out to earnestly explain how Software Defined Networking (SDN) was feasible.

Today, SDN is defining both the telco and communications industries as companies like Telstra look at bundling IT networking and software services into their offerings to prop up their falling margins. India’s Reliance Communications are a good example of how providers are trying to shift into new marketplaces.

For telcos, communications vendors  and IT hardware sellers the changing technologies illustrate what Silicon Valley entrepreneur Marc Andreesen meant when he described how “software will eat the world.’

Software is eating the IT hardware industry and telcos are seeing – hoping – it’s another lucrative opportunity. Businesses in other sectors should be thinking about how software is going to change their world.

Paul travelled to Melbourne for Cisco Live as a guest of Cisco

Knowing what we don’t know

Cisco’s 2016 security report show businesses are more uncertain than ever about their network defenses. This is a good thing.

The 2016 Cisco Security report is in many ways an encouraging document, while it describes a litany of threats facing the modern business the fact managers are less confident about their defenses is a good thing.

Of the 2432 security executives surveyed 59% claimed their security infrastructure was up to date against 64 percent said the same. Acknowledging this is motivating them to improve their defenses.

For industry, the real concern is the small business sector where there’s a clear decline in the use of IT security tools. As the Target breach showed, trusted contractors and suppliers provide a weakness in an organisation’s systems that malicious actors are keen to exploit.

In Cisco’s analysis, the main reasons for SMBs lack of concern is their belief they are too small to be valuable to hackers and most of their IT management is outsourced.

A shift to the cloud shouldn’t be understated, particularly given many SMBs are shifting their IT functions onto cloud services. While this doesn’t fully protect businesses, the cloud providers certainly offer a far higher level of protection that the local plumbing contractor relying on a mom and pop computer support service.

The bad guys however are responding to that shift with Cisco reporting increased browser based and DNS attacks, both of these are useful in compromising cloud computing services which means both service providers and end users have to be vigilant about security.

At all levels of business though the lack of confidence in security has major ramifications as the Internet of Things is rolled out and common devices start being connected to fragile and often compromised networks.

The good news for vendors like Cisco is this lack of confidence could spur a new wave of business investment as companies improve their network security.

Another important aspect of CIOs and business owners not being confident about their network security is they are far less likely to assume their systems are safe or to passively accept vendor assurances about their safety.

For all of us a customers and users of these technologies, a greater focus on security by the organisations we deal with should be welcomed as well.

Anatomy of an internet exploit

The Angler exploit tells us much about the challenges of internet security

As one does on a weekend, I’m working my way through the 2016 Cisco Security Report.

There are plenty of insights on online security trends which I’ll cover in tomorrow’s blog post but one aspect that sticks out in the report is the case study on the Angler Exploit which takes advantage of hacked domain registrar accounts to create new domain names to serve phishing pages, ransomware sites and malicious advertisements.

Dealing with these sites is a major problem for network administrators and Cisco claims many of the domains registered haven’t yet been used by online criminals.

The Angler exploit shows just how complex internet security has become. The issue of trust is a complex thing and certainly no-one can trust every domain we see. That there are thousands of ‘disposable’ domains available to scammers only makes things more difficult for the average user.

Diversifying South East Queensland

Is being designated a ‘smart region’ enough to diversify South East Queensland’s economy?

Australia is one of the world’s most urbanised countries with the bulk of the nation’s population clustering in half a dozen centres mainly strung along the east coast of the continent.

The northernmost of Australia’s population centres is South East Queensland, a sprawling collection of suburbs extending from the upper class enclave of Noosa Heads down to the Gold Coast and the New South Wales state border.

Cisco believe this sprawling region of three million people can become a ‘Smart Region’ with the use of technologies such as intelligent lighting and parking, citizen applications, and smart power metering could add up to 30,000 jobs and $10 billion of value to the community over coming years.

“The residents of South East Queensland told us they want to experience greater convenience and integration of public transport, greater digital engagement and intimacy in their cities, more reliable local government services, and new digital ways to further reduce the cost of red tape,” said Cisco Australia & New Zealand Vice President Ken Boal in releasing the South East Queensland: A Smart Region report.

Local civic leaders in the cities making up the South East Queensland conurbation see this as an opportunity to grow their economies.  “The future of cities and regions and their ability to create enduring employment opportunities are entirely linked to their digital capabilities,” says Sunshine Coast Mayor Cr Mark Jamieson while Ipswich Mayor Paul Pisasale said Ipswich was already preparing for a strong future as a digital city.

“We have recognized that building and taking advantage of digital highways now will set Ipswich on a secure and successful path to capitalise on the ballooning digital economy,” said Cr Pisasale.

For South East Queensland, the challenge in creating new industries and jobs is becoming acute. The Australian miracle economy has left the region – like most of the nation – hopelessly uncompetitive and the bulk of employment is in domestically facing service industries underpinned by property prices.

In fact, the residential construction industry has been the mainstay of the SE Queensland economy and the region remains probably the most economically volatile of the Australian conurbations given its high dependence upon the building sector.

The digital economy does hold out hope for diversifying South East Queensland’s economy from building and domestic tourism, but the work is just beginning. Cisco’s smart region initiative is a first step, but there’s much more work to be done by business and civic leaders.

Brisbane image, “Brisbane CBDandSB” by Stuart Edwards. – Own work. Licensed under CC BY-SA 3.0 via Wikimedia Commons – https://commons.wikimedia.org/wiki/File:Brisbane_CBDandSB.jpg#/media/File:Brisbane_CBDandSB.jpg

Towards the zero defect economy

The Internet of Things promises to eliminate defects which is good news for most, but not all, industries

At 2.03 in the morning of July 11, 2012, a Norfolk Southern Railway Company freight train derailed just inside the city limits of Columbus, Ohio.

The resulting crash and fire caused over a hundred people to be evacuated, resulted in over a million dollars in damages and created massive disruption throughout the US rail network.

Could accidents like this be avoided by the Internet of Things? Sham Chotai, the Chief Technical Officer of GE Software, believes applying sensor technology to locomotives can detect conditions like defective rails and save US railway operators around a billion dollars a year in costs.

“We decided to put the technology directly on the locomotive,” says Chotai in describing the problem facing railroad operators in scheduling track inspections. “We found we were mapping the entire railway network, and we were mapping anything that touched the track such as insulated joins and wayside equipment.”

This improvement in reliability and its benefits to business is something flagged by then Salesforce Vice President Peter Coffee in an interview with Decoding the New Economy in 2013.

“You can proactively reach out to a customer and say ‘you probably haven’t noticed anything but we’d like to come around and do a little calibration on your device any time in the next three days at your convenience.'”

“That’s not service, that’s customer care. That’s positive brand equity creation,” Coffee says.

Reducing defects isn’t just good for brands, it also promises to save lives as Cisco illustrated at an Australian event focused on road safety.

Transport for New South Wales engineer John Wall explained how smarter car technologies, intelligent user interfaces and roadside communications all bring the potential of dramatically reducing, if not eliminating, the road toll.

Should it turn out the IoT can radically reduce defects and accidents it won’t be good news for all industries as John Rice, GE’s Global Head of Operations, pointed out last year in observing how intelligent machines will eliminate the break-fix model of business.

“We grew up in companies with a break fix mentality,” Rice says. “We sold you equipment and if it broke, you paid us more money to come and fix it.”

“Your dilemma was our profit opportunity,” Rice pointed out. Now, he says engineering industry shares risks with their customers and the break-fix business is no longer the profit centre it was.

A zero defect economy is good news for customers and people, but for suppliers and service industries based upon fixing problems it means a massive change to business.

Cisco expands its innovation centre network to Australia

Cisco opens its latest innovation centre in Perth to focus on the oil and gas industries

Today Cisco launched their latest Internet of Everything Innovation Centre in Perth, Western Australia. The facility joins the seven existing centres around the globe which includes Rio de Janeiro, Toronto, Songdo, Berlin, Barcelona, Tokyo and London.

As a joint venture with resources company Woodside and Curtin University, the centre will initially focus on the gas industry and will include a state-of-the-art laboratory, a technological collaboration area, and a dedicated space to show the Internet of Things in action.

Oil and Gas is one of the key sectors for targeted by Cisco in their Internet of Everything push with Brad Bechtold, the company’s Energy Lead, telling Decoding the New Economy earlier this year how the IoT is expected to deliver an eleven percent reduction of costs for the $1.5 trillion dollar a year industry.

Bechtold believes remote sensing and operations will be the driver of many of the cost reductions along with detailed analytics enabling more efficient operations.

Many of these technologies will be tested as part of Woodside’s Plant of the Future gas project with CEO Peter Coleman saying the scheme will link company’s knowledge base with artificial intelligence, data analytics, and advanced sensors and control systems.

“We are taking a collaborative approach to enhancing our operations as part of our digital transformation journey. This partnership will create a globally competitive centre for excellence that could be leveraged in our LNG operations, as we progress our remote operations capabilities,” Coleman said.

 

The Perth centre intends to bring together start-up companies, industry experts, developers, researchers and academics in an open collaboration environment to create a “connected community” focused on cloud, analytics, cyber security and IoT network platforms.

The Australian Commonwealth Science, Innovation and Research Organisation (CSIRO) has also flagged it intend to join the hub as part of its Square Kilometer Array deep space mapping project.

Another branch of the Australian hub is expected to open in Sydney later this year.

 

 

Cisco and the connected stadium

Cisco’s Mike Caponigro explains the company’s smart stadium strategy

One of the challenges facing sports administrators and leagues around the world is that the quality of broadcast coverage has become so good it’s become increasingly harder to get fans out to the games.

Coupled with the constantly improving television coverage, fans are also expecting more as they go to games with their smartphones and tablets. Part of the solution for venue managers is to roll out smart stadium facilities that enhance spectators’ experience at the games.

Mike Caponigro, Cisco’s head of Global Solutions Marketing for Sports and Entertainment, sees the smart stadium as complementing the ground experience and Cisco are working with over three hundred venues in thirty countries around the world.

Improving the live experience

“Live is always going to be best,” states Caponigro. “You can’t replace that tribal passion of the crowd. No matter how excited I get in my living room or with some friends in a pub you’re never going recreate that enthusiasm.”

However the expectations of sports fans are changing Caponigro points out citing how HD television and the internet is changing the experience for spectators outside the stadium, “fans don’t want to be removed from that action.”

Cisco started their Connected Stadium program when the Oakland Athletics were looking at moving home stadiums seven years ago. While Oakland decided to remain at their existing stadium the company realised the market for connected stadiums was potentially huge, “it really pushed our thinking on how could we service an industry sector that hadn’t been well served.”

Accelerating innovation

“Arguable you’ve seen more innovation in that last seven years in the sports and live entertainment field than in the five decades prior to that,” says Caponigro who attributes the rate of change to consumer adoption of smartphones. “Now we’re working with three hundred properties in thirty countries around the world.”

“What fans are saying is that in order to continue to go to events there are things that need to be tweaked around the experience,” Caponigro states. “We did a study two or three years ago that found seventy-five percent of fans bring a smartphone to the venue. In the latest studies we’re finding ninety percent.”

Those fans are expecting a reliable signal to share information and access data. At last year’s Superbowl the crowd consumed 6Tb of data, half of which was outward traffic. “That just reinforces that fans aren’t just consuming services but it’s also become an increasingly social environment.”

Improving revenues

One of the areas Caponigro sees as an opportunity for connected stadium administrators is in seat management citing the Golden State Warriors NBA team that have used BlueTooth beacons to drive their seat upgrade application to generate $300,000 in additional revenue.

Fans have two frustrations with attending live games says Caponigro, is the convenience of getting to and from the game and not getting a good view of the play from their seats.

The ‘single seat experience’ as Caponigro describes it, uses the stadium’s smart vision TVs and the apps on spectators’ phones to give fans the same access to replays and stats that viewers watching the game on TV or the internet can access.

Making transport easier

Getting to and from the game is another advantage the smart stadium technologies offer both spectators and stadium administrators, by giving real time information on parking and public transport status crowds can be better managed and fans can have a smoother experience travelling into and away from the event.

In the future, Caponigro sees the next wave of innovation integrating back of house services into the connected stadium giving administrators greater understanding of concession sales and crowd movement.

Another opportunity lies in bringing player biometrics to the spectators, “you might find out if Ronaldo is really as cool as he looks when he takes a penalty” grins Capringo.

While it’s still early days for the connected stadium, like many Internet of Things applications businesses are exploring the limits. For sports fans, they can expect a richer experience being delivered to their smartphones and seats.

How to make the IoT pay

Keeping things simple for the home and selling efficiencies to big business are the way to make money from the IoT

How do companies sell the internet of things to consumers? This was the question at the opening panel of the Internet of Things World conference in San Francisco this morning.

Belkin’s Chief Technology Officer Brian van Harlingen took the lead in the panel stating that the opportunity lies in making sense out of the IoT’s complexity. “With data comes complexity, we have to make it simple for the end user,” said Van Harlingen

Van Harlingen’s view was backed up by Verizon’s Chief Data Scientist, Ashok Srivastava, who understandably sees the challenge of managing the information generated by masses of devices as being an opportunity for his company and data scientists in general.

That masses of data is being generated isn’t surprising seeing the other member of the morning’s panel was Jason Johnson, Co-founder and CEO of  smart lock maker August. That the ordinary door lock may be generating masses of data indicates just how much information might be churning around the average smart home in the near future.

Cut out the complexity

It may well be that all of this data and complexity isn’t necessary as Joe Dada, the CEO and founder of smarthome company Insteon, point out. “Leave the network as quiet as you can,” is his advice. “People over-estimate the amount of data that needs to be pushed across the network.”

Dada, a twenty-five year veteran of the smarthome industry, sees the over-complication of the IoT as being a weakness in many of the products and business models being touted today with his company selling their products on being convenient, safe and fun.

While Dada has a successful business model, many of the other business don’t and exactly how to make money from the IoT wasn’t really answered by the panel.

Capturing efficiencies

It may well be that for many the answer lies in making existing products better, in talking to Cisco’s Brad Bechtold who runs the networking giant’s Oil and Gas Industry Transformation division estimates that there could be operational savings of up to 11% for the sector through implementing IoT technologies.

With estimates of the oil and gas industry’s size being around four trillion dollars a year, that represents an opportunity of over a hundred billion dollars a year in the one sector alone.

Selling the IoT

So it may be that the way to sell the Internet of Things into the industrial sector is to point out the operational savings available. Should the promise of substantial cost reductions be realised then it may even trigger a new wave of capital investment as businesses decide it’s easier to upgrade equipment than retrofit it.

The analytics and management aspect will turn out to be lucrative for many businesses as well, however the key to success is going to be demonstrating how these services add value for customers.

For the consumer market however the key probably lies in Joe Dada’s advice – keep it easy, convenient, safe and fun.