Cisco Live was held last week in what has become my second home, Las Vegas. I had dubbed this the most important Cisco Live in the Chuck Robbins era, as the company is looking to put a stake in the artificial intelligence ground.
Simultaneously, Cisco Systems Inc. is integrating its Splunk acquisitions and reshaping the security business in real time. For most companies, doing one of these things would be all-encompassing, but these are not typical times. Chief Executive Robbins has promised stakeholders, which includes investors, customers, partners and employees, that Cisco would move faster, and it appears Cisco is doing just that.
The show was certainly filled with news – everything from security updates to the Splunk integration to Webex innovation and more, but it’s always good to look beyond the headlines. Here are my top takeaways from Cisco Live 2024:
Splunk will affect almost every part of Cisco’s business
To date, the integration between Cisco and Splunk has been directed at security and full-stack observability. At the event, Cisco announced it was deprecating its observability platform in favor of Splunk and had moved AppDynamics to that business unit. The security integration was being talked about at the RSA Conference, and the synergies have only gotten stronger since.
What had been missing was the tie into other parts of the Cisco business. During his portion of the keynote, Executive Vice President Jonathan Davidson alluded to Splunk-networking integration and then, in the analyst Q&A, followed up and reminded us that the deal only closed in March and there was an order for the company to integrate Splunk. He did confirm it’s coming soon, and it should be a strong differentiator for Cisco networking.
The other interesting integration point for Splunk is with Cisco CX (services), which has used Splunk data for years to help it manage customer environments. Cisco CX will play a key role in Cisco’s ability to deliver performant AI infrastructure, and the data from Splunk will be valuable in the analysis. While Cisco hasn’t talked much publicly about Cisco CX and Splunk, I expect this to be one of the integrations that creates the 1+1=3 value for this acquisition.
The AI story is coming together
AI has created a massive tailwind for much of the tech industry, but Cisco has yet to receive an “AI bump” in its stock price. This, despite Robbins explicitly referring to “line of sight” into more than a billion dollars in networking sales to support their customers’ AI initiatives. In actuality, Cisco provides more than networking and has a comprehensive infrastructure platform for AI. However, they had yet to show the complete picture.
At Cisco Live, Chief Strategy Officer Mark Patterson addressed the analysts and showed the Cisco “AI stack,” which included core infrastructure such as compute, networking and optics as well as security and observability for AI, services and more. It also highlighted the areas where Cisco partners. This includes data, models, other infrastructure, storage and more.
In reality, no vendor can deliver a complete, end-to-end AI stack alone. Cisco, like others, will do it with partners, and at Cisco Live, we got a good look at how it plans to do that. More to come in this area.
Security on the rise
At Cisco Live 2023, Cisco announced its security cloud. Since then, the company has stepped on the innovation gas. During his portion of the keynote, Executive Vice President Jeetu Patel stated that Cisco has delivered more security innovation in the past 12 months than it had in the past decade – and he’s not wrong, as most security products for Cisco were through acquisition. This includes firewall updates, Multicloud Defense, XDR, Secure Access and the recently announced Hypershield.
At Cisco Live, the company kept the security train going with Hypershield support for Advanced Micro Devices Inc.. DPUs, XDR integration with Meraki MX, a new firewall series and security cloud control. At the event, Cisco also brought its historical mortal enemy, Microsoft Corp., onstage to discuss the newly formed security partnership.
As an industry watcher, it’s good to see companies such as Microsoft and Cisco partnering because it’s better for the customer versus the two battling each other. This is something I’d love to see all security companies do. The bad guys share info, and so too should the defenders.
Product and innovation are no longer issues for Cisco Security. It hasn’t seen the crazy growth numbers that some of its peers have, but it has also been dealing with a legacy hardware stream in decline. That should be hitting a bottom now, and we should see that reflected in future quarters.
ThousandEyes a key element of Cisco differentiation
In August 2020, Cisco purchased a small Internet monitoring company called ThousandEyes. I had been tracking ThousandEyes since it was founded about a decade before, as it was the only way to see what was happening on the internet. During the keynotes, Davidson introduced the concept of the “global area network” where a business’s network is now comprised of everything from the device to the data center, which includes both owned and unowned infrastructure.
The challenge is: How does a network manager see what’s happening on the part of the network it doesn’t own? The answer is: ThousandEyes. Post-acquisition, I felt Cisco never took full advantage of the unique ThousandEyes asset. Over the last couple of years, the company has gotten ThousandEyes religion, and there is now integration with everything from Cisco video endpoints to AppD to the Meraki Dashboard. More ThousandEyes in more places gives Cisco a view into business networks that no one else has.
Cloud integration needs to be next
The “new” Cisco is less about hardware and more about clouds. It has clouds for observability, networking, security and Webex, allowing the company to innovate faster and more consistently. What’s needed next is for Cisco to create more cross-cloud solutions. We got a glimpse of it at Cisco Live 2024 with observability-security integration and security-network integration, but there’s more work to do here, particularly at the management layer.
During his presentation, Patel referred to the clouds as “loosely coupled,” which indicates the company is thinking of creating cross-cloud experiences. Years ago, Cisco feasted off the notion that “Cisco on Cisco” created almost magical experiences, giving the company a dominant share in so many markets. Somewhere over the past couple of decades, it lost that, but now has a chance of bringing that back with integrated cloud experiences.
Summary
Cisco Live 2024 was a positive step forward for the company. Its AI strategy is more transparent, the security business has been rebuilt and Splunk is integrated across the portfolio. AI will create a massive spending wave, which Cisco should participate in, given the key role it plays with so many large enterprises.
The event laid out the strategy, but now it’s time to execute. Robbins put Splunk CEO Gary Steele in the execution seat, and he has a solid pedigree to support the decision. Cisco’s fiscal year 2025 starts Aug. 1, and all eyes will now be on the growth rate.
