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In 2023, communications suites and platforms will come into focus as enterprises look to rethink their hybrid work strategies.

1. Suites dominate buying patterns and could disrupt Microsoft
Through the pandemic, businesses scrambled to adopt tools for remote workers. It’s common to find businesses with one vendor for messaging, another for calling, a third for video, and so on. In almost every conversation I’ve had with IT leaders, they want to move to a suite versus best-of-breed model. This shouldn’t be a surprise, as suites have won over time in other markets (office productivity, CRM, etc.). This puts Microsoft Teams in an interesting Schrödinger’s cat position, where it is advantaged and disadvantaged. Its strength is tied to its greater Microsoft products, so it will get a look from almost all companies. However, as companies explore Microsoft's suite, they might realize that none of their communications capabilities are best of breed. From my experience, Cisco and Zoom have better video, RingCentral and 8x8 have better voice, and Slack is a superior messaging tool. On top of that, Microsoft really doesn’t have a contact center service (though it has the Digital Contact Center Platform). It will be interesting to see how resilient Microsoft’s good-enough approach is and whether it can be the one app to rule them all.2. The rise of platforms
The term platform is one of the most overused in communications. Every unified communications (UC) and contact center vendor tells me they are a platform and use their breadth of capabilities to support the statement. So which ones are platforms? In my opinion, none of them are right now, although most are headed in the right direction. A platform isn’t a bundle of products; that’s a suite (see above). A platform is a set of capabilities for others to create economic value on. Apple’s iOS, Windows, Salesforce, and Oracle are all platforms, and it can be seen by the massive ecosystems that surround them. Much of the platform talk from UC and contact center vendors has been marketing speak more than anything. Behind the scenes though, most of them have been building APIs, SDKs, and low-code/no-code tools to fuel their march towards building an ecosystem. 2023 won’t be the year that we see much in the way of public announcements, but it will be the year vendors are intensely focused on attracting developers, ISVs, systems integrators, and others to create bespoke experiences. The measure of success will ultimately be the size of the ecosystem, but we won’t know the winners for several years, although we should see some leading indicators this year. As I noted above, suites will win short-term battles, but make no mistake, platforms will win the war.3. More use of AI across the meeting lifecycle
The use of AI in communications is common today. Almost all vendors have background noise removal, virtual backgrounds, video touch-ups, transcriptions, and other features that make the in-meeting experience better. But a meeting is more than turning on my video and talking to people on the other end. Meetings have a lifecycle, and we do things before, during, and after them. This includes sending meeting minutes, reviewing past content, summarizing to-dos, and following up on action items. These are typically things most of us do poorly. Oh sure, we all know someone who’s on top of this stuff and has a clean inbox, but these people are few and far between. Here is where AI can add tremendous value. For example, meeting minutes can summarize a meeting versus having to look through a transcript. Another useful feature would be to parse the meeting for action items and automatically assign them to people. A good way to think about it is that many executives have a personal assistant that continually preps them and whispers in their ear, but most workers do not. AI can give this capability to all of us, and you should expect more in this area in 2023.4. Contact centers pivot back to people
Over the past several years, many businesses have been pushing intensely to bring chat and virtual agents into contact centers. This has some obvious cost benefits, and in theory, can improve the customer experience, as people get answers faster. The reality is virtual agents and chatbots are great but can’t be used for everything. Complex interactions or ones that elicit emotions, such as talking about health and money, require real people that show empathy. When virtual channels are used here, it can have disastrous results. In 2023, expect to see brands swing the pendulum back to AI-assisted agents, instead of trying to replace them. We will still see a net reduction in agents, but customers will still need (and want) to talk to a human agent.
Cisco VP Denise Lee discusses how the company has built sustainability into all aspects of its operations.

- Cisco has set a goal to reach net-zero carbon emissions by 2040, which would include scope metrics 1, 2, and 3. Companies use scope 1 and 2 metrics to measure emissions that they own or control, whereas scope 3 emissions are a result of a company’s activities but come from outside sources.
- In July 2022, Cisco’s 2040 net zero goal was approved by the Science Based Targets initiative (SBTi) under its Net-Zero Standard. SBTi defines best practices for corporate net zero target setting based on climate science. In order to earn SBTi validation, companies must reduce their emissions by at least 90%. Cisco is among the first hardware and equipment companies to be validated under the SBTi standard.
- In the near term, Cisco has set two other sustainability goals. The first one is 90 percent reduction in scope 1 and 2 global emissions by 2025. The second one is 30 percent reduction in scope 3 emissions from purchased goods and services, upstream transportation and distribution, and use of sold products by 2030. Additionally, by 2025, Cisco wants to incorporate circular design into all its products and packaging.
- Europe, Middle East, and Africa (EMEA) are farther ahead when it comes to sustainability practices and their understanding of scopes 1,2, and 3. In EMEA, sustainability-related policies and regulations have already taken effect, such as banning certain materials from being used in products. Cisco plans to do the same across the entire supply chain, so it’s not a bespoke model for every global region.
- Data plays a key role in sustainability. When companies understand the science and the data behind the products, they can adjust their thinking and practices. Within every organization, IT deals with droves of data. Organizations can bring IT into the sustainability conversation and make IT part of the solution, while also creating designated sustainability roles/offices. It’s about getting a diverse set of people together across the company to solve this problem.
- Earlier this year, Cisco launched an Environmental Sustainability Specialization, which includes everything from training to incentives for returning used equipment to Cisco. The program recognizes partners for their commitment to sustainability, specifically the circular economy.
- There are three actions companies can take today to become sustainable in the future. First, get started no matter where you are in your journey. Second, have a baseline understanding of where you are right now and what needs to be prioritized. Third, think long-term and embed sustainability into the business.



New ZTCA certification helps businesses close the widening security skills gap.

- Zero trust fundamentally changes how users access the network. The concept is very different from legacy networking architectures like firewalls and VPNs. The essence of zero trust is to hide the attack surface by eliminating public internet protocol (IP) addresses, so they’re not discoverable.
- In the business context, zero trust is about connecting the right user to the right application based on policies that an organization has defined. For example, someone connected to a VPN can move laterally on the network and get access to information. With zero trust, however, a user’s identity must be validated before they’re allowed to get on the network.
- There are several factors driving zero trust today, specifically the shift to hybrid work. People are working remotely from anywhere, which makes the enterprise network more vulnerable to security breaches. Companies pay a high price for breaches, both literally and figuratively—whether it’s ransomware that involves monetary extortion or an attack that damages the company’s reputation and brand.
- Since zero trust is a new way of thinking about security, there’s a heightened demand for training programs. To address this need, Zscaler created the ZTCA program, giving security professionals the practical tools they need to implement zero trust in their environments. ZTCA starts with universities and other educational institutions in training “a workforce of tomorrow.” But it’s also valuable to those who already have a career in security and are looking to gain new skills.
- The program is the first of many and has been well received in the industry. Zscaler designed ZTCA to be more agnostic than its usual product trainings. While it provides guidance on implementing zero trust with Zscaler, the key focus is on the core tenets of zero trust.
- ZTCA was modeled after classic certification programs like Certified Information Systems Security Professional (CISSP) and Cisco’s CCNA/CCIE. ZTCA participants can receive credits while learning at their own pace. After completing the course, participants become certified zero trust experts and receive a LinkedIn certificate and badge.

The application of artificial intelligence to a converged communications platform enables better customer service and employee collaboration.

Dialpad Builds AI In-House for Faster Innovation
Most of the cloud communications companies partner to deliver AI capabilities but Dialpad has bucked this trend and builds all its own AI models in-house. Since acquiring TalkIQ in 2018, Dialpad has been creating advanced capabilities that combine communications with real-time speech recognition and natural language processing (NLP). Its AI-powered Customer Intelligence Platform builds on the more than three billion minutes of real-time data collected to date by analyzing conversations, automating workflows, and providing predictive insights. The launch comes at a time when the market is evolving from point communications solutions to unified employee and customer experiences, according to John Finch, Dialpad’s Sr. VP of Solutions Marketing. Many organizations still struggle to make sense of how to connect workers and collaborate using different tools. This is Dialpad’s way of addressing the need for an AI-driven workplace by tapping into AI’s full potential.UCaaS and CCaaS Combined with AI Streamlines Workflows
“We’re making a brand narrative shift. Rather than being a TrueCaaS company or an AI company or a UCaaS company or multiple facets of that, we want to deliver an AI-powered customer intelligence platform,” said Finch. “It is the overarching element that encompasses all the products (contact center, unified communications, voice/video meetings, messaging, and more) across our existing TrueCaas platform.” The coming together of customer and employee facing workflows combined with AI enables businesses to streamline workflows. For example, it’s common to have marketing reach out to customers with promotions or special incentives. If the customer calls into the contact center for an issue and inquires about the promotion, the agent is often left hanging as the agent systems have no knowledge of marketing activities. I recently experienced this myself with one of the airlines I fly. I was making a flight change and asked about an e-mail promo I received, and the agent had not heard of it. By combing the systems and applying AI, the agent would not only have been able to talk knowledgeably about it, but the AI could offer recommendations on a flight or vacation I might be interested in from my history. Many companies are looking to shift the contact center from being a cost center into a profit center but the agents can’t be the integration point for the data. AI-powered Customer Intelligence Platform combines several Dialpad products in one place: Ai Contact Center, Ai Sales, Ai Voice, Ai Meetings, and Ai Messaging. As the name implies, Ai Contact Center is designed for contact center agents and it provides omnichannel support for voice and digital. Ai Sales drives revenue and sales productivity through coaching and sentiment analysis. Ai Voice is an AI-based phone system that integrates with Google, Microsoft, Salesforce, and others. Ai Meetings enables secure collaboration from anywhere. AI Messaging offers chat and unlimited text messaging capabilities. “Having this unified toolkit for an AI-powered workplace is important. For us, every call matters, every interaction matters,” said Finch.AI Provides Better Automation and Information Flow
The new platform enables three key elements of “AI at work,” Finch added. First, there’s Ai Automation or providing information to different users within an organization, so they can do their jobs better. Second is Ai Assist, which involves helping contact center agents provide better customer service through suggested responses, real-time coaching, and automated compliance. Third, Ai insights is about understanding interactions (customer satisfaction scores or CSAT), optimization, revenue predictions, and engagement. Earlier this year, Dialpad launched a real-time predictive engine for customer satisfaction dubbed Ai CSAT, which analyzes every customer call to collect feedback. Rather than having customers fill out post-call surveys, it uses AI to obtain CSAT metrics from voice conversations. More recently, Dialpad rolled out a conversational search engine called Ai Agent Assist, which handles complex customer inquiries. Both are examples of how Dialpad is enabling capabilities that are uniquely AI-based. Dialpad has a few other things in the pipeline. It’s working on a net promoter score (NPS), an important customer experience metric that businesses use to understand the likelihood of a customer recommending their service or product to others. Dialpad is also encouraging organizations to use its low-code capabilities to develop on the platform. While it already has an out-of-the-box integration with Salesforce, other native integrations are coming soon, including HubSpot. The business landscape is now highly competitive, and customers have little patience for brands that can’t offer the highest level of customer service. Companies have relied heavily on manual integration of data, but things change too fast for this to be possible. Bringing together customer and employee communication tools is a good start but AI is now needed to find those key insights that enable constant innovation.

The 11th annual Amazon Web Services re:Invent is now in the books. This was the first fully attended re:Invent since the pandemic — 2021 had a capped audience — and I was curious to see how well-attended the event would be. The “about re:Invent” post, written prior to the start of the show, claimed “over 50,000,” but I heard that it may have been as high as 70,000, which is at pre-pandemic levels.
This is an interesting contrast to CES 2022 that kicked off the year, which drew about 45,000, way down from the close to 200,000 it typically gets. To me, the massive draw for re:Invent indicates that live events are back and people have a thirst to not just to connect with their peers but to engage actively, and that was great to see. This bodes well for industry and vendor events heading into 2023.
As is always the case, re:Invent was filled with more product news than one could digest. Instead of trying to pick and choose the most meaningful announcements, I thought it would be good to highlight my top takeaways from the event.
AWS is becoming a SaaS company
Long known as the leader in infrastructure as a service, AWS has quietly been rolling out software-as-a-service applications. A couple of years ago it launched Amazon Connect to move into contact centers. When initially released, it was a bare-bones product that had telephony, basic interactive voice response and not much more. Since then, AWS has added all the digital channels and has added a bevy of AI features. At re:Invent, AWS announced a number of updates to Connect, such as an artificial intelligence-based agent training tool called Workspace, machine learning based forecasting and a no-code interface for IVR.The company also announced AWS Supply Chain is now in preview mode. As the name suggests, the product is designed to help businesses increase supply chain visibility to make faster, better-informed decisions that can save money, reduce risk and improve customer experience.
What’s interesting about these announcements is that Connect and Supply Chain are both homegrown apps that Amazon uses to run its own business. The company chose to build them because it felt it gave it a competitive advantage over prebuilt tools, and now it’s taking those capabilities and making them customer-facing.
I believe this process of taking internal apps and launching them as SaaS services will become standard practice for AWS. Future apps could include procurement, HR, expense management or anywhere else AWS feels it has an advantage.
AWS is creating better integrations across its products
When one thinks of AWS, it’s easy to think of a company that makes Lego-type building blocks. Developers take them, assemble the components and build something. Although that process works for many, it isn’t ideal for all organizations because there can be a lot of heavy lifting and skills required to tie the building blocks together. AWS is now pre-integrating the products to make deployment simpler. As an example, it announced the integration of its relational database, Aurora, and Redshift for cloud data warehousing. Rarely do customers buy one without the other, so tightly coupling them makes sense. Over time I expect more of this as well as simplified integration with its massive ecosystem.The more customers buy, the more they save
I say this somewhat tongue-in-cheek, but it’s true. One of the things I’ve always liked about the company is it has a strong focus on ensuring their customers optimize spend. AWS has an optimization service that looks at customers’ spending to ensure they are using the best services. Paying for lightly used data to sit in a top end storage tier? No problem: AWS will tell the customer what to move where.In addition to this, AWS continually lowers prices, often without telling customers. During his keynote, AWS Chief Executive Adam Selipsky noted that it has lowered prices 119 times in 15 years, often without the customer knowing. Pasquale DeMaio, AWS’ vice president of contact center, seconded the statement when he told me the company continually drops toll costs as it negotiates better rates, even when customers are in the middle of a contract.
As far as I know, no other vendor does this, because it’s counterintuitive to a healthy business. However, it builds a tremendous amount of customer loyalty and, by ensuring customers spend less, they invariably spend more as they save more.
It’s time to democratize AI and machine learning
The industry momentum around AI and machine learning has never been stronger. Much of the use of them has been by leading-edge companies with sophisticated developers familiar with how to build and operate machine learning and AI models. If the technology is to become ubiquitous, it needs to be democratized through simplification.At the event, AWS announced eight updates to SageMaker to broaden adoption, including key governance and responsible AI features. Key new features include Role Manager to make it easier for administrators to control access for improved governance, Model Cards to make documentation easier, Model Dashboard offers and centralized dashboard to track performance and behavior, and Studio Notebook to inspect and improve quality and automated model validation. Also, announced were AI Service Cards for responsible AI, which I covered in this post.
AWS is choosing to partner with security vendors rather than compete
Best practices for cloud security are certainly an interesting debate, since there is no consensus as to what role the cloud provider should play versus a third party. Google LLC’s multibillion-dollar acquisition of Mandiant Inc. has thrown the gauntlet down and will compete with the mainstream security vendors. Although AWS has its own security portfolio, there is more of an emphasis on providing information to the security ecosystem to allow that group to do what it does best.At re:Invent, AWS announced the Open Cybersecurity Schema Framework or OCSF, which includes an open specification for the normalization of security telemetry. It was good to see several key security vendors announce support for OCSF, including Splunk Inc., Palo Alto Networks Inc., Rapid7 Inc., Tanium Inc., Zscaler Inc., Broadcom Inc. and Cribl Inc., to name a few.
At the show, I discussed this with Cribl CEO Clint Sharp, and he was excited about it because AWS has the size and the market share to make OCSF stick. We discussed how there have been attempts in the past to standardize security, but they were driven by a security vendor, making it seem self-service, versus AWS, which could act as neutral body to the industry. Will it stick? Who knows? But based on the support it has, it is off to a running start.
This was certainly a solid show for AWS even though there was no “big announcement” carry the event. Instead, AWS continues to add bricks to a wall that’s getting broader and higher, and that has enabled it to keep its sizable lead over Microsoft Corp.’s Azure and Google Cloud Platform.

Amazon Connect initially disrupted with a pay-per-use price model but is now flexing its artificial intelligence muscles.

AWS Connect Brings AI and ML with a Pay per Use Model
Amazon Connect, which is built on the same technology that Amazon customer service agents use worldwide, utilizes artificial intelligence (AI) and machine learning (ML) to deliver a personalized customer experience (CX). It’s a single solution with a simple user interface (UI) that companies can implement across multiple channels to connect with customers. One of the concerns regarding cloud contact centers is that they don’t scale past a few thousand agents. This has never been the case with AWS as its own contact center is almost 100,000 agents. One of the unique attributes of Connect is that it uses a true “pay per use” model. With traditional CCaaS services, customers pay $X/month/user. With Connect, a business can provisioning as many agents as they need but only pay for utilization. According to AWS, there are hundreds of thousands of customers making more than 10 million contact center interactions every day on Amazon Connect. Some of its big-name customers include Adidas, Adobe, and National Australia Bank, all of which have successfully rolled out interactive voice response (IVR). In the contact center, IVR provides callers with a self-service option before being connected to a live agent. It’s particularly valuable for seasonal companies where call flows tend to rise and fall. I recently talked with the Global Head of Reservations for a major hotel chain and she said the pay-per-use model saved the company a significant amount of money throughout the pandemic as travel halted. As travel picked up, the company could add to its deployment without having to guess at how many agents to provision.Agent Workspace Reduces Training Time
While the unique financial model has created the opportunity for AWS, its differentiation comes in AI-based advanced features. Last year, AWS launched Amazon Connect agent workspace, which unifies all the tools agents need in one place to manage customer inquiries, view information, resolve issues, and handle calls, chats, tasks, and cases. At re:Invent, AWS introduced step-by-step guides for Amazon Connect Agent Workspace to reduce agent training time and resolve customer issues faster. These one-click actions are based on different triggers from customers, such as their profile information, case history, or past interaction from IVR. The triggers help provide agents with the most relevant, guided actions that they can take to resolve an issue. For instance, if a customer is calling about a lost order, the agent workspace will display the customer profile, the billing details, shipping status of the order, and actions in the step-by-step guide for replacing or refunding the item.Amazon Connect Flows Brings No-Code to IVRs
Supervisors can design guided experiences for agents using Amazon Connect flows, a no-code workflow tool for IVR. The guides are use-case dependent and customizable. There are relevant drag-and-drop-components that support the guides, which can be configured within Amazon Connect flows. In addition to rolling out step-by-step guides for agent workspace, which is available now in preview, AWS improved the search and filtering function in flows as well. “This is a great example of a capability where we heard consistent problems like inefficient apps and long, hard training for agents—all of which finds its way to end customers,” said Ryan Braastad, senior product marketing manager for Amazon Connect. “We had the ability to test this with Amazon customer service, and working closely with them, we were inspired to make this available as part of Connect.”Machine Learning Improves Forecasting
The second announcement is around the simplicity and single-click functionality of Amazon Connect. Earlier this year, AWS launched Connect forecasting, capacity planning, and scheduling in preview. It allows companies to predict, allocate, and verify that they have the right number of agents scheduled at the right time to serve their needs in the contact center. This ML-powered staffing capability became generally available this week. “The folks that do this for a living don’t have a lot of time. It’s usually a supervisor who also does the forecasting or planning or scheduling, and they want to get back to what they consider their main job as opposed to doing the administrative work,” said Tom Johnston, principal product manager for Amazon Connect. One Amazon Connect customer, Litigation Practice Group, was running into challenges with forecasting based on the historical data the company had with its previous system. Once the law firm switched to Connect, it saw accuracy of over 95 percent for forecasts and schedules. For the firm, the simplicity, flexibility, and the high quality of data “were all main reasons why they liked using it,” said Johnston. Lastly, AWS announced that Contact Lens for Amazon Connect will expand to include omnichannel support. AWS also added evaluation forms in Contact Lens to improve agent performance. Contact Lens is a tool that analyzes conversations between customers and agents through speech transcription, natural language processing (NLP), and sentiment analysis. While it’s been used primarily for voice, it can now analyze conversations across voice and chat channels in one place.

One of the major focus areas for Amazon Web Services Inc.‘s 11th annual re:Invent conference this week is machine learning and artificial intelligence, and that focus comes as businesses are looking to use the technologies to analyze data and transform their organizations.
At the event, the company announced a new resource called AI Service Cards to improve transparency and advance responsible AI. The use of AI and machine learning has exploded over the past couple of years as businesses are using the advanced technology to improve customer experience, streamline their operations, drive innovation and solve some of the planet’s biggest problems in climate, healthcare and exploration. With this much at stake, there is tremendous pressure on AI practitioners to help ensure that the AWS AI services are developed in an ethical way and that developers use them responsibly.
The “card” itself is a documentation template that provides critical information on the following important factors:
- Fairness and bias which looks at how a system impacts different subpopulations of users such as gender and ethnicity.
- Explainability which is a mechanism to understand and evaluate the outputs of an AI system.
- Privacy and Security examines how model data is used to understand privacy & legal considerations as well as protect against from theft and exposure.
- Robustness are mechanisms to ensure an AI system operates reliably.
- Governance scores the processes to define, implement, and enforce responsible AI practices within an organization.
- Transparency provides information about an AI system to enable stakeholders to make informed choices about their use of the system.
AI Service cards make responsible AI easier as it provides a single place to find information on the intended use cases, limitations, and design choices AWS made when designing the model and deployment and optimization best practices. This is part of AWS’ commitment to build its AI services with fairness, remove bias and be transparent and secure. At time of launch, AWS will have AI Service Cards for the following models:
- Amazon Rekognition – facial matching
- Amazon Textract Analyze ID – text and document processing
- Amazon Transcribe Batch – speech transcription
Each AI Service Card is organized into four sections. The first is basic concepts, which provides information on the service itself and features included. The second is intended use cases and limitations, third is responsible AI design and considerations, and fourth is guidance on deployment and performance considerations.
AI Service Cards bring a high level of transparency to customers regarding the AI models. AWS goes through a rigorous process when building them, but that can be somewhat hidden from the customer as they use the finished product. This should be a useful resource for customers to ensure them that the AI they are using is built responsibly and with fairness in mind. Over time, AWS will roll out additional service cards.
The cards were one of several “responsible AI” announcements made at AWS re:Invent. The company also announced something called “SageMaker Model Cards” to help document customer-built machine learning models. Many businesses use homegrown tools, spreadsheets, or even email to document things like business requirements, model assumptions and observations, and key decisions. This might suffice if the number of models is small, but as they grow in volume and size, this ad hoc approach does not scale and leads to errors.
The Amazon SageMaker Model Cards use machine learning algorithms to extract information from the model and automate the document creation to track things such as input datasets, training results and more. There is also a self-guided questionnaire to document additional information like performance goals, risk rating, bias information and accuracy. These can be used to help customers improve governance of their own models while ensuring responsible AI.
AI and machine learning will continue to grow in usage, exponentially based on customer feedback. AWS has more experience than perhaps any company in building models, governance and the responsible training and use of them. It’s good to see the company taking its experience and making customer facing tools to ensure its customers can benefit from the long history AWS has in this area.

Brands need to take digital trust seriously – or face losing customers.

Four Pillars of Digital Trust
Before diving into the findings, it’s important to understand the foundation of digital trust. Digital trust consists of four key building blocks:- Standards that define trust.
- Compliance and operations that establish trust and verify the digital certificates or instruments of that trust.
- Trust management to ensure companies are properly handling certificate life cycles.
- Connected trust for more complex supply chains.
Trust is Core to Customer Retention
According to the data, 99% of enterprises believe their customers would switch to a competitor if they lost trust in the company. In fact, about two-thirds have switched vendors after losing trust in that vendor. Nearly half (47%) of the consumers surveyed said they stopped doing business with a company that lost their trust in the past, while 84% would consider switching in the future. Digital trust is just as important for employees (100%) as it is for enterprises. The majority would consider switching vendors if they lost trust, with approximately half (51%) saying switching would be “likely.” Not surprisingly, the industry where digital trust ranks the highest in importance is financial services, followed by tech companies, retail, and manufacturing. Both financial services firms and their employees value digital trust due to the sensitive nature of their data.Data, Security, and Customer Expectations Raise the Bar on Digital Trust
The top driver of digital trust is the growing importance of data. Every person in the world will consume around 20,000 gigabytes (GB) by 2025 — that’s 174 zettabytes (ZB) in total data. While the amount of data is significant, the importance of the data is even more valuable, whether it’s personally identifiable information, medical records, or personal photos. The second driver is the increasing threat surface as enterprises move to hybrid work environments. With remote sites, multiple clouds, and connected devices, enterprise networks have become more vulnerable to cyberattacks. As a result, the number of bad actors like hackers, cyber criminals, hacktivists, and inside actors grows each year — another reason why having digital trust is crucial. Customer expectations have gotten greater. As mentioned above, people are quick to switch to a competitor if they lose trust in a company. Although all companies value customer loyalty, one of the top concerns for consumers is security because more than half have experienced cyberattacks. The most common one is hacked accounts (26%), followed by data breaches (20%), bank and credit account theft (18%), account takeover (14%), hacked devices (13%), and identity theft (12%). With so much at stake, enterprises are optimizing digital trust to protect their customers and employees. A typical organization started its digital trust journey two to three years ago and has completed 75% (or more) of the journey so far, the report found. However, the top challenge cited by IT has been managing digital certificates. Regulatory compliance, the complexity of securing multi-vendor networks, and the lack of staff expertise were cited as the other leading challenges. There are several digital-trust initiatives enterprises have implemented to address these challenges. The main one is device identity and operations security, now fully implemented by 74% of enterprises. Zero-trust policies have been fully implemented by 58% of enterprises and certificate life cycle management by more than half of enterprises (55%). Across the board, top-tier companies are doing much better in driving digital trust outcomes, said Jovin. That’s because the top tier is four-and-a-half times as likely to believe a loss of customer trust will lead to losing the customer. These companies are also more likely to believe digital trust affects their brand, sales, and margin. Furthermore, they’re about five times as likely to switch partners if they lost trust in them. The top-tier companies are also further along in their digital trust journey and are likely to complete that journey much earlier than the bottom tier. Unlike the bottom tier, the top tier is more concerned about cyber threats. These companies take cyber threats seriously and are up to three times as likely to be engaged with important cybersecurity safeguards.It’s Time to Establish a Digital Trust Office
DigiCert recommends organizations establish a digital trust office and appoint a leader who can be in charge of key initiatives. It’s a new concept, and those in IT architect positions most often take on the role of a digital trust officer. However, it will be essential going forward to create this stand-alone position within IT since it combines systems and data. “When we look at the findings, we see digital trust attached to outcomes in a meaningful way. It can affect top-line revenue, customer loyalty, and customer engagement,” said Jovin. “Our advice to organizations is to think about digital trust as a strategic imperative that supports the business, not just an amorphous security concept.”
Cloud computing leader announces key goal on water efficiency for data centers


Don’t count RingCentral buying 8x8 a done deal quite yet.

Low Valuation Makes 8x8 an Attractive Takeover Candidate
8x8’s peak market cap was a shade under $4 billion, so acquiring at this price seems like a steal. Its past quarterly results should better balance growth and profitability with a goal of having double-digit profitability in its 2024 fiscal year. Given the trend in previous quarters, the company seems on track to hit this. In acquiring 8x8, RingCentral would gain a company accretive to profitability, although dilutive to growth. The argument against this is although 8x8’s value has fallen, so has RingCentral’s, which now has a market cap of $3.3 billion, down from a high of $42.7 billion. At its peak, RingCentral could have made an overvalued stock offering, like what Zoom tried with Five9, swallowed up 8x8, and essentially gotten it for next to nothing on a stock-adjusted basis.The Market is Maturing; RingCentral Needs 8x8 to Continue to Grow
Currently, the UCaaS market has no shortage of providers, and we might have too much supply for the level of demand. In mature markets, share gain is often hard to do without an acquisition. RingCentral could go on a buying spree and snap up many of the smaller UCaaS providers and do a roll-up — like the Rich McBee-led Mitel. In addition to 8x8, RingCentral could set its sights on other small players like Sangoma, Wildix, or even Dialpad, if it wants to raise a bunch of debt. This type of consolidation would give RingCentral consistent, year-over-year high growth numbers and cross-sell opportunities. The downside of this strategy is that integration becomes a big challenge, and RingCentral would need to maintain multiple platforms. This is one of the factors that eventually derailed Mitel. Also, I would argue that RingCentral does not need to acquire to grow since we are in the early stages of cloud communications. If one takes Zoom, RingCentral, Webex, and others at face value regarding the number of cloud-calling seats sold today, we are barely at 20 million. This is just 5% of the 400 million business desktops in existence today. I would argue that the bigger challenge for RingCentral and the rest of the UCaaS providers is to get the status quo off legacy systems and into the cloud. Just 25% of the market moving would increase the total addressable market (TAM) five times.By Acquiring 8x8, RingCentral Would Get a Contact Center Solution
Over the last several years, we’ve seen a trend toward UCaaS/CCaaS integrations. To date, RingCentral’s strategy is to resell NICE’s product. On the other hand, 8x8 has been aggressive with its XCaaS messaging, which is based on having a single software stack for UCaaS and CCaaS (as CPaaS). An acquisition would give RingCentral its own product, obviating the need for NICE. This would be like the tact it took with Zoom, as at one time, RingCentral Video was Zoom under the covers. Today, RingCentral has its own video, and all new sales no longer include Zoom. With 8x8, RingCentral could build its own unified product and eventually shed NICE. The opposition to this point is that RingCentral has been wildly successful selling contact center with NICE as its partner, and the purchase of 8x8 would disrupt this. When RingCentral resold Zoom, the partnership was in place for RingCentral to be able to check the box when it came to video, but its sales motion in UCaaS was to sell calling. One could look at Zoom as a stop-gap measure until it could build its own video. With contact center, RingCentral has built a big business, and many of its UCaaS sales often start with NICE-based CCaaS. Also, while 8x8 has a nice down-market contact center solution, it’s not nearly as sophisticated as NICE, which has much greater enterprise appeal.ZK’s Prediction
While anything is possible, I do not believe RingCentral will pull the trigger on 8x8. I am a believer in the expression, “where there is smoke, there is fire,” and RingCentral might likely have looked or is currently looking at 8x8. If they can get the company for a bargain, it would make the acquisition. All well-run companies, of which RingCentral is certainly one, constantly look at moves that can increase shareholder or customer value. It’s likely the company has looked at other moves, but it doesn’t mean there is anything imminent. From 8x8’s perspective, under Dave Sipes, the company has done a much better job of sales execution and lowering costs to shift to improve profitability. Management’s tone on earnings calls is that this improvement will continue, so selling later should fetch a better price. As I said, anything is possible, but I do not believe we will see RingCentral purchase 8x8 any time soon.

With its fiscal first-quarter earnings reported Wednesday, networking giant Cisco Systems Inc. started off the year with a bang.
Cisco’s numbers are always an important industry litmus test because it’s the biggest networking vendor and has the broadest portfolio. How their quarter goes is a general indicator for the direction of the network, collaboration, service provider spending and security.
Given the weak guidance given by Microsoft Corp., Meta Platforms Inc., Amazon.com Inc. and others, all eyes were on Cisco. The company certainly bucked the trend of a gloomy outlook with a more than solid “beat and raise.” For the most recent quarter, the company generated $13.64 billion in revenue and adjusted earnings of 86 cents per share. That was ahead of consensus estimates of $13.29 billion in revenue and 84 cents per share in profit.
For the second quarter, the company expects revenue growth between 4.5% and 6.5% with earnings between 84 and 86 cents. Financial analysts had projected 4.2% growth and 85 cents of earnings. Adding to the positive news, Cisco upped its full-year guidance. It has projected growth of 4% to 6% and raised that to 4.5% to 6.5%.
The numbers tell a high-level story, which can sometimes be misleading, so it’s always important to look behind the numbers at the company narrative to understand the business fully. Here are my top takeaways from the quarter:
The network has never been more important to businesses
The network has long been thought of as the “pipes” or “plumbing” of a company and most business executives gave it little thought. But the digital era has changed that perception. Almost all digital initiatives involve some combination of mobile devices, cloud services, connected things, edge computing and other network centric technologies.
This has raised the value of the network, since one can’t run a digital business on a legacy network. A supporting data point comes from my research that found 61% of business leaders believe the network is more important today than it was going into the pandemic. This has caused businesses to refresh the wide-area network, Wi-Fi network, data center and everywhere else connectivity is required.
On the investor call, Chief Executive Chuck Robbins (pictured) made the following comments which supported this thesis. “We also saw record performance from a number of products, including the Catalyst 9000 family, Cisco 8000, Wireless, Meraki, ThousandEyes and Duo,” he noted. “Networking is becoming increasingly critical to every organization, led by digital transformation, hybrid cloud, AI and ML workloads. This is driving demand for our technologies. As we’ve discussed, there are also tailwinds for our business such as hybrid work, 400 gig and beyond, 5G, Wi-Fi 6 security and full stack observability. We believe these broader technology transitions will require every customer to re-architect their network infrastructure, and in turn, fuel long-term growth across our portfolio.”
It’s worth noting that this “rising tide” for networking isn’t unique to Cisco, as its pure-play competitors of Extreme Networks Inc., Juniper Networks Inc. and Arista Networks Inc. all saw strong quarters. The growth in networking driven by modernization is a multiyear trend with Cisco capturing the biggest piece of the pie.
Cisco’s growth is sustainable
Historically, Cisco has had periods of growth that were red herrings, as much of that growth was driven by services, with product growth in decline. While the top-line numbers may look impressive, a company such as Cisco having its services outpace its product generally will lead to the business declining in the future because the company’s services are tied to product growth. This means slowing products will eventually lead to slowing services, which in turn leads to revenue decline.
This quarter product revenue was $10.2 billion, up 8%, while service revenue remained flat at $3.4 billion. Within the product number, Secure Agile Networks rose 12%, with switching growing in double digits.
There were a couple of hiccups in the product area, though, with data center switching declining slightly as was enterprise routing and collaboration. The areas where Cisco is seeing a decline are where the company is transitioning the business from a legacy on-premises solution to a more modern product. For example, Cisco has massive share in on-premises collaboration but has been transitioning this to Webex. The shift from perpetual revenue to subscription does cause a drag on the business, but those areas should resume growing soon after most customers have migrated.
Security is another area where Cisco is going through a transition. Its end-to-end security business rose 9%, but its industry peers are all growing significantly higher than that. Like collaboration, the installed base of Cisco on-prem is huge and Cisco needs to accelerate that shift and do a better job of tying security to networking.
All in all, it was a very strong product quarter for Cisco and that bodes well for the future.
Supply chain constraints showing signs of easing up
During the call Robbins made the following comment: “The strength of orders, increased visibility and easing supply situation provides us with enhanced visibility and predictability, which underpins the confidence we have in our business and our increased outlook for the year.” This was part of the reason Cisco was able to up its full-year guide confidently. Chief Financial Officer Scott Herren added, “As we navigated a complex supply environment, we were able to increase our shipments this quarter, resulting in about a 10% decrease in total backlog sequentially, which remains at the second highest level we’ve seen.”
It’s true that Cisco’s backlog remains more than $30 billion, but it’s also true that Cisco has better visibility into what’s coming and has a world-class supply chain team. Also, many customers I have talked to are now planning 18 months out to accommodate for product shortages. The combination of supply chain improvements and new customer buying behaviors will remove much of the friction of the past year. Herren did state that the company is seeing seasonality returning to normal, which should lead to reduced lead times and that’s good news for Cisco, its partners and customers.
Cisco is continuing to transition to subscription and software
Every metric that Cisco tracks that involve software or subscription showed signs of continued progress. This includes:
- Annualized recurring revenue of $23.2 billion, up 7% year-over-year, product ARR up 12% YoY
- Software revenue at $3.9 billion for the quarter, up 5% YoY, software subscription up 11% YoY
- Remaining performance obligations of $30.9 billion, up 3% YoY, product RPO up 5% YoY, short-term RPO $16.4 billion
Cisco has been methodically shifting its business to software and subscription, and although there was no “big wow” this quarter, the numbers show a continuation of a multiyear trend.
A restructuring of the workforce is underway, not cost savings-based layoffs
On the call Cisco mentioned “restructuring actions focused on prioritizing our investments across our highest growth opportunities” as well as plans to incur pre-tax charges for severance and other expenses. This, of course, means layoffs, causing some of the media to interpret this as cost-cutting and headcount reduction. Although this makes good headlines, in this case it’s not true.
On the call both Herren and Robbins mentioned the actions taken are a realignment of people and not driven by cost. Herren added, “In a perfect world, you’d have 100% skill match, and you can take the people in the areas or the skills in certain areas and just move them to where we need to invest and unfortunately it’s not a perfect world.” He then followed up that statement by saying, “By the time we get to the end of the (fiscal) year, our expectation is we have about the same headcount that we had at the beginning of the year.”
Cisco’s business is as diverse as any and part of the success of the company has been ensuring the different business units are staffed correctly. While it’s painful for the people being let go, it is the right way to run business. One the call, management did not give much detail but did mention it was because they wanted to speak to the employees first before making details public, which is also the right thing to do.
Overall, Cisco executed well in its first quarter in a turbulent, complex environment with many global macro issues. It continues to make steady, methodical progress in its business model shift. As the supply chain constraints easing up, Cisco should see an acceleration of the business as that backlog gets reduced, setting up a strong fiscal 2023, although there are still many macro factors that could create “air pockets” of business. I’ll be watching.