When you're a hammer, everything looks like a nail. When you're a networking company, like Cisco, everything looks like it should be connected.

Thomas Claburn, Editor at Large, Enterprise Mobility

October 6, 2015

3 Min Read
<p style="text-align:left">(Image: Cisco)</p>

IoT World: Separating Smart And Dumb Things

IoT World: Separating Smart And Dumb Things

IoT World: Separating Smart And Dumb Things (Click image for larger view and slideshow.)

Consider the computer security problems of today and then imagine 30 times as many vulnerabilities. That's the promise of the Internet of Things, a world where everything is programmable and potentially flawed.

On Monday, Oct. 5, at Cisco's Global Editors Conference, CEO Chuck Robbins said there may be 500 billion connected devices or more by 2030, up from 15 billion today.

"It will fundamentally tear apart the whole paradigm of computing," said Robbins.

Technology companies adding software to the things that surround us is a bit like the fire department dousing everything with gasoline -- it's a guarantee of continued employment. Getting our things to function together reliably and securely is an ongoing challenge for the technology industry. It also presents a significant growth opportunity.

Security, said Robbins, is the number one concern of Cisco's customers. That statement offers some context to the company's recent acquisition of Portcullis Computer Security. But that's only part of the picture. Cisco is focused on data analysis and management too, because collecting data from the Internet of Things doesn't matter unless the data can be turned into actionable information.

According to Robbins, CIOs say they're spending about 75% of their time dealing with systems integration and operational work. They'd prefer to be spending that time figuring out how technology can drive strategic value for their companies.

In a reversal of historical trends, customers are now focused more on operational expenditures than on capital expenditures, said Robbins. Some 70% of the cost of IT systems today involves ongoing operational expenditures, he said.

IT, once a purchased product, is more and more a rented service. For a networking hardware vendor, that's not good news, but Cisco is trying to adapt. It's becoming more of a diversified IT provider. Though the company generates about three times as much revenue from hardware sales than software and services, its subscription revenue has been rising.

Toward that end, Cisco announced an expansion of its digital manufacturing portfolio called Connected Machines, which allows the company's partners to run factory machines as a service. It also announced a unified multi-service network for mass transit providers called Connected Mass Transit as part of its digital transportation portfolio, and a Substation Security offering as part of its digital utilities line. It also introduced a service called Connected Pipelines, for the oil and gas industry.

[Read about how much the IoT market is worth.]

In addition, Cisco discussed partnerships with Schneider Electric, electronics maker Flex, and robotic automation company FANUC, which introduced a service called Zero Downtime to keep automated systems up and running. Cisco also announced its ISA-3000 Industrial Security Appliance.

Robbins suggested the market wants simplicity. Companies, he said, are "coming to the conclusion that having 40 to 50 individual security vendors is no longer an option." Companies want a holistic solution, one that allows them to spend less time integrating IT systems.

The trick is to be the one company providing that single solution.

Cisco's strategy of pursuing partnerships with the likes of Apple, GE, and IBM suggests no one company can fill that role. The proliferation of connected things will only make it more important for companies to work together to make ubiquitous connectivity work. For Cisco and its peers collaboration isn't just a product line, it's also a business necessity.

About the Author(s)

Thomas Claburn

Editor at Large, Enterprise Mobility

Thomas Claburn has been writing about business and technology since 1996, for publications such as New Architect, PC Computing, InformationWeek, Salon, Wired, and Ziff Davis Smart Business. Before that, he worked in film and television, having earned a not particularly useful master's degree in film production. He wrote the original treatment for 3DO's Killing Time, a short story that appeared in On Spec, and the screenplay for an independent film called The Hanged Man, which he would later direct. He's the author of a science fiction novel, Reflecting Fires, and a sadly neglected blog, Lot 49. His iPhone game, Blocfall, is available through the iTunes App Store. His wife is a talented jazz singer; he does not sing, which is for the best.

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