- When companies began moving to the cloud four or five years ago, it was seen as a "euphoric neighborhood" where "everything is simple," said Cisco CEO Chuck Robbins, speaking on the Q2 2019 earnings last week. Instead, companies have multiple cloud, collaboration and software as a service providers, IoT at the edge and applications stuck on private data centers.
- Companies have a "more complicated environment than they had five years ago when they began this journey to simplification," said Robbins. And only one technology has remained consistent: the network.
- The added complexity and move away from firewall-reliant security has created an opportunity for Cisco, which has built its business on the network and transitioned toward security. Architecture isn't about a "big, fat, honking firewall" anymore, said Robbins. It's about a network with integrated security from the cloud to email, where threats arise in one domain but are protected throughout a system.
A traditional hardware vendor, Cisco shifted to focus on software and subscriptions, driven by customers' adoption of multicloud portfolios. In the earnings call last week, Robbins touted an accelerated pace of innovation; revenue was up 7% year-over-year reaching $12.4 billion in Q2.
In a market that praises software and service delivery models, Cisco has to prove its modernization and forward-looking demeanor to customers. Acquisitions go a long way in convincing the market of new capabilities. In August, Cisco spent $2.35 billion to buy Duo Security, which expanded its multifactor authentication capabilities.
Vendors often look toward a combination of acquisitions and internal builds to grow an offering. But to be successful, executive leadership requires a vision of where the market is moving toward.
Combining traditional networking technology and security requires a bit of foresight and it's a transition Cisco began during the rise of multicloud technology.
Cisco works closely with business people and operator technologists to understand what is going to be the real technology needs of the future, said Michael Howard, executive director, research and analysis at Carrier Networks, in an interview with CIO Dive. The company has been on top of almost every turn in the industry, ahead of it by three years on average.
Through the network, Cisco evolved to allow customers to get access to cloud facilities wherever they are in the world, according to Howard. Multicloud has become a "fact of life," where customers are using an average of six cloud providers, including Amazon, Google and SaaS vendors like Salesforce.