UCStrategies Experts Discuss Cisco Announcements and Cisco Cius

Transcript for UCStrategies Experts Discuss Cisco Announcements and Cisco Cius

Jim Burton: Welcome to UCStrategies Industry Buzz. This is Jim Burton, and I’m here with the UCStrategies Expert Team as usual and today’s conversation is going to be about Cisco. Cisco continues to add a lot of products to its portfolio. Blair Pleasant was at their conference last week and she’ll start us off and give us an update.

Blair Pleasant: Thanks, Jim. Yes, I was at the Cisco C-Scape which was held in conjunction with their user conference, “Cisco Live,” and it was a very impressive conference. We spent two days getting a lot of information about what Cisco is doing. The two main things that really came across loud and clear was video and the cloud. John Chambers said several times that “video is the new voice,” so they’re really, really focused on video. And we heard a couple times, Marthin De Beer mention that “we’ll see every device of meaning will support video.” And he talked during a roundtable that Cisco will not build a product that doesn’t support video and that everything coming out will support video. Someone else mentioned division is video as a first choice and voice as a fallback, which I thought was kind of interesting.

The second theme as I said was about the cloud. There were a lot of discussions about the importance of the cloud but Cisco is doing this, and it’s not so different from the way some other vendors like Mitel are doing this; they are looking at it that they’ll be providing three different types of solutions: a premise-based, a cloud-based, and a hybrid. So it will really give more options for customers and reseller partners so depending on what’s right for the customer, they’ll be able to have a choice of which model to go with.

The other big news that most people know about is the announcement of Cius as the next generation collaboration tablet. It has HD video support and can interoperate with telepresence. I think a lot of people have been writing about how Cius is really the next IPad or it’s competing with the IPad-and I think that’s really not what Cius is focused on and Marty and some others are going to talk about that. Also, there was a lot of discussion about Cisco and its social software and I think Cisco is really doing a good job of showing thought leadership in the social software area. Until now, IBM was really the enterprise leader, in my opinion, and Cisco is doing a good job of playing catch-up. They reiterated their focus on Quad, and Show and Share and Pulse. And I know some of the people in today’s call are also going to talk about that.

There was a lot of thought leadership, I thought, and thinking about things, not just for today, but where Cisco is going in the near future. I don’t think a lot of people are going to run out and start using Show and Share, but I think there’s a lot of potential for these areas and I think Cisco—they made a believer out of me, they really showed me that they’re on the right track in a lot of these areas.

Michael Finneran: I was following the Cius announcement very closely and I’m excited. Early on I was not a big believer in the tablet following the IPad but it’s the sort of thing once you play with it, it really is addictive. And I think we’re going to see something that’s really a completely new computing platform. The same way we have desktops, laptops and smartphones, tablets are going to be the next one on the list. Of course, one of the cute things about Cisco’s is it does have a cradle so you can actually sit it on your desk and use it as a desktop device then take it with you. Of course the model I see that is growing out clearly is the smartphone, and people have recommended the smartphone cradles in the past, but it doesn’t work,  because you leave too often without it. Something like a tablet is going to become like the laptop or the paper notebook that you can carry with you everywhere. So certainly, in verticals like health care, high end sales like car sales—tablet devices I think are going to become the standard thing we see somebody carrying, but also in general business as well.

Now whether Cisco’s successful with their particular version, the jury’s still out on that one. Will these tablet devices be proprietary or open, my guess is it’s no guess. It has to be an open device. The decision here is going to be made by the IT folks, and the IT folks, unlike traditional telecom folks, are not going for a proprietary device. So the model I think is really going to be the smartphone model and the dividing lines are going to be the operating systems. Users with an IPhone are going to be looking for something that’s an IPad. Cisco has taken the Android path so the Android smartphone user is likely going to wind up with an Android tablet device, which leaves a few open questions. If a user has a RIM smartphone, what are they going to wind up with? Or a Windows Mobile? Or is it going to be a place for Hewlett-Packard who now has made it clear that they intend to come up with a tablet based on the WebOS that they acquired with Palm. But like the smartphone, I think at the end of the day, users are still going to be asking for choice. There’s no one model in the smartphone area, nor do I think there will be one that fits in the tablet area that will address everyone’s requirements. So from the PBX perspective, they’d better be thinking in terms of smartphones and the range of these tablet devices that is an extension of the mobile universe they’re going to be supporting along with their product lines. Marty, I think you had something to add to this as well.

Marty Parker: Just to add to what Blair and Michael have said, I agree with the points that both of them have made, both that Cisco is certainly making some great progress and that their tablet is the new model. The thing that I’ve been emphasizing in some posts at UCStrategies.com, because this is a theme that we have at UCStrategies.com, is to really get serious about the use cases for this exciting new technology. For example, “video is the new voice” isn’t going to work with my business clients because it’s too expensive. Video is the filet mignon or even the foie gras of business communications. Its bandwidth is hundreds, maybe thousands of times higher than alternative means, like a voice call or even better, think about it—the bandwidth of an email or even less—of an IM. So if I can solve a problem with an instant message, why would I use video and that’s exactly what we see businesses doing because businesses are like water, they naturally seek the most efficient path. So I think that the video is a desire Cisco has because it will sell bandwidth and that’s what they make in their router business. But I don’t know that that’s the best way to go. And we really encourage businesses to stop and think about the use cases before you buy any unified communication technology. And use cases of course are a subset of a strategy and we didn’t call it UCStrategies for nothing, so I just encourage people to spend time on that and we’ll be writing more and we’ll be happy to work across the industry on that topic.

The Cius does consume quite a bit of bandwidth and it is a proprietary device. I’m really amazed that Cisco did not strike a partnership with Motorola or with Apple to bring this product to market. Now Cisco has to go through the whole process of getting that device certified on all the carrier networks, work that Apple has already done with the IPad and that Motorola already knows how to do in their sleep. So, you notice that while the Cius supports both wifi and 3g and 4g, they don’t have any carrier lined up yet and I know that’s a challenge.

The final comment I would like to make is on some of the other overreaching claims that I see in the Cisco story, and this is in the area of Quad. In an interview, Murali Sitaram, the leader of that team, was quoted as saying, “Quad is the first social network combining asynchronous communication…with more direct immediate communication tools.” And that’s absolutely not true. This has been going on for quite a while. WebEx Office, their own product, had this a year ago and have been able to integrate live communications into SharePoint and into Microsoft SharePoint and into IBM Quicker for about three or four years now. So I wish they wouldn’t make those claims that put the burden on the customer to figure out if they’re true or not. I admire Quad, I think it’s a great investment and I think it may have some uptake and I think the search functions in Show and Share are pretty interesting, but I’d just ask them to maybe have more balance in their claims.

Jon Arnold: Thanks Marty, and you know, I think we could all riff off of this Cisco Cius launch and all the things around it for a long time so I’ll just hit a couple high points. Like Marty, I’ve written about it as well. I posted this morning so I’ll steer anybody to the portals who wants to read a bit more about my take of Cius. One thing I did want to mention, building on what Blair was saying about this is not...too many comparisons to the IPad. One thing I noted that jumped out at me was this idea of having the camera capability on both sides, and that really, really takes a page out of Apple but more importantly I think it shows that this device can be used in a very wide range of applications to show, as I said, Show and Share and really broadens the scope of this--I’ll call it a gadget for lack of a better word. But I think this really more importantly, is yet another way that Cisco is trying to reinvent communications, reinvent technology and they’ve got a potential game changer here in the sense that I think communications experience can be broadened to new environments like the verticals that were referred to earlier that weren’t possible before, and I think that’s where it gets really interesting.

I think Cius could be just as successful as a consumer play to be quite honest, as an enterprise play, but for us here at UCS, I think there are two things I just want to point to. One is, as we’ve heard, this is a very video-centric device and everything they’re talking about is video. I don’t know about you guys out there but I can probably count on one hand the number of times I’ve heard words like voice, VoIP, PBX, IPBX, telephony; it just wasn’t in the conversation so to speak, and that really speaks volumes about where Cisco is going and the value they place on video as opposed to voice. So for us in the UC Business and for the Avayas and whoever’s left, Siemens, Mitels of the world, there’s a lot to think about here because if Cius can change the equation in the communications environment for whether it’s UC, or just straight video, telephony is getting further, further left behind in the conversation and I think that’s an important trend here. The fact of the matter is that Cisco is jumping into every market possible and they just keep doing it year after year after year. Picking up Tandberg, picking up Starent, all the partnerships with VMware, they talked about patents, they’ve talked about all the launches, they’ve talked about 400 new products in one year. I can’t think of any company who had that many new pieces out there.

So that’s one wake-up call and the other wake-up call is Microsoft. And we hear about this too, I know there’s this big Microsoft news today, but they’re increasingly not being part of these conversations and I think Cisco has a very strong strategy here to lead into this world without Microsoft, whether they like it or not. Partnering with Android, supporting Google with the Cius is another step in that direction...towards the cloud, away from software, and again I think Cisco is really trying to own this whole space. Whether they do or not is another story but that’s what keeps us all employed as consultants, right? So let me pass on from here.

Nancy Jamison: Oh, pass it on to me—this is Nancy. I went to Cisco Live C-Scape and also, Blair and I both went to Contact Center Day. To follow up what John was saying, we got a deep dive for an entire day on voice and on the contact center, and we left with the impression that they’re not leaving voice out of the conversation at all. I mean I love the fact that video is everywhere because you have to do that development so that when customers are ready and do have the money, then they can have it. But what was clear from the Contact Center Day is that what they’ve done is they’ve brought Contact Center up to par with all the other divisions or business groups within Cisco. So they’ve changed a lot of things, they’ve hired a lot of people, they have inner dependencies and boards and customer panels and all sorts of other groups that tie Contact Center in with everything else that’s being done at Cisco.

They went to an agile development environment so they have releases every two weeks and that really made me happy because now they’re very, very quick at getting not only the new stuff incorporated into their contact center and voice portal offerings, but they can bring along the old stuff. And that was something that struck me, when you guys all talk about them being out front and bringing in new stuff, and trying to be thought leaders and trying to push video everywhere, that’s one thing. But what was happening at the same time is they’ve now gone back and brought up-to-speed their older products that we, when they first acquired GeoTel, when they got into the contact centers back in ‘99, we all looked at them cross-eyed—what are they doing, why are they getting into voice? Well, they haven’t forgotten the contact center; they’ve now brought a lot of those things that their competitors use against them, up to speed and for example, lots of features that people would pick on them for and the fact that it took too many boxes to implement a contact center, so they’ve gone to a virtual environment now. Their competitors are going to have a lot less reason to stamp on them—lowering the cost, and also weaving Contact Center in with these new developments, being able to use video, being able to use Show and Share and Pulse, and Quad, and products like that. So I was actually really impressed.

Blair Pleasant: Building on what you said, Nancy, they were talking a lot about all this great Web 2.0 stuff that they’re doing, but then they said that they’re really focusing just 30% of their resources on the Web 2.0 stuff, and 70% is being focused on their core call center or customer collaboration products. Like you said, virtualization, agent greeting and whisper, scaling the product; so they really are doing a good job of bringing their core contact center solutions up to par so they really are more competitive now, with an eye to thought leadership for some of the future stuff, so they’re really doing a nice mix of those.

Nancy Jamison: I was really impressed with the way that they borrow from other groups. For example, they’re not recreating the wheel, even though they are doing development, they would pull from the group working on Pulse, or Quad or something else, so they don’t have to redo the development. I think it’s a really well thought out process, kind of confusing if you want to get an org chart out of them—good luck with that—but they do have it set up so that they get feedback across groups and borrow from groups and I think, because of their size, it’s really going to do well for them to keep that process going like that.

Blair Pleasant: But reiterating what Jon said, it is true at Cisco Live and C-Scape last week, we did hear very little about IP-PBX and Voice Over IP so to that point, I would definitely agree.

Marty Parker: If I could build on that point, Blair, the point Jon made I thought was very important. He talked about that in the context of UCStrategies and that’s exactly right. Voice is a declining part of our consulting engagements on unified communications as well because people want to—the client’s enterprises that we work with—want to know what is the right and best communication tool for this particular business process. And we’re finding, yes, some video content in our engagements, but we’re also finding increasing amounts of instant messaging in our engagements, so voice has, I think we’ve forecasted it here for about three or four years, becoming part of the blend. It’s not the platform for UC; it’s an element of unified communications.

Dave Michels: I think that the Cius is very interesting and intriguing and I’ve written extensively about the need for a new value proposition on end points, but one thing I haven’t really seen a lot in the coverage of this is the question of whether this thing is even real or not. I would love to see it be real, let me make that clear, but, I think there’s a fairly strong likelihood that we’ll never see it. Cisco doesn’t normally make announcements this far in advance; they’ve never done a cell phone, they’ve announced cell phones in the past. As was raised earlier, they’ve got to work from scratch on carrier arrangements.

As Marty wrote in one of his articles, their choice of Android is a bit unlike Cisco. I think it’s going to be interesting how they can keep it competitive against some of the consumer models once they open up an Android SDK. I think by the time this thing actually ships, the IPad will have a front-facing camera and probably a lot more of the features that we don’t know about yet. I think there’s a fairly reasonable likelihood that we’ll never see this thing. And if they were really interested in this, and they have this cooking, I’m kind of surprised they didn’t go grab Palm when it was recently sold to HP as it seemed to be for sale for quite some time. Maybe they had conversations, I don’t know, but Palm obviously has a lot of carrier agreements and a lot of cellular expertise and manufacturing in that realm. So I’m just surprised that I haven’t seen any discussions about whether this thing is real or not.

Jim Burton: That’s a very good point, Dave. There are a number of consumer products that get announced every year which are just testing the waters to see if there’s a market spot for it. That could certainly be the case here. But one of the things that I find interesting about Cisco and their approach to this is there is a lot of issues with security with the IPad. Something that I think enterprises would have a little bit of difficulty embracing broadly. Not to say that they won’t get those issues fixed, meaning Apple, but if you think about it, if Cisco can come out with some, I would assume that they’d have a lot of those issues taken care of right out of the gate.

Dave Michels: I think they’re going to have a challenge because they’re going to try to make it reasonably proprietary to fit into their mold and that’s going to raise their operating costs and won’t have the economies of scale and it’s going to be relatively speaking, very expensive—this is all speculation—compared to many of the computer devices that I expect to see on the market by the time this thing comes out.

Blair Pleasant: They’re saying that it’s going to be less than $1,000.

Dave Michels: They think it’s going to come out, too.

Marty Parker: That’s twice the price of an IPad.

Blair Pleasant: One thing that’s interesting about the Cius is that people at Cisco didn’t know about it; it’s a really well kept secret within Cisco. A lot of people didn’t even know about it until the day before the announcement or even when it was announced. So I don’t know if that’s in line with what Dave is saying or not, as far as it being real.

Dave Michels: I would say there’s at least a 50% chance if not higher that it won’t come out, but I love, as Jim just pointed out, testing the waters. The coverage it’s getting is phenomenal, I mean the only other phone that we’ve seen—enterprise class phone we’ve really seen launched this year is the Alcatel-Lucent; it hasn’t been launched yet, but it’s been announced. It didn’t get anywhere near this kind of coverage. If they’re testing the waters, they’re getting back some confirmation that there’s a lot of interest in this. We saw the IPad as probably the most successful consumer electronic device ever launched in history. I think the reaction to this is extremely positive in confirming that we need a new value prop in end points, I just would be a little surprised if Cisco is actually the one that delivers it.

Blair Pleasant: Okay Dave, this is Blair. Let’s publicly, on this podcast, make a bet. I say it will come out; you say it won’t.

Dave Michels: I say it won’t.

Blair Pleasant: We’ll figure out what to bet.

Dave Michels: I’d like it to but I don’t think it will.

Steve Leaden: I think that one of the elements that we can all bet on is that, true to John Chamber’s vision here of voice and data being sold now as one entity as part of a collaborative environment, I think is here to stay. And I really believe that he’s got the vision as he has had for some time for being a pace setter in the market and I think that’s definitely going to take place here. So with that, I think with all of these investments that they’re making at Tanberg and other entities for social networking, I think the lines are totally blurred now, with voice being the core component of a basic communication element and with that, although I think it’s going to take some time for this to get real and of course this is all based on price point, how it gets accepted into corporate and consumer markets, but on top of that, we’ll now definitely have to consider on a very large scale, bandwidth needs on the wide area network as well as out to the remote user sites. So bandwidth becomes even more critical and crucial and therefore as we’re going forward with these carrier contracts, three to five years out, let’s take a look at what the bandwidth needs are for both short term as well as having the flexibility to scale, especially in light of video growing exponentially.

Marty Parker: Well all the more reason, Steve, to do the uses cases because I’ve worked with companies that have tried to put video applications out in to say “field” environments where you get outside the metro areas, doing a service call in a suburban or even a semi-rural area and the coverage just disappears. So if you design a use case based on high bandwidth video, it isn’t going to work for the field people, so again, be really careful with the use cases and think about the situation. Not assuming you can buy unlimited bandwidth, because that’s not always the case, rather thinking about what’s justified and feasible.

Steve Leaden: Agreed, everything has to build around ROI. Absolutely.

Marty Parker: Well not just ROI but practicality of the technology event.

Steve Leaden: Agreed.

Jim Burton: Well I think we’re about out of time today. I want to thank everybody for participating and we’ll be talking to you all next week. Take care, everyone.