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As Cisco sacrifices 5,500 jobs, importance of IBM partnership heightens

James Henderson | Aug. 22, 2016
The layoffs will likely be tied to legacy hardware units, an analyst said

“For Cisco, the partnership adds a vital third component to its IoT system, bringing in a powerful centralised analytics engine to pair with its platform (Jasper) and connectivity plays,” he added.

In short, Filkins said the partnership ultimately strengthens Cisco’s classic revenue driver - edge routing - while complementing its IoT-based software, security and software revenue opportunities.

“This agreement allows Cisco and IBM to approach IoT with joint sales and go-to-market initiatives where it is most beneficial for both vendors,” he added.

“Because the companies have separate cost structures under this agreement, we expect IBM to pursue partnerships with additional vendors, such as Juniper, to spur IoT market growth.

“At the same time, Cisco will explore tighter integration with other central analytics vendors, such as Microsoft and GE.”

For Filkins, the new-look Cisco also views the migration to cloud infrastructure (network and datacentre) as a strategic opportunity to capture increased spending on analytics.

In June Cisco launched its Tetration Analytics, an on-premises vendor-agnostic appliance designed to simplify IT management.

As explained by Filkins, Tetration collects data using hardware and software sensors embedded in switches and virtual machines to ensure a comprehensive set of data across hybrid environments.

“Delivering a higher-level IT management platform leveraging analytics will enable Cisco to monetise its existing ICT install base, but advancing an on-premises appliance is risky as some customers may instead opt for a hosted solution with lower up-front costs,” he added.

“To drive adoption, Cisco will emphasise the business case consisting of Tetration’s ability to deliver insights leading to a more secure framework, lower operating expenses and drive positive return on investment.”


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