Cisco’s approach to AI includes a processor designed for AI's networking demands, leveraging Cisco’s AI capabilities to bolster security and observability, and more.

It’s been about a year since generative AI (Gen AI) burst on the scene. Many people have played with the technology and now understand its use case is creating original content or data that mimics real-world patterns. For IT vendors, the use cases go far beyond creating simple pictures or writing press releases. In fact, the network vendors have been looking at how to use the technology to transform network architecture as well as how they are managed. Cisco, by far the industry's largest networking vendor, believes that AI will play a critical role in modern networks regarding handling their increasing complexity and scale. During a global analyst call, Liz Centoni, Cisco’s Executive Vice President, Chief Strategy Officer, and General Manager of Applications, recently shared details about its multifaceted AI strategy. Here are the highlights.

Gen AI Strategy and Integration

Cisco’s approach to AI is multifaceted and deeply integrated across its portfolio. A key element of Cisco’s evolution toward gen AI is the development of Silicon One, a chip designed to handle massive workloads. Silicon One supports Cisco customers and hyperscalers in building AI-based infrastructure, encompassing advanced technology, data center networking, and optics. Most networking vendors use merchant silicon to power their products, but custom silicon gives Cisco its price-performance advantage. Consider the GPU as an analogy. Most understand that the processing power required for high-end graphics is far beyond the capability of an off-the-shelf CPU, so companies like NVIDIA make chips specifically designed for the rigors of graphics processing. Similarly, Cisco’s Silicon One is a processor designed for networking demands. However, Cisco’s strategy goes beyond silicon as the company has many capabilities built into software. Over the past decade, Cisco tapped into the power of AI to improve threat detection, provide better customer support, and collect richer insights. The networking giant has integrated AI-powered capabilities across its many products. Webex AI Assistant, for example, is a feature that enhances the Webex meeting experience through voice-activated controls. Users interact with Webex AI Assistant using natural language commands to automate common tasks. “We’ve been incorporating AI into our portfolio for a long time, and using gen AI is propelling our innovation even more than ever before. The idea is moving into the era of self-healing networks, closed-loop automation, and extended visibility into network traffic—things that the industry has talked about for a long time. This is the time when we can really make that happen,” said Centoni. Internally, the company uses AI to help different departments, such as sales, marketing, and human resources (HR), focus more on creative and strategic work instead of spending time combining data. According to Centoni, Gen AI adds a new dimension to Cisco’s AI capabilities in machine learning (ML), deep learning, and computer vision. It signifies a leap towards more creative, efficient, and flexible AI applications, reshaping customer experiences and operational efficiencies.

Acquisitions and Investments in AI

Acquisitions and investments also propel Ciscon’s AI strategy. The acquisition of companies like Splunk and Armorblox has bolstered Cisco’s AI capabilities in security and observability. Splunk leverages large data sets to enhance digital resilience and security, while Armorblox uses natural language understanding to improve threat detection. “We want to address these complex threat vectors that blur the line between cyberattacks and legitimate activities. The attacks are getting so real, and it’s becoming hard to distinguish what’s legitimate and what’s not,” said Centoni. “We also want to support security analysts better to identify and prevent these emerging attacks given the number of incidents, alerts, and events coming their way.” Another recent acquisition, BabbleLabs, has provided Cisco with a way to separate human speech from background noise, thereby improving its collaboration and conferencing tools with a built-in noise-cancellation feature. It’s available to all Webex Meetings users, whether they connect via a conference room or a mobile device. While many vendors now tout this capability, Cisco’s background noise removal can eliminate all noise but human voices or everyone’s voice but the speaker. These acquisitions, among others, are part of Cisco’s vision of AI as a driver of automation, efficiency, and co-creation. The goal is to “democratize technology,” making it accessible to a broader range of users, regardless of their technical background, Centoni explained.

Responsible AI and Trustworthiness

Central to Cisco’s approach is a focus on responsible and ethical AI. The company has integrated data security and privacy principles into its product development and company policies. A key aspect of this approach is transparency and accountability in using customer data for training AI models, with Cisco investing in alternative methods like synthetic training data to minimize reliance on customer data. Regarding infrastructure, Cisco’s investment in AI is innovative and environmentally conscious. The launch of Silicon One G200, for instance, shows Cisco’s commitment to developing high-performance AI capabilities that are also sustainable. Designed for Ethernet-based AI/ML deployments, Silicon One G200 provides double the bandwidth and power efficiency, along with half the latency of its predecessors. The chip can handle more data using less energy and quicker response times. Furthermore, Cisco extends its AI expertise to partners and customers, helping them implement AI-driven strategies. This is part of Cisco’s broader goal to bridge the gap between having an AI strategy and being able to execute it. Cisco has developed an AI Readiness Index to help partners gauge whether their current IT environments are ready to support AI. Despite all the benefits of AI, Centoni acknowledged the challenges, including bias, data privacy, and intellectual property rights. Cisco advocates a balanced approach between developing AI tools and regulations to ensure responsible use. “Responsible AI, or rather the move toward trustworthy AI, is a top area for us. It’s also a dynamic area because it keeps us on our toes. We can’t sit back and feel like we’ve covered everything. It’s a space we know we need to continue to work at,” said Centoni.

The Takeaway

Cisco’s cautious and thorough approach toward gen AI reflects a deep commitment to data safety and security for its operations, as well as its customers and partners. As Cisco continues integrating gen AI into different products, it’s well-positioned to help other companies leverage this emerging technology.

Before AWS re:Invent opened today, Amazon Web Services Inc. held a Sports In Action Showcase, which included a sports panel with three AWS executives who outlined how the company is working with sports organizations. The executives were Julie Souza, head of sports for AWS Global Professional Services, Sam Schwartzstein, producer for analytics and insights for Prime Video Live Events, and Andrew Reich, a senior consultant in sports. The panel started with Souza highlighting the five pillars of innovation for AWS in the sports industry. These are:

• Live cloud production and distribution. Leveraging the cloud for production enables flexible, scalable, and sustainable creation and distribution of content.
• Direct to consumer. Delivering high-quality, low latency and interactive sports content directly to fans increases engagement and creates monetization opportunities.
• Smart venues. Reducing the friction with seamless entry, frictionless point of sales for food and merchandising, and sustainable solutions to modernize venues. AWS Just Walk Out stores are an example of improving fan experience using technology to speed up purchasing.
• Fan data and analytics. Analyzing the massive amounts of data created during every game for audience segmentation, persona modeling, marketing, advertising optimization and personalization.
• Performance data and analytics. Using computer vision and tracking data to uncover insights to drive better engagement and monetization and improve player safety and game strategy.

Although the first four bullets are interesting, it’s the final bullet where the panel spent most of its time, as AWS and its sports partners have almost unlimited potential to use data to change almost every aspect of sports. Perhaps the biggest change in sports has been the use of tracking data. This includes analysis at a league level for rules development, analysis of officials, and creating new types of analytics, as well as at a team level for recruiting and game strategy. Then there’s using the data to attract new fans to the game by using the data to tell stories through a different lens. Schwartzstein referred to this as being able to “show the unseen to the untrained eye” and then mentioned that was a big part of his job. This is done by creating new models and graphics and educating the audience about why they should care. He explained fan education was the main driver behind Prime Vision with Next Gen Stats on Thursday Night Football. Anyone who has watched it can see right away it’s different than a typical broadcast that looks down the line of scrimmage at just a handful of players. Prime Vision shows all 22 players on the field and will highlight key offensive and defensive players to help fans understand where to focus their attention. This can greatly complement the play-by-play and color commentary on the broadcasts. It’s important to understand how the data is being collected. Souza mentioned how, at one time, the box score was the only source of information. Today, the different leagues use different techniques to collect data. For example, in the NFL, players have an RFID chip in their shoulder pads. There’s also a virtual web around the field to understand who is on and off. This lets AWS track player speed, the direction they are moving, acceleration and other information. Initially, this data was used to calculate metrics such as completion percentage and catch rate, but now AWS is using AI to predict things like which player might blitz and then what the offensive coaches should be looking at. The NHL also uses chips on player shoulder pads but also the puck. Other sports, like basketball and soccer, use optical tracking to capture player and ball movement. Although the data sources might differ, Souza explained that the output is still the same. To get a sense of the volume, Souza mentioned the NFL collects 300M data points per season, and Formula1 captures a staggering 1.1 million data points per second, which makes machine learning and AI-based analysis a must, since people can’t process that much data manually. Reich then provided examples of how the data has been used to drive change. In NASCAR, pit crews have access to a myriad of information to help them know exactly when to change tires. This was more art than science; a mistimed tire change could cost a driver a race. In the NHL, there is now an abundance of data on face-offs, which hasn’t been focused on much historically but is a big part of the game. Teams can use the data to create better matchups, but the league can use it for analysts to talk more about it on broadcasts, creating more educated and engaged fans. Souza did a great job of summing up the importance of analytics by talking about the work AWS is doing with The Bundesliga, the top soccer league in Germany. With that league, AWS shows “Match Facts,” which is live data shown to fans. The league surveyed 1100 fans, and 97% said they improved game viewing, and 90% said it taught them something, which speaks volumes as these are highly educated fans. Souza commented, “When you feel smart about what you are watching, you will watch more of it.” Like all industries, sports is changing, and every league is trying to improve the experience of their existing fans but also attract new ones. Data is the key to success as it is foundational to new experiences that appeal to both the hardcore fan and casual ones. AWS has been actively using Next Gen Stats to augment fan experience, but as Souza said on the panel, “We are just getting started.” More to come to a broadcast near you.

Thanksgiving has passed in the U.S., so it’s on to the December holiday season — but before we can deck the halls and jingle some bells, an important event is coming up: AWS re:Invent 2023. This upcoming week, an estimated 60,000-plus people will descend upon Las Vegas to check out the latest and greatest from the cloud computing leader. One of the things I like most about the show is that Amazon Web Services Inc. has done a nice job of evolving the event from being a vendor show to more of an industry show for all things cloud computing. Most businesses seem to have shaken off the COVID cobwebs and have been full steam ahead with many emerging technologies. Because of this, I’ve been looking forward to this year’s show for some time. Here are the top five things I’ll look for at re:Invent:

Generative AI

This might be the most obvious thing to look for this year, as it’s hard to go to any event without being hit over the head with generative AI. Specifically, with AWS, one would assume that generative AI will be sprinkled throughout the keynotes as part of AWS’ vision for the industry. However, I am expecting AWS to talk more than vision. The company always does a great job of parading customers out onstage during the keynotes to provide specific examples of how technology can transform a business. I’m hoping to see some in this area. Also, one of the core principles of AWS has always been to drive innovation to make things easier for its customers, and generative AI can do that an embedded technology. Some people say that AWS is behind on generative AI, which contradicts what I’ve seen in my customer conversations. I do think it’s fair to say that AWS is behind on generative AI marketing, but the company has never been one to have its marketing outpace innovation.

Silicon investments

For decades, the industry relied primarily on off-the-shelf silicon to power infrastructure, but over the past several years, more companies have built their own. I’ve talked to AWS about why it’s investing heavily in silicon, and executives told me building custom chips allows it to operate faster, at a lower cost, while providing better performance. There is also a power benefit, which is critical as sustainability has become such a big driver of modernization. AlthoughAWS has used re:Invent to launch the latest and greatest services, its most established and largest volume services are infrastructure and silicon, which help customers save money with better performance.

Applications

Most people think of AWS as a company that provides building blocks for applications, but it also offers several of its own software-as-a-service applications. A few years ago, AWS released Connect, a cloud-native, AI-based contact center solution. Last year, the company took the covers off AWS Supply Chain, which, as one would expect, also uses cloud-native and AI as its differentiator. Although the applications are certainly newsworthy, what’s more interesting is how AWS rolls out applications. Both Supply Chain and Connect were built off internally facing services. As an example, Amazon has one of the biggest contact centers in the world, with, I believe, somewhere in the range of 70,000 agents, so once it became customer-facing, it was already fully baked. The same can be said for Supply Chain. Amazon has so many homegrown applications – logistics, human resources, inventory management and so on — that the challenge is prioritizing which ones to roll out. We should expect to see more of applications at every re:Invent. This gives customers of all sizes access to applications that may have been out of their reach with a pay-per-use model.

Telecom and 5G

5G has been hyped for over five years, but it’s yet to have the societal impact many people predicted. I believe we are on the precipice of seeing 5G finally have the transformative effect we have all been waiting for, and AWS is playing a key role in the infrastructure and showcasing the use cases. At the Mobile World Congress, AWS created its NextLevel Experience area earlier this year, demonstrating 5G-enabled services. The organization has a massive 5G ecosystem, and I’m looking forward to checking out the expo hall, where plenty of 5G should be on display.

Better together

The catalog of AWS services is massive, and many customers like to put the building blocks together. Developers use the services, assemble the components and build something. This works for many organizations but only for some, as it can create a lot of heavy lifting and skills to tie the services together. Over the past few years, AWS has done a better job of pre-integrating the products to simplify deployment with predictable results. At re:Invent 2022, AWS announced the integration of its relational database, Aurora, and Redshift for cloud data warehousing. Customers rarely buy one without the other, so putting them together makes things easier for AWS customers. Over the next week, we should expect more solutions that create a “better together” story. Given the massive hype around generative AI, I expect anything related to this to steal the show this year. However, there’s more to the show than that, and I would encourage anyone attending the show to investigate the areas I have outlined as a good starting point for AWS innovation.

The communications industry is rapidly shifting from best of breed to best of suite. When it comes to interacting with employees and customers, there are many ways to do it. Historically, customers have had to buy product A for calling, product B for meetings, product C for contact center, and so on. The result was that customers to pay 2-5x what they needed to pay if they could consolidate to a single platform.

With Communications, Platform is the Way Forward

In response to the issue above, the vendor community added more and more capabilities, creating a single platform that can deliver communications and collaboration of all forms. There’s an obvious “one throat the choke” benefit in this approach. And in the long term, as the industry becomes AI-driven, the single stack will equate to a single data center with which to train the models. This week, cloud communications provider RingCentral announced the general availability of two new offerings. Ring CX is a cloud-native contact center solution that uses RingSense AI, the AI engine currently integrated into RingCentral MVP, the company’s UC suite. Also unveiled was the general availability of RingCentral Events, formerly Hopin Events, which enables customers to hold virtual, in-person, or hybrid events.

RingCX is Designed for Companies that Want a Digital-First Contact Center

RingCX is the company’s own cloud contact center solution. The product is designed with a modern contact center in mind, where the assumption is that customers will start interacting with the brand through some kind of digital channels such as bots, messaging, or self-service. RingCX is infused with RingSense AI, which has three primary benefits:

• It makes the digital channels smarter so a customer can converse with a bot and have a more natural conversation.
• If the interaction needs to move to an agent, the agent is equipped with insights from that call and previous ones. During calls, the platform generates AI-powered summaries so agents can keep track of key points when talking to customers.
• After a call is completed, the solution provides detailed transcriptions and summaries, giving supervisors a clearer view of each interaction.

Beyond its AI capabilities, RingCX stands out for its rich omnichannel capabilities. It unifies multiple communication modes, such as voice, video, social media, SMS, and email, into a single, user-friendly interface. This allows agents to interact with customers through their preferred channels while maintaining a deeper understanding of the customer’s history and needs. RingCentral is being aggressive with pricing. At $65 per agent per month, it includes various features like voice and video communication, over 20 digital channels, AI-driven summaries, and unlimited domestic inbound and outbound minutes. The new RingCX solution complements its RingCentral Contact Center product, delivered via its partner NICE. I asked RingCentral if they plan to stop selling the product, and they said no. RingCentral Contact Center is ideally suited for large customers with complex requirements, whereas RingCX suits companies with a digital-first mindset.

RingCentral Events Makes Virtual, In-Person and Hybrid Events Easy

The second announcement, RingCentral Events, is the company’s hybrid event platform. One of the key advantages of RingCentral Events is its all-in-one nature. It can be used to register attendees and track analytics and can be accessed via a mobile app. It also offers features like check-in systems, badge printing, and lead retrieval tools. The platform has integrations with over 40 different apps and data systems, making it flexible and easy for businesses that want to simplify event management. Ease of use is a major selling point of RingCentral Events. Companies can use the platform to create custom, branded event pages without coding knowledge. These pages can be tailored to display specific agendas, speakers, sponsors, and other relevant content, enhancing an event’s visual appeal and overall value. Additionally, it can comfortably accommodate events with over 100,000 attendees. Soon, RingCentral will also introduce artificial intelligence features in RingCentral Events to simplify and automate event management. One of these features is the Smart Content Generator, which uses AI to create various written materials for events, including titles, descriptions, email templates, and schedules. Another upcoming feature is the Smart Q&A, which uses AI to sort and categorize attendees’ questions, making it easier for organizers to manage questions during events. Additionally, the Smart Clips feature is an AI video editor that creates short, engaging video clips, which can be used to market events on social media.

Bottom Line: RingCentral Events

As the latest addition to RingCentral’s suite of business communication tools, RingCentral Events complements existing products like RingCentral MVP, RingCX, RingCentral Video, RingCentral Rooms, and RingCentral Webinar. Pricing plans for RingCentral Events start at $750 annually for events with up to 100 attendees. The collaboration industry was once filled with best-of-breed products, but every vendor tries to deliver a full stack of tools – from video to calling to events and contact centers. Customers have no shortage of options available today and should evaluate vendors on how integrated the features are across the suite of products. RingCX provides much tighter integration with RingCentral MVP and RingCentral quickly integrated Hopin into the platform. The ultimate winners of the platform wars will be the customer as they’ll get more features, faster at a lower cost.

The research underlines the urgency for businesses to balance the potential of gen AI tools with effective security strategies to ensure safe usage of this emerging technology.

As technology advances, organizations are always looking for the latest and greatest tools to help them stay ahead of the competition. However, a new study by Zscaler has revealed a concerning trend where organizations are rushing to adopt generative artificial intelligence (gen AI) tools despite security concerns. The study, All Eyes on Securing GenAI, delves into the implications of this trend on security. It’s based on responses from 901 IT decision-makers across ten global markets, focusing on companies with 500 or more employees. The IT decision-makers were surveyed in Oct. 2023 by Sapio Research. The findings are striking: an overwhelming 95 percent of organizations employ gen AI tools like ChatGPT in various capacities. Breaking down the numbers further, 57 percent fully use gen AI, while 38 percent are cautiously approaching their use. The most common use cases are data analysis (78 percent), R&D services development (55 percent), marketing (53 percent), end-user tasks (44 percent), and logistics (41 percent). However, alongside this rapid adoption, there’s a significant awareness of potential security risks, with 89 percent of organizations acknowledging this concern. Surprisingly, a considerable portion (23 percent) of these organizations lack any form of monitoring for their gen AI tool usage, highlighting a gap in security practices. The top concerns include the potential loss of sensitive data, limited resources to monitor use, and misunderstanding of the benefits/dangers. Another key insight is the IT teams’ role in driving the adoption of gen AI tools. Contrary to what might be expected, it’s not the general workforce but IT teams that are the primary users and promoters of gen AI. In fact, 59 percent of the survey respondents said IT teams are driving gen AI usage, while 21 percent said business leaders drive usage. Only 5 percent named their employees as the driving force behind gen AI. Despite recognizing the potential risks, many businesses, especially smaller ones, continue to embrace gen AI tools. For businesses with 500 to 999 employees, the adoption rate mirrors the general trend (where 95 percent of organizations are using gen AI tools). Still, the recognition of associated risks is even higher at 94 percent. The study also highlights a critical window of opportunity for organizations to address the growing security challenges. With IT teams leading the charge, it’s possible for businesses to strategically control the pace of gen AI adoption and strengthen their security measures. This proactive approach is crucial, as 51 percent of the respondents anticipate a surge in gen AI interest before the year’s end. This means organizations must take immediate action to bridge the gap between usage and security.

How to proceed with generative AI adoption

To address these challenges, Zscaler makes several recommendations for business leaders:

• Implement a zero trust architecture to authorize approved apps and users
• Conduct thorough security risk assessments for new AI apps
• Establish comprehensive logging systems for AI interactions
• Enable zero trust-powered data loss prevention (DPL) measures specific to AI activities to prevent data exfiltration.

In summary, the research underlines the urgency for businesses to balance the potential of gen AI tools with effective security strategies to ensure safe usage of this emerging technology across every organization, regardless of its size.

Networking giant Cisco Systems Inc. reported good news/bad news numbers in its fiscal first-quarter 2024 results this week, handily beating expectations but lowering its outlook. Revenue and earnings for the quarter were $14.67 billion and $1.11 per share, respectively, compared wth Street expectations of $14.61 billion and $1.03 per share. However, Cisco’s outlook was lower than expected. The company sees full-year sales for 2024 between $53.8 billion and $55 billion, below its previous estimate of $57 billion to $58.2 billion. This dragged the stock as shares fell over 11% in after-hours trading. The numbers are the numbers, and though Cisco put up a strong beat, a lowered outlook always spooks investors. However, the numbers don’t always tell the full story. Here are five thoughts that dive deeper into Cisco’s quarter:

Slowdown caused by macro or airgap?

On the earnings call, Chief Executive Chuck Robbins (pictured) explained the airgap in sales is from customers pausing purchasing to deploy the products they have been buying over the past three quarters. During the Q&A, Amit Daryanani from Evercore asked Cisco management why they felt this was a temporary pause versus a larger macro issue. Robbins gave several solid proof points explaining why the company felt this way. One of the more interesting ones is that Cisco’s shift to a software business brings better visibility. He cited that historically when customers buy Meraki equipment, there is typically a one- to two-quarter delay in activating the products. Another supporting data point is that Cisco saw an uptick in its transactional advanced services, which include implementation services. This indicates that customers are looking for Cisco to help them deploy previously purchased products. It’s worth noting that an implementation pause is consistent with my research. Customers and channel partners have told me that the availability of products following a long period of supply chain issues caused customers to overpurchase to ensure they have the products even if they don’t need them at this very moment.

Has security turned the corner?

Historically, security dominance has been to Cisco as Moby Dick has been to Captain Ahab. Cisco is, by far, the world’s most dominant network vendor and many security products are attached to the network. Also, recent trends, such as XDR and SSE, heavily depend on the network. With these being true, why has Cisco never dominated the security industry? I don’t think any vendor will achieve the same level of security share as Cisco in networking, but Cisco’s goal has been to become the de facto standard. I do want to be clear that Cisco hasn’t failed in security. The company currently does about $1 billion revenue per quarter in security, so 95% of security vendors would love to have Cisco’s “problem.” However, $4 billion of the $70 billion-plus security market is not Cisco’s definition of success. During the call, Robbins mentioned several times the company is expecting security to continue to grow and take share. He stated, “We expect meaningful positive results in the coming quarters.” This begs the question, why are Robbins and the team so bullish? The answer lies in the company’s new platform strategy. At its recent Partner Summit event, Cisco took the covers off its three new security clouds, which bring together technology from multiple security products to simplify deployment while increasing efficacy. At Partner Summit, I talked to Chris Konrad, area vice president for global cyber for World Wide Technology, and he told me, “Cisco has always had good products, but they were a collection of best-of-breed products. This negated any kind of platform advantage. Introducing the security suites allows us to take an outcome-based approach to give customers the right technology versus sifting through many options.” It’s worth noting the new security strategy was put in place by several key hires, including Executive Vice President Jeetu Patel, Senior Vice President and General Manager Tom Gillis and SVP and Chief Product Officer Raj Chopra, all of whom were highly respected executives in their previous companies.

What will the impact of Splunk be?

Earlier this year, Cisco announced its intent to acquire Splunk. Since then, I’ve barely gone a day without someone asking me about the impact of Splunk. Some think it will boost Cisco’s security business, while others like the tie to full stack observability, and others like the impact on networking. The reality is they’re all true. All of Cisco’s product areas are evolving to be AI-driven, which takes lots of data, and Splunk will give Cisco buckets of it. One of the underappreciated aspects of the Splunk deal is the impact on Cisco CX, the company’s services organization. At Partner Summit, I met with CX leadership, and they told me that the group consumes more Splunk data than any other at Cisco. The ability to see and analyze more data enables Cisco CX to understand better technology utilization, which maps directly to business outcomes. I do think Splunk was expensive, but I also think, if an acquisition is a good one, the acquiring vendor can’t overpay, and this is a good one as I expect Splunk data to be used across the company.

Is collaboration on the rise?

Since the pandemic, the collaboration business at Cisco has been lumpy, with a few good quarters but more where the business declined year-over-year. This quarter, collaboration posted a 3% gain, a positive sign. Like security, collaboration has been the victim of good products lacking strategy. but the leadership has spent the better part of the last three years rebuilding Webex to be cloud-native, infusing artificial intelligence and launching its cloud contact center offering. Now, the product is ready to go, and Cisco has many unique innovations coming, such as an AI-based codec that can deliver high-definition audio and video with up to 90% packet loss. Also, its willingness to partner with Microsoft Teams versus fighting it, seems to be adding to the collaboration tailwinds. I heard that the company closed many large deals at its recent WebexOne event, so growth may become the norm versus the exception.

Is Cisco finally firing on all cylinders?

One of the more interesting aspects of this quarter is that all the product areas showed year-over-year growth. Chief Financial Officer Scott Herren showed a slide where networking was up 10%, security 4%, collaboration 3%, Observability 21%, and Services was up 4%. This is meaningful, since I don’t remember when all product areas grew year-over-year. Historically, I’ve described Cisco as an eight-cylinder car with one cylinder that’s misfiring. Now, it appears all of them are firing. Webex has been retooled, the security suites and SiliconOne has been growing networking, and Splunk is on the horizon. I believe the one- to two-quarter slowdown is what management says it is – a period of time customers need to digest products. After that, I am expecting Cisco to hit the accelerator because it will have given time for the security and collaboration strategies to kick into the channel to complement a strong networking business.

The onslaught of press, research and perceived urgency has done little to prepare business and information technology leaders to deploy artificial intelligence-powered technologies. That’s according to the first Cisco AI Readiness Index, issued Tuesday. The company used a double-blind survey of over 8,000 business and IT leaders worldwide. The findings are alarming. Although 97% of the organizations say that the urgency around deploying AI tech has risen in the last six months, only 14% feel they’re prepared to deploy and utilize it. Liz Centoni, Cisco’s executive vice president and general manager of applications and chief strategy officer, noted that organizations are under intense pressure to execute and capitalize on the potential of AI. “To realize the benefit of AI-powered products and services,” she said, “companies need solutions that secure and observe their AI models and toolchains to ensure performance, secure sensitive data and systems, and deliver trustworthy and responsible AI outcomes.” This is consistent with my conversations with business and IT leaders. Since the launch of OpenAI LP’s ChatGPT, AI has hit the business world like Thor’s hammer and created intense pressure to embrace and leverage AI. One chief information officer of a major retailer told me that his leadership believes that if they are late to adopt AI, they will fall behind quickly and struggle to catch up, and that has created an unprecedented sense of urgency around AI. The risk, though, is that if AI is done wrong, it can create negative experiences. It was good to see Cisco try and quantify the gap between what companies want and how ready they are. Here are some of the key findings:

• Businesses are feeling the heat: 61% say they have just a year to implement their AI strategy before facing negative impact.
• But they have a strategy: 95% of organizations say they have a well-defined AI strategy or are developing one.
• Networks are lagging: Only 17% of organizations have flexible networks that can handle the complexity of AI.
• Data is not ready: Data underlies AI operations, and 81% of those surveyed say they face siloed or fragmented data in their organization.
• Talent is lacking: Although boards and leadership embrace AI (82% of both groups show high or moderate interest), 22% of middle managers have either limited or no receptiveness to AI. In addition, 31% of organizations say their employees resist or unwilling to embrace AI. And although 90% of organizations say they have invested in training, 29% are worried about finding the right talent.
• Governance is off to a slow start: Cisco says that 76% of organizations don’t have broad AI policies — a must for wide acceptance and use of AI-based tools.
• Culture is a challenge: The C-suite is receptive to the changes AI will usher in. Cisco believes they must lead planning and communication to bring along lower and middle management, who are skeptical. Although there is skepticism, 79% say their organization is embracing AI with a moderate to high level of urgency.

Initially, I thought the headline number of 14% feeling prepared was low. But, in reality, it could be much lower. AI has been brewing for years, but it has always felt a bit nebulous, or like something that was lurking in an amorphous future. The rise of ChatGPT and generative AI has changed that equation. It’s no longer some science fiction story. It’s a reality on the immediate horizon. Cisco’s AI Readiness Index is a great wakeup call. AI is a potent tool. But, as with any kind of technology shift, change can be tricky. Like the rise of e-commerce and the web, AI must be embraced organization-wide. Boards and leadership teams must make it an imperative for middle and lower managers. Leaders and managers must support change management programs that can bring frontline employees along. The faster they embrace AI, the quicker the organization benefits. It will be interesting to track this data over time. AI is inevitable. I would bet that the acceptance will be way up next year, by hook or by crook.

Intelligent spaces technology provides important data points that can make a significant difference in the work environment for all employees—and keep them wanting to return to the office.

Cisco recently held its WebexOne event. One of the aspects of events like this that I like is the opportunity to hear from customers about how they are using technology to transform their organization. At the event, Vivek Menon, director of product management for Cisco Spaces (formerly known as DNA Spaces), and Chris Palermo, Cisco’s global collaboration specialist, conducted a fireside chat with Alex Pop, senior vice president of voice and video collaboration at M&T Bank, to discuss how to build intelligent spaces for hybrid work. Hybrid work is a reality. My research shows that 75% of workers will work from home at least one day a week. At WebexOne, Cisco cited research that, moving forward, 98% of meetings will have at least one remote participant. Businesses have embraced hybrid work as it offers many benefits, including flexibility, cost savings, and employee satisfaction. But there are challenges, such as security and the efficiency of the buildings, but the physical spaces need to adapt to how people work today. Vivek Menon started by talking about a massive market inflection point. “We all call it different things,” he said. “Some of us call it ‘hybrid work.’ Some of us call it ‘return to work.’ I think one of the things that we can all agree on is how we work has changed forever since the pandemic.” Menon said that many stakeholders in workplaces, including IT, real estate, and facility teams, worry about tech, space utilization, and leases. And, of course, there are employees who, in Cisco parlance, want the office to be a magnet and not a mandate.

Enabling intelligent spaces

Cisco Spaces is a cloud-based location services platform that provides contextual information for a location. Sensors are the key to making Cisco Spaces work, with the ability to track a number of key statistics, including building and floor occupancy, the number of people in a room at any time, along with air quality, ambient noise, temperature, and humidity. Chris Palermo of Cisco’s collaboration organization then spoke about how Cisco uses Spaces. “The challenge is with a hybrid office; you have to figure out how much open space I need versus closed door?” Palermo said. “How much ad-hoc versus reservable? What’s the balance of hot desk versus huddle room versus touchdown room versus innovation? How do you judge all the different types of use cases?” Palermo said that most companies still measure office performance using badge data, which leaves a lot out. “So, what do you do?” he asked. “In New York at Penn One, we capture over 5,000 data points at any moment. And those data points are what we’re using to help us figure out the assumptions we made around hybrid work, around all the different allocations and open space versus closed door.” From those data points, Cisco can figure out what’s working and what’s not working—with the aid of the collaboration devices throughout the office that have IoT sensors built-in.

Intelligent spaces technology in action

Alex Pop of M&T Bank joined the discussion to share how M&T, with about 22,000 employees and a thousand branches across 11 states, has stayed true to its roots as a community bank. Pop described how the bank’s tech hub, at Seneca One, in Buffalo, New York, occupies 12 stories in the building. “We could have easily taken the whole building,” he said. “But intentionally, we want to create an ecosystem to invite new tech companies and startups to be a part of the innovation for a great city.” Pop then shared M&T’s journey. “We had telephony on Cisco, and that naturally evolved us towards Webex,” he said. “And now we are migrating much of our telephony to Cisco voice on multi-tenant. At the end of July, we implemented Slido, which was a great success. It fit our company culture, and we adopted the whole line of Cisco headsets.” The outcomes have been a revelation for M&T. For example, what to do about “ghosted rooms”—ones that look booked in Outlook but are unused. “That’s a challenge when we only have a few hundred rooms, but you have a thousand-plus people in the space,” he said. “So, first of all, we enabled a Cisco macro to go and say, ‘If you’re not there within a certain amount of time, we’re going to release the room for the next occupant.’ It was a great insight. The other one: we realized that there is a much bigger need for ‘we’ spaces versus ‘me’ spaces.” Based on Pol's data from Cisco Spaces, M&T converted an entire floor into “we” spaces. They eliminated all the desks and standup tables on the 14th floor in Seneca One and placed about 20 video-enabled flexible, agile spaces that make that space much more usable. “I truly believe that we are revolutionizing how the workforce looks at the workspace,” he said. “We are also deploying Webex Connect and eager to work with the Cisco Cinematics for larger spaces.” Palermo said that he and Pol were chatting the previous day. “You shared a quote with me yesterday saying how Cisco spaces for M&T Bank used to be a nice-to-have.” Pol interjected: “Now it’s a need-to-have.” This case study is a lesson for anyone talking about marketing tech. It isn’t about the gee-whiz factor. It’s about the problems you solve. And, in the case of Cisco Spaces, it’s not just about being able to meet and see each other—in person or remotely. It’s about gleaning important data points that can make a significant difference in the work environment for all employees—and keep them wanting to return to the office. M&T is on the cutting edge of future workspaces, but you need a control point, like Cisco Spaces, to make it a reality.

High-performance network leader Arista Networks Inc. announced today that it’s partnering with cloud security pioneer Zscaler Inc. to enhance network security for businesses by integrating its cloud networking solutions with Zscaler’s Zero Trust Exchange platform. The coming together of these two best-of-breed companies will offer enterprises a practical way to improve their defense against a growing number of cyberthreats without overhauling existing infrastructure. The current state of network security is overly permissive, allowing virtually unrestricted communication between devices on the assumption that they’re trusted because they’re “inside.” This is because internet protocol-based networks were built on the premise that everything should be able to talk to every other thing on that network. It’s why the internet is so fast, but it also means that the bad guys have unfettered access to all systems once a business is breached. Conversely, zero trust is founded on the premise that any node on the network cannot connect with any other without being expressly allowed. Trust is never assumed, whether an entity operates within or outside an organization. Every attempt to gain access must be authenticated, authorized and validated. This methodology is not just a trend but an industry response to the need for robust security at a time when remote work has become the norm. Arista’s approach to zero trust aligns with guidelines provided by the U.S. Cybersecurity and Infrastructure Security Agency, which advocates for granular security controls. This translates into setting up safeguards around each critical digital asset, a concept known as microperimeter security. Arista sets up individual secure zones using switches at the network’s edge. Therefore, each part of the network is protected or separated without requiring multiple firewalls. “The idea is to take the perimeter as close to the asset as possible,” said Rudolph Araujo, senior director of marketing at Arista. “Traditionally, you would do this with a firewall. But how many firewalls can you really put up? We have a threat detection sensor built in. So, when we talk about the microperimeter capability, we have that implemented in the switch.” Arista has been building a suite of security tools, including CloudVision AGNI for secure network connectivity, Macro Segmentation Service or MSS for creating secure zones within the network, and Arista NDR for network detection and response. Now, through a partnership with Zscaler, Arista is taking a major leap forward in cyber, ensuring that access to the network is strictly controlled, regardless of where the access attempt originates. Cybersecurity incidents are on the rise. Ransomware attacks carried out through compromised systems are just one example, underscoring the urgency for innovative approaches that protect the network and control access. Arista’s approach leverages network switches to perform critical security functions necessary for zero trust. By implementing these functions within switches, organizations can enforce identity-driven policies. The integration between Arista and Zscaler is like a two-way communication channel for security information. Zscaler’s Zero Trust Exchange platform acts as a database and a security checkpoint in the cloud, keeping tabs on who and what is connecting to the network. When Arista’s network detection and response system finds something unusual, it sends that information to Zscaler. If Arista flags a device as potentially compromised, Zscaler can prevent it from accessing the internet through its security checkpoints. Arista uses application programming interfaces to send internet traffic to Zscaler. At the same time, Zscaler is sending back important data from its system to Arista. This means that the companies share information to protect networks from cyberthreats. The idea is to merge the data from the network with security insights, providing a complete view of the network’s activity. “That kind of protection spreads across the entire ecosystem for the customer. It’s the beginning of a ‘better together story’ for us. Our technologies are complementary because there’s little to no overlap here because we look at different parts of the spectrum,” said Araujo. The partnership also tackles the challenge of securing unclassified devices, such as the internet of things, by combining Zscaler’s cloud-based telemetry with Arista’s physical network presence. By extending zero-trust principles from the cloud into the network infrastructure, the companies are “closing the security loop” for enterprises, Araujo added. On a grander scale, the Arista-Zscaler partnership goes beyond their immediate solutions. Together, the companies plan to explore and potentially redefine how network infrastructure can bolster security measures, even in scenarios where conventional methods fall short, such as securing legacy systems that don’t support current security protocols.

Extreme Networks Tuesday introduced a cloud-based universal zero-trust network access or ZTNA solution that will provide remote access, network access control, ZTNA and mobile device management integration in one software-as-a-service offering.

Andy Leong, vice president of product marketing at Extreme, shared details about Extreme Cloud Universal ZTNA at the company’s investor day Tuesday. “This is an easy, complete network access solution that delivers a frictionless user experience consistent whether a user is accessing applications remotely or on the campus,” he told me. “And there’s consistent security policy across our access points, switch fabric, network fabric and software-defined wide-area networks.”

Accessing company resources can often confuse end users as different scenarios require different technologies. As an example, a virtual private network might be required for home access, where network access control or NAC is used to authenticate users when they are in the office. Each system is typically managed independently, creating an inconsistent experience and difficulty in troubleshooting.

Extreme says it will offer the new solution in early 2024 as a subscription service for ExtremeCloud customers, with the hope that it will reduce the costs and complexity of enterprise networking. “This is a three-legged solution,” Leong told me. “It’s cloud ZTNA, it’s cloud NAC, it’s also access point and switch security. That’s all managed from the cloud.”

He added that the solution is already in trials. “We’ve got some really large institutions already using this, including higher ed institutions, and it’s going to go GA in January,” he said.

Extreme says there are three key benefits of its universal ZTNA, including:

• The ability to improve security across an organization: The solution simplifies creating and managing consistent zero-trust security policies across a network. This removes the user as the integration point for access technologies.
• A cheaper and more efficient solution: Extreme will offer Universal ZTNA as a subscription within its ExtremeCloud product, priced on the number of users across a network.
• No more jumping between point solutions to manage things: Information technology teams can use the single Universal ZTNA solution to manage user network and application access regardless of the user’s location. It can also manage guest and IoT device access.

Universal ZTNA comes with a 90-day free trial. “And the way it works is per identity,” Leong said. “So each identity could support five devices, whether networking devices or headless IoT devices, it’s going to be the same, and we’re going to flesh that out as we get more adoption in the market.”

Leong put the announcement in perspective. “As we build out the capabilities, as we stitch it together with our SD-WAN, it becomes more of a compelling sell to the SecOps teams,” he said. “If you have a security team that says, ‘OK, I’ve bought Prisma, Perimeter 81 or whoever,’ the NetOps person will say, ‘Well, can your cloud ZTNA do all these other things on-prem? Does it coordinate policy? Does it work with your SD-WAN? How does it tie with your network fabric?’”

Leong thinks the answer will be a resounding “No.” He added: “If you think about buyer audience — land and expand — first we go after the network buyer, and over time we get into a hybrid network buyer’s security buyer profile. As we build out Secure Services Edge and Secure Access Service Edge capabilities, this will appeal much more to a pure play SecOps audience.”

This is an important initiative for Extreme to continue to grow. It has never had much appeal with security buyers, but this gives the company a viable product to bridge the gap. The trend of convergence of the network and security has been widely discussed as an industry topic, and one could assume Extreme is late to market.

The reality is the security industry remains highly fragmented and has no de facto standard leader. Although Extreme is playing from behind in security, it does have a large network installed base, which has been growing over the past several years, and that gives it a springboard to launch its security services.

Cisco announced new initiatives to help its partner community succeed.

Cisco is holding its annual Partner Summit this week in Miami. At the event, Cisco rolled out several new tools and enhancements to existing products, services, and programs. One of the significant announcements is the overhaul of the Partner Incentive Program, which represents the most substantial change in over a decade.

Partner Simplification a Key Initiative for Cisco

Cisco has simplified and combined current incentives into a single Cisco Partner Incentive. Implemented in a phased approach, the new incentive is expected to roll out in the second half of 2024. It will align with Cisco’s shift toward software and services, providing partners with rebates that encourage and reward business growth, according to Jason W. Gallo, Vice President of Global Partner GTM Acceleration at Cisco. Cisco relies heavily on its partner community to drive its business. During his keynote, Cisco EVP and Chief Customer and Partner Officer Jeff Sharritts mentioned that 92% of the company’s business currently flows through partners. While partners are generally positive about Cisco, some partners have stated that the incentive programs can often be confusing due to the multiple facets of the program. Cisco has been committed to streamlining incentives, making it easier for partners to understand how they are compensated, and this week’s announcements are part of the simplification of the partner experience.

One Incentive Plan to Rule Them All

The Partner Incentive will feature three main components:

• Rebates for one-time sales deals.
• Incentives for recurring business.
• Bonuses for delivering customer value, such as driving solution adoption and increasing subscription volumes.

Partners will receive rebates linked to the total value of their sales contracts, activities related to customer engagement, and any growth in yearly subscription revenue. They can also earn extra rewards for investing in their partnership with Cisco and selling its solutions.

PXP Portal Gets a Dose of AI

Furthermore, Cisco is expanding the Partner Experience Platform (PXP), a customized portal for partners. The PXP now includes artificial intelligence and machine learning capabilities that offer insights to help partners identify growth opportunities. Cisco updated the platform with a new dashboard that gives partners a complete overview of their financial engagements and investments. A new Growth Finder module provides insights into a company’s customer base and shows opportunities for refreshes, renewals, and new prospects.

Partners Access to Sustainability Tools

Alongside these enhancements, Cisco is introducing a Sustainability Estimator tool, set to launch later this month. The tool will help partners evaluate potential energy savings, emission reductions, cost savings, and the overall environmental benefits that can be achieved by updating their IT infrastructure. The tool will include a Sustainability Partner Journey, which is a collection of resources designed to assist partners in developing their sustainability initiatives. “The Sustainability Estimator that we’re making available to our partners has inputs from the International Energy Agency (IEA), so it allows you to precisely pinpoint energy changes and carbon footprint impact as a part of the tool. We use the standards that convert energy consumption changes into carbon footprint,” said Gallo, during a briefing with analysts.

Managed Services: Simplifying Customer Deployments

Managed services providers (MSPs) are also getting a boost from Cisco with the launch of Partner Advanced Support. This new offering gives MSPs additional options and better support to avoid service disruptions and resolve issues more quickly through expedited access to Cisco’s Technical Assistance Center (TAC). TAC provides 24/7 global access to experts offering assistance and troubleshooting for Cisco products. Furthermore, Cisco is launching Managed Extended Detection and Response (XDR) and Managed Firewall services, broadening the security solutions available to MSPs. Such services offer organizations an integrated approach to cybersecurity, where monitoring and defense are consolidated across networks, endpoints, and the cloud. Around-the-clock surveillance eliminates blind spots that isolated security solutions might miss. This is especially valuable for companies that need more resources to house a specialized security team. “For those looking to expand their perimeter security, these offers will have multi-tenancy and multi-instance scalability. The enriched capabilities will complement our security portfolio with guided service creation, attractive pricing, and multiple incentives to enhance the partners’ profitability in this space,” said Gallo. Managed service providers have been a growing part of Cisco’s partner base. Infrastructure continues to grow in complexity and is so challenging that many organizations are choosing to offload operations to MSPs. This can lead to faster deployment times and more consistent operations as the MSP takes on the challenge of managing the complexity, enabling the customer to realize faster time to value. Cisco is implementing new Solution Specializations to support further partners, including Internet of Things (IoT) and small and medium business (SMB) categories. The SMB Specialization has been refreshed to focus on solutions that include Smart SMB, Hybrid SMB, Secure SMB, and Remote SMB. Cisco plans to introduce two new IoT Solution Specializations in the first half of 2024, addressing both industrial and non-industrial IoT markets. These changes aim to align partner specializations more closely with Cisco’s overall strategy.

Bottom Line: Supporting the Partner Network

The initiatives announced at the summit underscore Cisco’s focus on fostering a supportive and profitable environment for its partners, with a clear emphasis on growth, differentiation, and sustainability. During all the keynotes, every executive, including CEO Chuck Robbins, reiterated the importance of partners in Cisco’s ability to scale and deliver their solutions to customers faster.

The company’s restructuring have not affected its customer base strength