This week Cisco is holding its annual user conference, Cisco Live, in San Diego. The 2015 edition of Live is unlike any other, as this will be the last time John Chambers will deliver the keynote as CEO of the company. In a little over a month, Chambers will transition to an advisory role as Executive Chairman of the board. So while customers, partners, and others involved in Cisco's ecosystem will likely continue to interact with him, the transition to Chuck Robbins is well underway and will be complete come the end of July.
The theme of Chambers' keynote was the topic of digital transformation and why it is important for businesses to think differently and run IT differently. The impact of digitization is already being felt, as relatively young companies such as Uber, Airbnb, Square, and others are disrupting traditional businesses faster than we've ever seen before. These are natively digital organizations and they're able to move with a level of agility and speed that's not really ever been seen before.
As CEO, Chambers has guided his company and many of Cisco's customers through other transitions in the past. This includes the rise of the Internet into a business resource, the shift to voice over IP, the growth of wireless networks, and the evolution of the data center.
However, with this keynote there was a fair amount of urgency in Chambers's tone, as he almost implored the audience to take digital transformation seriously right now. He warned that most businesses will fall into two camps in a relatively short period of time: those that disrupt and thrive, and those that are disrupted and quickly become irrelevant.
To help its customers make this shift, Cisco aligned its product and go-to-market strategy with the needs of digital businesses. Intercloud, FastIT, Spark, ACI, security, mobile engagement, and other initiatives are all designed to enable businesses to be more agile and execute on decisions faster. Unlike most of Cisco's peers, though, the company is trying to enable its customers to implement these technologies at an architectural level and have the Cisco infrastructure be the foundation for digitization.
In an era when the need for speed is critical but IT is becoming increasingly complex, the ability to deliver solutions at that architectural level should create a distinct competitive advantage for Cisco. The initiatives I listed above promise to enable customers to make this shift, but dramatically simplify the technology that powers the business.
I thought an important note that Chambers actually didn't discuss in his keynote was how open Cisco has become. Over the years Cisco has taken a fair amount of criticism for being closed and proprietary. Some of the chatter wasn't warranted, but a fair amount of it certainly was. A switch flipped over the past few years and almost everything Cisco does now is built on the concept of openness and ecosystem delivery. Why the change in strategy? I think it's based on the "disrupt or be disrupted statement." If Cisco is indeed to become a digital organization, it needs to move faster and be more agile, and that's easier to do with open platforms versus closed, proprietary ones.
For example, the technology partner list for ACI is a who's-who of the data center world, including technology partners such as EMC, F5, NetApp, Microsoft, and even mortal enemy VMware. Another example is that Cisco recently announced Microsoft Azure interoperability with Intercloud, and Cisco's acquisition of Piston Cloud opens the doors to collaboration with any OpenStack cloud provider.
Another point made during the keynote – and this may be more important than any technology discussion – is that the operational structure in most organizations isn't aligned with digitization. I get it, change is hard and uncomfortable, but it's also necessary. Darwin said that the key to survival isn't being the biggest or strongest, it's being the most adaptable to change. Remember those powerful mainframe people from 30 years ago who controlled IT? They're all gone because they wouldn't change. How about all of those voice engineers from 15 years ago? They're also gone because they wouldn't change.
So, as you embark down the journey to digital transformation, consider how the IT department should be structured for what IT will look like in five years, not the way it runs today. We're about to go through a period of unprecedented change, and so I'll end the blog the way John Chambers finished his keynote. Change is coming, but are you ready?
I'd like to add a final personal note to this. I've been covering Cisco as an analyst now for 15 years and prior to that I was at a Cisco reseller and was a customer of the company. In that time I've seen so many tech companies come and go, including many giants such as Lucent and Nortel. Cisco's ability to continually look around the corner and predict what's next and then capitalize on it will be a big part of the legacy that Chambers leaves behind. I know I'm not alone in the fond memories I share regarding the Chambers-led Cisco, as he received three standing ovations during his keynote. Well-deserved, and thanks for the memories.