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Cisco Partner Summit 2015: Chambers - Internet of Everything will change business forever

Allan Swann | April 29, 2015
Cisco CEO lays out IoE vision, who will win, who will fail, and how partners can get on board.

Chambers is picking the next 10 years to be a period of "explosive growth" not seen since the 90s glory days of the internet.

"This new digital age will be five to ten times the impact of the internet today," he said.

"$19 trillion dollars was what we estimated last year over 10 years. That's the entire US economy plus some. That's now considered a conservative number.

"McKinsey said the other day we were off by at least 2 to 4 fold. And that's just via profits and cost avoidance, not the actual investment these companies will make."

Cisco estimates that the public sector will account for $4.9 trillion, retail $1.5 trillion, manufacturing $3.9 trillion, education $0.9 trillion, telecommunications and information $1.3 trillion, energy and mining $0.8 trillion, financial services $1.3 trillion, and healthcare $1.1 trillion.

Cisco itself had to make some tough changes to build the agility required to compete, streamlining the company to suit its new vision — one based on solutions based outcomes, rather than simple product sales.

The engineering team was cut from 28,000 to 23,000 globally. In two months, 24 of the company's top 92 engineering leaders were cut. The sales organisation similarly had to slim down its client interfacing sales team by 21 per cent.

"We restructed around outcomes. We reorganised to move horizontally with a speed we havent been able to do before.

"It allowed us to win big deals at a pace we've never done before. Outcome based selling also meant the deals went up in size. We had to make the changes now, before our peers did.

"Over the last four plus years, weve grown our revenue by $4.9 billion, and our expenses by 300 million. Thats 6c on the dollar. That is world class. Really good is 30-50c on the dollar. We've got our IT expenses down 5 per cent on the year."

But IoT is a double edged sword, Chambers claims 38 per cent of the advantages will be from analytics. But security remains an issue, and the company is focusing on its network architecture, especially in the new IoE age, to help combat security risks. It also believes that unified standards will help.

"Security can do more brand damage with one violation, than almost anything that has ever happened before," he said.

"92% of apps used by employees have major privacy and security issues. once a company is broken into, most of the data the thieves are after is gone in less than 12 hours."

Chambers believes that the scale of his company's ambition now matches nation states, not just companies or cities. Cisco recently signed a partnership with France to digitise the country — a French first with a corporate.

 

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