The theory of everything

Cisco is banking on the internet of everything to take the seat the world's number-one IT firm. Sam Trendall went to its recent partner conference to find out more

At last year's Cisco Worldwide Partner Summit in San Diego, the vendor brought out the knives as chief executive John Chambers talked up his firm's chances of vanquishing its rivals. This year, in Boston, may have marked the start of the networking giant going in for the kill, as its CEO outlined his intent to establish Cisco as the world's leading IT company as "brutal consolidation" eliminates the majority of the market incumbents in the next few years.

In a bullish opening keynote Chambers claimed that the history of the IT industry is littered with companies who claimed they would best Cisco in a particular area and failed to make good on that pledge.

"Far too often a competitor makes a statement and the market accepts it; but we have never lost a major battle in one of our core competencies," he said. "Of our competitors from 15 to 20 years ago, none of them are here today. From 10 years only Juniper still exists, and we are going to get them.

"From those of five years ago, companies like Alcatel-Lucent and Ericsson are a shadow of what they used to be. A few years ago we were all worried about HP, Huawei and Avaya but we have left them behind as well."

Musical chairs
And the face of the major vendor landscape will begin to change even more quickly, with a period of "brutal consolidation" predicted by the Cisco leader. Key to his firm's success will be its becoming not just the world's leading communications manufacturer, but the foremost IT firm full stop.

"Out of the top five IT companies [currently] on Gartner's list, three will not be there in five years," he explained. "This is an industry that will consolidate - it will be musical chairs."

Simon Payne, managing director of Gold partner Damovo, shares Chambers' confidence that the networking giant will emerge on top.

"Cisco has got the end-to-end architecture play," he added. "Moving forward I believe the big player in the market will be Cisco and one other, which could be a Google or a Microsoft."

Paul Sweeney, managing director of ANS Group, added: "Big data is where everything is going, and it is not so much about storing data, but analysing it in flow. Cisco are in the box seat for that because they are the network."

Key to Cisco's plan to become the IT industry's top dog is its vision of the internet of everything, a future in which more-or-less the entire physical world can become a connected device. The demo during Chambers' speech involved a cola manufacturer using the network to track every stage of production and sales, right from growing the corn, through harvesting and processing, through to bottling, distribution and retail.

The internet of everything represents a $14.4tn (£9.3tn) sales opportunity over the next decade, Chambers (pictured) believes.

The demonstration of just what Cisco's technology is capable of and how it can be used to bring connectivity to seemingly almost any object or creature may have been very impressive, and not a little utopian. But it seems doubtful that VARs will be rushing out to sell connected corn, rather than switches, servers and services.

But Sweeney insisted that even these more fanciful ideas point to opportunities for the channel.

"That technology, far-fetched as it may seem, will need to live somewhere, and that data will need to be supported, which will mean more network, more storage and more compute," he said.

Get smart
Behind all the high-end strategising did lie some more pragmatic short- and mid-term opportunities, with cloud and services a key focus, particularly the Hosted Collaboration Solution and so-called smart services, more geared to analytics and proactive monitoring, rather than reactive break-fix maintenance.

Damovo's Payne said: "They are going to have a massive push around the HCS platform. For us that works really well. We sold our first HCS opportunity [recently] and we want to be seen as the most skilled HCS partner. The other big take-away was what they are going to be developing around business analytics."

Touchbase has been an early adopter of some of Cisco's monitoring and support services. Managing director Mike Danson said: "Cisco has this intellectual property and data which we can take and put on run a programme on a customers' network that tells us exactly what they have on their estate and proactively alert them to changes."

Previous Cisco summits have been characterised by an avalanche of new initiatives, badges and programmes. A handful of schemes and certifications were unveiled this year, but the event was notable for its broader, more strategic tone.

Logicalis Cisco business unit director Toby Gold said his firm was "very happy with that".

"If you think about how Cisco was 10 years ago, it only had a couple of products. With all the new areas they have entered, they needed to have a period of consolidation and that was very programmatic," he explained. "From a programme perspective it is now to our advantage to have consistency."

Services

Cisco unveiled a "grand vision" in Boston for what it sees as the future of services for partners, with senior execs admitting that the high-end strategy had left some partners uncertain where they will fit into this brave new world.

In a keynote speech, senior vice president of Cisco Services Edzard Overbeek outlined revealed that 50,000 partners are enrolled in the vendor's services partner scheme. Some $6bn (£3.8bn) in sales is generated through the programme annually, he claimed, with $200m handed out in channel rebates.

He told attendees that he saw the future of services hinging on three areas: consulting services; platform services; and industry services. The first of these will cover general business and technology consulting, while platform services will address areas such as compliance and configuration.

Industry services, encompassing services created for specific vertical markets such as retail, finance or manufacturing, will be the most important of the trio, predicted Overbeek.

Paula Dowdy, head of Cisco Services for the EMEAR region, told CRN that she had "gotten mixed feedback" on the vendor's ambitious plans, but confessed that she fears for the future of partners that do not want to extend their engagement in the services space.

"Some partners said ‘wow - what a vision, but show me how to get there'. While others said ‘you're going to need to add different types of partners [for these services]'," she explained. "But I worry about the partners that just want to do a little break-fix."

Product

For all the talk of cloud computing and high-end services, the message from Cisco's sales and technical leaders was "we still love hardware".

Chief technology and strategy office Padmasree Warrior told partners that software-defined networking is not the be-all and end-all. Cisco's focus is on programmable networking encompassing processors, hardware, software and services.

"A large part of the platform is going to be open source, [so] we need to have a strong ISV programme," she added. "There is a lot of hype [around SDN] and it is our responsibility to explain it to customers. SDN addresses only a portion of their requirements."

This view was echoed by sales and engineering head Rob Lloyd, who claimed that he has "been hearing a lot about the commoditisation [of hardware] for all of the 19 years I have been at Cisco".

"When you take ASICS and integrate software, hardware and services, you create better performance, better scale and more simplicity. The idea that SDN is going to commoditise networking and kneecap Cisco and everything we do is just not true."

As if to demonstrate Cisco's continued dedication to tin, Lloyd announced on stage a new iteration of Cisco's Catalyst 2960 switch, dubbed the 2960X. The product will launch into the channel in the next month, he claimed, and will offer double the performance at the same price of its predecessor.

Programmes and certifications

Compared with previous partner summits, this year's get-together may have been a little light on new programmes and badges, but there will still a few new schemes and certifications unveiled in Boston.

Chief among them was the Cloud Services Reseller Programme, which has been spun out of the existing Cloud Partner Programme. Partners were told there are now "no excuses" for them not to be in the cloud game. Sales through the new scheme will qualify for the long-standing VIP rebate programme and a go-to-market resource centre will be set up to help generate demand.

Channel chief Edison Peres said: "The time has come for all of to resell cloud and not just embrace it, but drive it and make it strategic [for your business]."

Also unveiled in Massachusetts were a trio of new certifications for individual partner staff. Sales heads can now attain Certified Business Value Specialist or Business Value Professional status, while techies can become Transformative Architecture Specialists. The new badges - which will, in time, become of partners' specialisation requirements - are designed to be geared towards services and solutions, rather than product-geared checklists.

Cisco is also upping its game in the mid-market and pledged to double its investment in the space during FY14 from $75m to $150m.

"In some segments we have 40 per cent-plus market share; here we are in the 20s. There are 1.4 million customers out there," said Bruce Klein, head of Cisco's Worldwide Partner Organisation.

The network giant also pledged to invest heavily to tighten up a channel sales bookings programme that can leave distributors having to wait unnecessarily to fulfil orders. The Channel Bookings Neutrality (CBN) scheme has been in place for four years to ensure Cisco sales reps are equally incentivised for booking deals through both distributors and directly served partners.

But distributors cannot book deals to be fulfilled from their own inventory, but rather must place a new shipment order and wait for delivery. Klein pledge to eradicate the need for CBN within 18 months by tooling up back-office systems and processes.