In Cisco & WebEx: Striking Two Hyperdisruption Chords, we said that Cisco – in the wake of its WebEx acquisition – has a disruption-enabled opportunity to expand its business far beyond networking, moving “up the stack” toward business applications and solutions. Last week, at C-Scape, Cisco’s analyst briefing in San Jose, John Chambers and other Cisco executives articulated just such an expansive vision of the company’s future – one they hope will move the company well beyond its traditional role as networking sector leader, to a leader in providing a wide range of business solutions.
Here are five quotes that jumped out at me (compiled in video form below), capturing five key messages within Cisco’s expanding vision:
- Shifting from boxes and transport, to solutions: “We want to move from a box mentality – in individual groups (Service Provider, Enterprise, and Consumer) – to a total architecture across that. Not just for mobility, not just for video, not just for security; but how they will come together.” – John Chambers, Chairman and CEO
- Providing solutions across all of IT, not just communications: “… our goal is clearly not just to lead in one product area or two, but to lead across the industry – we’re talking [about] the whole computer industry, not just communications – and the ability to bring solutions to that.” – John Chambers
- Solutions that include (online) business applications: “Going forward… the WebEx platform will expanded to support not only those collaboration applications – which by and large we will build – but also an increasing variety of business applications, delivered in a seamless experience over the MediaTone network to business customers.” – Don Proctor, SVP, Cisco Software Group
- Building a business applications/solutions ecosystem: “[There are] 50-100 members of the WebEx Connect ecosystem of largely Web 2.0-oriented, next-generation application designers, who are building their applications to be collaboration-enabled from the beginning.” – Don Proctor
- Opportunity to out-do traditional IT players: “Most of the time when you talk to the CIOs… they will tell you …that they haven’t found [Web 2.0] innovation from their traditional vendors. That’s why they look to a Google, or a Yahoo, or somebody like that, for creativity. But those companies do not think architecturally, do not think in terms of the same security approach, et cetera. So we see an opportunity to interface differently to our customers than we’ve ever done before.” – John Chambers
Put together, these messages clearly show Cisco’s aspirations to be not just a provider of communication products, or even of comprehensive communication solutions, but a provider of business solutions. IF Cisco can execute on this strategy – which will be a big, but certainly not impossible, leap – the upside for Cisco is a radically expanded addressable market. The downside is significantly greater friction with major partners – such as IBM, Microsoft, HP, Oracle and SAP – who already see themselves as the leading business solutions providers, and by the way, have significant head-starts over Cisco in the business solutions space.
This is a huge strategic shift for Cisco. My sense is that, as recently as 12 months ago, the company’s management was extremely concerned about the risks of increasing partner friction, and reined in its ambitions accordingly, to accommodate partners’ concerns. After discussions at C-Scape, I get the feeling the scales have tipped in the other direction, with the priority on expanding market opportunity, and a greater willingness to live with strained partner relations. Frankly, given Cisco management’s (and investors’) growth objectives for the next decade, that’s the only decision they could make. Let’s face it: the industry’s leaders have all learned to live with the reality of “coopetition” – and we’ll certainly see more of both competition and cooperation ahead in this era of hyper-disruption. Cisco can’t afford to remain an IT industry “Switzerland” if it wants to maintain its historic growth rates.
In a future post, I’ll give my views on how, and if, Cisco can achieve its vision as a business solutions provider, and handicap the segments in which Cisco has the greatest and the poorest chances to achieve its goal.