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Cisco’s Commitment to Smart+Connected Communities: Transforming Cisco from an Internet Plumber into a Solutions Architect

Sunday, May 29th, 2011

This is a summary of the report on “Cisco’s Commitment to Smart+Connected Communities”. For information on how to obtain the entire report, email the author, Tom Kucharvy, at TomK@Beyond-IT-Inc.com

Cisco is on a self-described mission to transform itself from what CEO John Chambers called a networking “plumber” into a trusted architectural adviser and provider of “platforms for innovation”. This requires a fundamental transformation in the company’s value-add, its sales model, the types of services it provides and, perhaps most challenging, in the type of partners the company recruits and in the ways it engages with them.

The company, as discussed in a series of my blogs beginning in May 2010, effectively began this journey by developing a solutions-based approach to promoting its video and other collaboration technologies, virtualization, and borderless networks—all by leveraging its core strength around the network as the underlying platform. It has since extended way beyond horizontal solutions by unveiling initiatives around a growing number of solutions-based “market adjacencies.” These adjacencies, which include healthcare, education, energy, transportation, sports, entertainment and public safety and security, are also being combined into more comprehensive and ambitious efforts such as its Smart+Connected Communities (S+CC) initiative, in which it provides the intelligent, integrated network solutions across multiple adjacencies to help cities drive economic, social and environmental sustainability and efficiently deliver 21st century services.

These efforts will serve as critical proof points of whether the company can indeed extend beyond the maturing and increasingly competitive market for switches and routers to become a globally recognized provider of solutions that improve businesses, societies and Cisco’s own bottom line.

Building the S+CC Value Proposition

Although Cisco has been providing tools for addressing specific, narrowly-defined industry initiatives for the last several years, its effort to pull all of these and other complementary point solutions into a comprehensive network-based, city-wide architectures began in 2008, when real estate developer Gale International selected Cisco as its networking partner in developing the intelligent infrastructure for a totally new city, the Songdo International Business District, which Gale was developing in South Korea.

New Songdo is the most expensive privately financed real estate project in history. It will be a green, LEED-certified community, designed from the ground up to emit one- third of the greenhouse gases of a typical city its size. It will also be one of the world’s first smart cities, with Internet-monitored and controlled traffic, water, power, transportation and public safety. Every wall socket and appliance will be connected to the IP network and every home and office will be able to monitor and orchestrate its own heat, air conditioning, lighting, appliances and energy usage. Each will also have its own Cisco TelePresence videoconferencing system—which Cisco claims will be the “killer portal”—though which all types of urban services (healthcare, education, safety, shopping and so forth) can be accessed.

As ambitious as New Songdo may sound, Gale and Cisco view it only as a starting point. Given the rapid growth in Asian urbanization, the duo plan to use New Songdo as a template from which they will build more than 20 new “instant cities” across Asia. Cisco will also apply the same platform to helping cities of all ages refresh their current infrastructures and enhance and automate the delivery of each individual service (from distance learning and health monitoring through energy management and security services) for which they have a need.

Although Cisco already has many of the infrastructure capabilities required for a platform on which to run and from which to deliver this broad range of services, its history as a box-pusher and plumber has hardly prepared it—much less give it the credibility—to effectively evangelize the vision of a world of vertical services, much less that of the architecture of the city of the future.

It began developing these capabilities gradually beginning with discrete initiatives, as around its Telepresence system and suite of collaboration tools, and then extended these efforts into discrete verticals, such as education and healthcare. As I discussed in a series of blogs in mid-2010 it began this process by:

  • Hiring and training salespeople and consultants steeped in these areas and created a five-stage, services-based process for guiding customers through the entire process, from solution ideation through implementation; and
  • Created a three-stage, service-led solutions incubation process that used its Internet Business Services Group (IBSG) and Advanced Services (AS) organizations to incubate new markets and create lighthouse accounts for promoting its solutions.

It promotes these solutions in its own demonstration centers and highlights them in high-profile venues such as the 2010 Shanghai World Expo. It even created its own virtual, nonprofit S+CC think tank, the Smart+Connected Communities Institute, to spur joint research and knowledge sharing, foster best practices, explore governance models, create training and education programs and eventually, create certification programs around new models of public-private partnership for achieving economic, environmental and social sustainability.

The Platform Ecosystem

But while Cisco recognizes the need to establish itself as a thought leader and to lead the recruitment, design and implementation phases of early accounts, Cisco is, first and foremost, a partner-centric company. Its goal is to package its learnings from initial lighthouse accounts, train and certify partners to use them and then work with these partners to scale new businesses (see my blog on Cisco’s Value-Added Services Partnering strategy for more details).

Cisco’s first step in creating this partner ecosystem was to create an open, standards-based platform. Its City Cloud Platform provides the network infrastructure, complete with a set of underlying horizontal collaboration and Telepresence services and open APIs on which partners can write and deliver their specialized, vertical applications and services. Its initial recruitment efforts are focused primarily on two broad classes of partners:

  • Technology partners, including industry-specific ISVs and system/software providers and providers of complementary horizontal tools such as analytics; and
  • Strategy, market development and consulting partners, primarily SIs with particularly strong positions in specific geographies and market niches.

Given the complexity and large number and range of partners required to design, develop and deliver managed services to cities, Cisco will rely even more heavily on partners for S+CC than it does in its other markets. It will, itself, focus primarily on the communications and collaboration infrastructures required to run these communities. This combined with the fact that Cisco does not plan to build vertical software or create large consulting or managed services businesses, will help it minimize conflicts within these inherently complex S+CC ecosystems.

Cisco is certainly making big investments and incurring big risks in its efforts to jumpstart and establish itself as a thought leader around its broad range of Smart+Connected Communities initiatives. But while its risks are very real, they will, in all likelihood, be relatively small. After all, even if Cisco’s “instant city” vision proves to be a bust, many of its component initiatives, as around telepresence, connected maintenance, energy management, clinical collaboration, distance learning and video surveillance, are already coming to fruition and have the potential of emerging into large, sustainable markets.

Posted in Cisco, Corporate Social Responsibility, Innovation/Entrepeneur, Smart Infrastructure | 1 Response »
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Cisco’s Collaboration Services Incubation Model

Sunday, June 6th, 2010

Cisco is committed to delivering the vast majority of its value-added services through partners. It has traditionally kept its own consulting units very small and used them primarily to support its partners. The company, however, has dramatically expanded its push into dozens of new, increasingly complex and leading-edge markets. It is, for example, currently targeting about 40 “market adjacencies”—new segments that, while complementary to its core networking markets, have the potential of growing into fundamentally new, high-growth markets.

Some of these adjacencies, such as Telepresence and Smart Cities, are relatively new market opportunities. Others, such as virtualized servers and collaboration software, are well established markets that are already occupied by entrenched competitors. The vast majority of these adjacencies, however, share some common needs. Most, for example, require extensive services, including:

  • Evangelism, both around the value of the technologies themselves and also around the value that Cisco—a traditionally self-confessed “box pusher”—can deliver relative to other providers;
  • Consulting services, around everything from identifying and quantifying the business value of the solution, to architecting and integrating it and managing organizational change; and
  • Managed services to implement, operate, manage and pay for these solutions, including delivery of software-as-a-service and utility-based pricing.

But as important as it is to provide these services, Cisco had to manage them within the context of a commitment that it made from the earliest days of the company—to establish deep partnerships with, create markets for and avoid competing with its channel partners. As I discussed in a 2008 report, “Cisco Services 3.0—Transforming Product Support into a Competitive Differentiator”, the company anticipated these expanded services needs and proactively developed a strategy for addressing them. Its strategy for building and delivering services around its Collaboration offerings provide an example of this strategy in action.

Incubating New Service Offerings

As I discussed in my May 31 blog, Cisco has developed a comprehensive line of services to support its collaboration offerings—services that range from business case development though architecture design, governance and change management. Such services, however, do not spring fully formed from John Chambers’ brain. They are often:

  • Conceived, tested and tuned within the Cisco organization, where it is often the first to use its own products;
  • Incubated, catalogued and formalized by the company’s own consulting organizations; and then
  • Rolled out through, and gradually scaled across partners

Let’s begin with a brief overview of the role that two of Cisco’s in-house consulting organizations—Internet Business Services Group (IBSG) and Advanced Services (AS) play in incubating, maturing and programitizing Cisco’s services in general, and its collaboration services in particular. Then I’ll examine how Cisco’s channels organization rolls these services out through its partner channel.

Cisco has continually pioneered the use of networks in transforming organizations and redefining business models, typically beginning these experiments within its own company. A decade ago, corporate customers asked how they could use the Internet to transform their own organizations. Five years ago, they asked how to use Internet-based collaboration tools to transform their business processes. Cisco responded by redefining the company into a living case study as to how to use the Internet as the foundational infrastructure for transforming the company’s organizational and management models, creating a flat, globally distributed, agile organization that distributes decision making down to virtual teams that span the globe. (See my characterization of this transformation and its results in my January 24 and January 31 blogs.)

These in-house implementations provide invaluable learning experiences, proof points and the foundations for the methods that Cisco uses in promoting and implementing its technologies and architectures in thousands of customer organizations worldwide. The process begins with the company’s Internet Business Solutions Group (IBSG), which helps drive these in-house implementations and then applies Cisco’s learnings to a handful of Cisco’s largest, most strategic customers. This group, which consists of only about 200 thought-leader consultants, works with customers’ C-level executives to:

  • Identify promising opportunities for business and business process innovation within the customer’s specific industry and organization;
  • Create technology roadmaps that will enable business transformation; and
  • Develop business cases required to achieve buy-in from business and technology groups.

These consultants certainly provide great value to customers by identifying and creating technology roadmaps for achieving strategic advantage. They provide even greater value to Cisco, as by identifying and leading development of innovative network-based processes that have the potential of opening new markets, by creating the foundations for the business cases and process methodologies that Cisco will leverage across multiple customers and by creating long-term strategic relationships with some of the company’s most important customers. This group, however, is not intended to be a profit center (Cisco does not even bill for its service) and is not intended to scale to the needs of multiple customers (it is not likely to grow to more than a few hundred consultants). Its ultimate value is in creating new business opportunities and incubating new services that will be mined by the entire Cisco organization.

Bringing New Services to Market

The company’s Advanced Services (AS) team is the next link in Cisco’s commercialization chain. This organization is responsible for applying the learnings, business cases and methods that were developed in Cisco’s in-house and IBGS-led lighthouse implementations, out to broader range of “pre-chasm” customers. This group, which consists of about 3,000 consultants, has four primary responsibilities:

  1. Help large enterprise and service provider customers develop business cases and ROI justifications for—and especially architect, implement, integrate and develop governance and change management models for—pre-chasm solutions;
  2. Test, fill out, codify and bulletproof methods and best practice models for all of the processes involved in the previous bullet; and, once the solutions, methods and best practice models methods are ready for broad-market implementation;
  3. Transfer these models to, and continually update them for, Cisco’s Technical Services team (which catalogs all learnings into Cisco Methods and Customer Intelligence Platform support database) and Cisco’s partner organization; and
  4. Support channel partners’ efforts to sell, architect and manage implementations of these technologies into broader markets (see next week’s blog).

Although the 3,000 consultant AS team is tiny by the standards of IBM, HP and Accenture, it is not intended to perform the same role as these companies’ organizations. AS, unlike its IBSG sibling, is a profit center. But unlike most other vendor consulting organizations, it is not intended to develop ongoing practices around, or generate long-term revenue streams from specific technologies. It is intended to facilitate and ensure the successful implementation and adoption of new Cisco solutions within a relative handful—about 500 in total—large, “transformational” customers and to prepare these solutions for high-volume sales through Cisco’s channels. Once these jobs are completed, the AS staff dedicated to these solutions is reduced and consultants migrate to new technologies.

Given AS’s hybrid role as solution evangelist and system integrator, consultants must have deep knowledge of both the technologies and of the business objectives and business processes needs of their clients. The vast majority of these 3,000 consultants have deep skills in one or more of Cisco’s pre-chasm technologies, such as those related to collaboration, virtualized data centers and borderless networks. About half have deep understanding of the needs of specific industries in which their technologies are particularly applicable (such as healthcare, financial services and education for its communications technologies) and about half are field-based, working with specific customers on long-term projects. (Most of the others shift among individual project-based engagements with many customers.)

The value that such consultants can provide to customers is well understood. But, to truly understand the value these consulting teams provide to Cisco, one must also understand the value they provide to Cisco’s channel partners.

Posted in 21st Century Careers, Cisco, Creating the 21st Century Workforce, IT Company Strategies, IT Industry and Companies, IT Industry Trends, IT/Business Consulting/Outsourcing, Skills Requirements, STEM Careers | No Responses »
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