Internet of Things driving Cisco outside IT team to capture sales
IoT deepens trends driven by consumerisation and BYOD
By Sophie Curtis | Techworld | Published: 12:28, 18 March 2013
The advent of the Internet of Things is forcing traditional IT vendors to rethink their established business models and partner ecosystems, and branch out into new markets, according to Cisco.
Speaking at the Cisco Tech Editor's conference in San Jose, the company's CTO Padmasree Warrior said that IT spending is increasingly being driven by business funding rather than IT funding, due to the consumerisation of IT, cloud computing and analytics.
In particular, the Internet of Things is capturing the attention of business stakeholders, because it is about enabling enterprises to be more efficient.
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IT vendors, which have traditionally only dealt with resellers and CIOs, therefore have to start engaging business leaders. This means building a new ecosystem of partners that are more attuned to the industrial processes within specific vertical markets.
“Our partners don’t sell industrial automation on the floor of a factory; our partners aren't installing electrocardiography equipment in the rooms of hospitals,” said Rob Lloyd, President of Sales and Development at Cisco.
“We’ve generally dealt with an IT route to market, but in the future it’s going to be Rockwell, it’s going to be industrial automation companies, it’s going to be GE and energy management companies that will become the ecosystem of the future.”
Cisco is betting big on this market. The company expects the Internet of Things to create $14.4 trillion (£9.6tr) of value for companies and industries over the next 10 years, representing 21 percent aggregate growth in the profits of all the companies in the world.
But Cisco still has a lot more work to do, forging alliances with companies that have the ear of business leaders in industrial markets such as manufacturing, health, automotive, retail and smart energy distribution.
“GE is not a Cisco partner, they don’t resell our stuff, but they will be instrumental in my opinion in the overall framework of energy management and smart grids,” said Lloyd.
“Because when you talk to a utility they think of the big players that make sense in their environment and, in the case of wind and other energy systems, GE is a key player.”
This does not mean that Cisco's traditional partners will be squeezed out, according to Lloyd. Operators will deliver networks that will be part of the Internet of Things, and existing partners will deploy technology in the same collaborative way that they have built solutions in the past.
“The ecosystem will expand to include more industrial partners, but I don’t think that precludes our partners from participating in that,” said Lloyd.
Cisco sees this as a chance for IT to define a new role for itself within the enterprise, where it becomes responsible for improving asset utilisation, unlocking new forms of productivity, improving supply chain and logistics and changing the customer experience to increase market share.
“As we touch new sources of funding, we actually see an entirely new opportunity for Cisco to reach out to a new set of buying centres, and develop a new set of ecosystem partners in addition to those that served us so well in reaching the IT budgets of the past,” he said.