{"id":18702,"date":"2016-11-18T15:31:30","date_gmt":"2016-11-18T20:31:30","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/cisco-and-the-internet-of-things\/"},"modified":"2016-11-18T15:31:30","modified_gmt":"2016-11-18T20:31:30","slug":"cisco-and-the-internet-of-things","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/cisco-and-the-internet-of-things\/","title":{"rendered":"Cisco and the Internet of Things"},"content":{"rendered":"

\"logo-open-graph\"<\/a>Founded in 1984, Cisco Systems is a networking company that has traditionally focused on manufacturing network hardware such as routers and switches. Cisco went public in 1990, and began aggressively acquiring companies in the network services hardware and software industries, completing well over 40 acquisitions from 1990-2000 [1]. Reaching a peak market capitalization of $580 billion at the high of the dot-com bubble in 2000, Cisco became the largest company in the world for a time [2].<\/span><\/p>\n

The new millennium has been tough for Cisco, their market cap falling to around $150 billion in 2016 [3]. They have felt increased pressures from competitors, losing 30% of the router market (once its core business) to Juniper Networks [4]. They also tried and failed to enter the consumer end of the network devices market, first launching \u201cThe Human Network\u201d campaign aimed at making Cisco a household name in 2006 [5], and then selling their consumer router subsidiary Linksys in 2012 [6].<\/span><\/p>\n

\"In
Cisco CEO, Chuck Robbins<\/figcaption><\/figure>\n

In 2015, Chuck Robbins became CEO of Cisco and began restructuring the company once more. As he put it, \u201cYou have follow your convictions. You need to build a leadership team that you trust and that together are actually better based on their diversity and different thinking they bring to the game. [7]\u201d Robbins has since worked to build enterprise cloud-based data analytics services, for example spotting errors in GM\u2019s manufacturing robots before they become a problem [8]. As he explains, \u201cThe connectivity of that robot means absolutely nothing until you build the analytics capability [8].\u201d<\/span><\/p>\n

Robbins has led 15 acquisitions in the year since he took charge, investing heavily in the cloud and the Internet of Things. They have approached this from the industrial side instead of the consumer side, purchasing Jasper, an enterprise IoT company, for $1.4 billion this past February [9]. They have since then started using Jasper to move into emerging IoT markets, such as India, for example, where Cisco Jasper has launched UNLIMIT in partnership with Indian company the Reliance Group to help businesses leverage the Internet of Things [10].<\/span><\/p>\n

These major shifts inside the company have resulted in thousands of layoffs from their hardware divisions and reduced earnings [11]. Cisco\u2019s smaller ventures have shown growth, but the transition has not been smooth.<\/span><\/p>\n

The future for Cisco depends on this transition from a network hardware company to an IoT services company. Cisco needs to bet big on the Internet of Things, and I think Robbins would agree. As he put it, \u201cI do believe that this is bigger than the first wave of the internet. [12]\u201d A recent Gartner Report predicts that in 2020 there will be 20.8 billion internet connected devices in the world [13], and Cisco predicts even more (50 billion [12]). There is a tremendous opportunity here, and the only question remaining is who will capture it.<\/span><\/p>\n

I believe that Cisco should move into the consumer end of the IoT industry sooner rather than later, despite having failed once before. This time around, Cisco should not focus on becoming a household name. Instead they need to approach the consumer indirectly. They are already members of several consortiums that are trying to design \u201cthe language of the internet of things [14]\u201d. Robbins says that the world is \u201cmoving too fast for anyone of us to do it all alone, [8]\u201d but Cisco needs to lead that charge. Working with consumer product companies such as Nest, If This Than That, etc. Cisco should promise to connect everything in our lives. One or two companies will eventually be the backbone of all smart device communication and if Cisco is going to survive it needs to be one of them.<\/span><\/p>\n

(615 words)<\/p>\n

    \n
  1. http:\/\/www.fundinguniverse.com\/company-histories\/cisco-systems-inc-history\/<\/span><\/a><\/li>\n
  2. http:\/\/www.marketwatch.com\/story\/cisco-pushes-past-microsoft-in-market-value<\/span><\/a><\/li>\n
  3. https:\/\/finance.yahoo.com\/quote\/csco?ltr=1<\/span><\/a><\/li>\n
  4. http:\/\/www.networkworld.com\/article\/2210939\/lan-wan\/cisco-vs-juniper.html<\/span><\/a><\/li>\n
  5. http:\/\/www.cisco.com\/c\/dam\/en_us\/about\/ac49\/ac20\/downloads\/annualreport\/ar2006\/pdf\/ar_2006_complete.pdf<\/span><\/a><\/li>\n
  6. https:\/\/www.bloomberg.com\/news\/articles\/2013-01-24\/cisco-sells-linksys-home-router-unit-to-belkin<\/span><\/a><\/li>\n
  7. http:\/\/fortune.com\/video\/2016\/06\/28\/cisco-ceo-leadership-style\/<\/span><\/a><\/li>\n
  8. http:\/\/fortune.com\/2016\/07\/13\/cisco-chuck-robbins-busy-year\/<\/span><\/a><\/li>\n
  9. http:\/\/www.cnbc.com\/2016\/02\/03\/cisco-wagers-14-billion-on-internet-of-things.html<\/span><\/a><\/li>\n
  10. http:\/\/economictimes.indiatimes.com\/tech\/internet\/reliance-group-cisco-jasper-partner-for-technology-venture\/articleshow\/55433096.cms<\/span><\/a><\/li>\n
  11. http:\/\/www.wsj.com\/articles\/cisco-shows-signs-of-pressure-1479331039<\/span><\/a><\/li>\n
  12. http:\/\/fortune.com\/2015\/10\/05\/cisco-chuck-robbins-internet\/<\/span><\/a><\/li>\n
  13. http:\/\/www.gartner.com\/newsroom\/id\/3165317<\/span><\/a><\/li>\n
  14. http:\/\/www.economist.com\/news\/technology-quarterly\/21615067-more-and-more-devices-are-becoming-connected-will-they-speak-same<\/span><\/a><\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"

    Cisco is in the middle of a large pivot from a network hardware company to a SaaS IoT company.<\/p>\n","protected":false},"author":2293,"featured_media":18703,"comment_status":"open","ping_status":"closed","template":"","categories":[2409,2633,2019,1503,2632],"class_list":["post-18702","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-cisco","category-cisco-jasper","category-internet-of-things","category-iot","category-jasper"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/digitization-challenge-2016\/","yoast_head":"\nCisco and the Internet of Things - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/cisco-and-the-internet-of-things\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Cisco and the Internet of Things - 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