The Internet-of-Things (IoT) is no longer a trend – it’s here, with real life applications both in the consumer and enterprise space. The benefits on the enterprise side are significant, ranging from smart buildings that help reduce costs in the commercial real estate space to driverless trucks and connected devices that allow for monitoring of available resources and inventory; the applications are endless and traditional business models are being transformed.
With the increase in demand for IoT applications and rapidly expanding use cases, competition within this space is heating up. Amazon is in the mix on the consumer side with the Amazon Echo, and the AWS IoT platform for the enterprise side. Major communications companies (Verizon, AT&T, etc.) are clear competitors because of the infrastructure and bandwidth they already have in place. Cisco has led a strong campaign to be a key player from the beginning, and the approach has relied heavily on their core competency in networking.
Cisco furthered its commitment to IoT last week by announcing its intent to acquire application intelligence software company AppDynamics, Inc. by the end of 2017 for an estimated $3.7B—just days before the company planned to go public. The real value in IoT will be the software and services that can deliver data analytics and business value. Cisco’s strategic move serves as further proof that it is moving towards becoming a software-first company that helps its customers gain end to end visibility and intelligence from the network.
Applications Fueling IoT Growth
The number of software applications being utilized in the enterprise space is growing exponentially. It is critically important to keep those apps performing well. Because each app serves an individual purpose, it is a challenge for IT departments to manage the performance of these complex, distributed applications. In the past, network admins and IT staff typically had to monitor each application individually, and as a result there was a lack of data on the performance of the network as a whole.
AppDynamics’ platform provides a centralized view into the performance of multiple applications on premise and in the cloud. Aside from optimizing performance, a clear view of what is occurring within an organization’s network can provide real time business awareness into IT operations and business outcomes. As the market leader in enterprise networking, it is easy to see that AppDynamics is a key piece of the puzzle if Cisco wants to provide an end to end IoT solution.
An Abundance of Data
When one considers that the IoT market's install base is expected to grow from 15.4 billion devices in 2015 to 75.4 billion in 2025, the competitive advantage to be gained from managing, centralizing, and making sense of data shared across those applications becomes abundantly clear.
As the application ecosystem and demand for IoT continues to grow, the amount of data available to businesses increases. Each year more data than ever before is being captured, but few companies can effectively harness it to make better business decisions.
Cisco plans to use the AppDynamics acquisition to deliver actionable business insights and a clear understanding of the customer experience their clients are delivering. In turn, businesses will be able to act on real time data to make better decisions, shore up costly customer-experience gaps, develop and deliver new products and services, and improve business outcomes.'
Completing the IoT Portfolio
Cisco is aggressively pursuing acquisitions to fill out their portfolio of real-time business intelligence capabilities, looking to leverage software applications that enhance their already strong networking solutions. Recent software acquisitions will complement existing offerings and enable Cisco to help businesses gain access to real-time business metrics that can be used to fuel data-driven decision making.
The AppDynamics acquisition, along with a number of other software acquisitions over the past year, demonstrates Cisco’s commitment to delivering comprehensive solutions that drive business transformation.