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Age Of Digitization, Age Of Disruption


February 3, 2015  


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San Jose, Calif. – The overhauling by Cisco Systems Inc. in late January of its cloud infrastructure strategy was part of a three-pronged approach the company is betting its entire existence on – the digitization of everything, simplification of computational processes and development of new IT models.

Speaking to a group of technology editors here in December, Blair Christie, the company’s chief marketing officer, said that there is so much disruption going on right now that the American Enterprise Institute expects 75% of the S&P 500 companies that were on the index three years ago to be replaced by new companies by 2027.

Digitization, said Rob Soderbery, Cisco’s senior vice president of enterprise product and solutions, is changing the world: “It disrupts and creates business value, but IT models need to evolve. Applications require new architectures.” The Jan. 28 announcement included a major expansion of the company’s cloud managed IT offering Meraki. Cisco acquired the San Francisco-based cloud infrastructure company in 2012 for US$1.2 billion and at the time its products were targeted at the mid-market segment. It is now available for large scale enterprise environments via:

New 802.11ac indoor and outdoor access points with integrated Bluetooth Beacons to enable location-aware applications.

Non-stop threat identification and accelerated mitigation through integration of Sourcefire technology.

New “mission-critical switch features” to address what Cisco called evolving customer needs around redundancy, high reliability and campus connectivity.

In order to drive what it called the “the advancement of digital business,” the company also announced the general availability of Cisco One, a portfolio of software that contains IT automation, open APIs for application developments and “flexible” licensing agreements.

“The advent of cloud services has opened up options for organizations in purchasing, consuming and managing IT including networking,” said Zeus Kerravala, founder and principal analyst at ZK Research. “People require flexible consumption models – enabling services on demand and greater IT services reach. Software is paramount – giving customers the ability to go-to-market faster, make changes quickly and harness the analytics and intelligence from their IT infrastructure.”

In a blog posted on the day Cisco released results of a study entitled Attaining IoT Value: How To Move From Connecting Things To Capturing Insights, Christie wrote that the sheer size, variety and speed of data traversing today’s networks are increasing exponentially.

“This highly distributed data is generated by a wide range of cloud and enterprise applications, Web sites, social media, computers, smartphones, sensors, cameras and much more – all coming in different formats and protocols.

“Whether it is in the cloud or at the edge, data generated by the Internet of Everything (IOE) must be analyzed to identify actionable insights that used to create better out. Without this critical step, data remains just data.”

The “blind” global survey was conducted to learn more about how organizations are “harnessing IoT to transform their business and what they can do to drive more value.”

The 1,230 survey respondents represented 16 countries including Canada and came from seven industries – manufacturing, public sector, transportation, retail, oil and gas, utilities, metals and mining. When asked which area (people, process, data or things) they needed to improve most to make effective use of IoT products and services, 40% indicated data, while process ranked second with 27%. People, the survey noted, placed third (20%) and things finished last with 13%.

“These leaders understand that connecting “things” is but a means to an end. The primary value that IoT creates is a direct result of the data that can be captured from connected things and the resulting insights that drive business and operational transformation,” Christie wrote.

The study also contains several examples of “IoT in action” including Canadian mining company Dundee Precious Metals, which has installed wireless network coverage along 50 kilometres of its underground mining tunnels. RFID tags on miners’ hats and vehicles enable location tracking via 3D maps and also real-time tracking status. With improved miner safety, production increased by 400%.

The company’s principal operating assets revolve around gold, silver, copper and zinc concentrate and are located in Bulgaria, southern Armenia, Namibia and northern Canada

The city of San Francisco, meanwhile, has installed parking, garage and roadway sensors for real-time parking analysis. Deployed in upwards of 20,000 parking spaces, parking search time has been reduced by 43%.

At the Global Editor’s Conference, Dave De Yagher, senior operations manager for a smart metering project with B.C. Hydro, and Kai Hui, chief technology officer with BitStew Systems based in Burnaby, outlined a smart metering project that has morphed into an IoT initiative as a result of hardware and software advances.

BitStew’s Grid Director is a focal point of a smart meter deployment launched in 2011 for 1.8 million customers throughout the province. It allows utilities to capture a real-time view of their smart grids and make more informed decisions about usage patterns at any given time through real-time analytics and dynamic event management.

B.C . Hydro manages the deployment through BitStew tools that track the electricity grid upgrade via a “real time interactive map” that shows open, active and closed smart meter work orders as
meters are installed. BitStew software can also flag outages and meters that have been tampered with.

“Our product is built to solve the issues of operations in the IoT world,” said Hui. “It is pretty simple to operate a network with a few thousands end points, but when you get to the point where B.C Hydro is at, operations is a real challenge because there is a lot of data coming at you.

“You need an application that helps you to look at that data and look at the patterns coming at you and then triage that data automatically so that you have the right information to act on. We  call that Software Defined Operations. It’s all about a platform that sits on the nexus of IT and OT that can deal with the streaming aspect of IoT, but also automate and relieve the pressure on the humans who have to operate that massive network.”

De Yagher estimated that B.C. Hydro stands to save $1.6 billion in operational costs as a result of the upgrade.

“We are looking to migrate over to a fully-compliant IP network of over 2 million network nodes, which is a combination of smart meters and Cisco routers.

“We have 365,000 square miles of coverage. There was not a single service provider that allowed us to inter-connect all these devices. It was quite a significant risk-sharing arrangement between ourself and our technology partners.

The report states that the “unparalleled distribution and variety of devices and data today make data integration a bigger hurdle than ever before.

“Organizations must consider multiple factors, including the physical installation of devices, the best communication standards, how to handle many different types of data and how to integrate IoT data with data from other sources, such as third party data providers from the cloud, as well as internal, historical data stores.”

Christie wrote that private and public sector organizations must master the data and process components of IoE to capture the insights required to drive improved outcomes: “For most organizations, this will require new skills for roles that didn’t exist even a year ago. These competencies must be developed by organizations themselves and by educational institutions cultivating the workforce of the future.

“According to IDC, 51% of CIOs are concerned that the digital data torrent is coming faster than they can cope and 42% don’t feel that they have the talent needed to face this future. Gartner concurs, saying ‘few organizations will escape the need to connect smart objects with corporate systems and applications. Therefore, IT organizations must master new skills, tools and architectures required by the Internet of Things.’’

Even vendors like Cisco that have helped create and nurture IoT are having to adapt and change. On the opening day of the conference, Chuck Robbins, senior vice president of worldwide field operations, conceded that CIOs are under immense pressure as a result of IoE, IT complexities, technology transitions, CEO expectations and the speed at which business models change. He added that Cisco is not immune.

“About 15 months ago I stood on stage at our worldwide sales meeting and said this is just the new normal that we live in,” he told Connections+ in an interview. “We actually used a metaphor involving a roller coaster and said, ‘every week, we are going to ride a new one because just when you think you have figured out where are all the twists and turns are,’ along comes another one.

“Every company feels this way because everything is moving so quickly. When you combine the dynamic macro environment with the expectations of the customers and all these technology transitions that are going on it creates a pretty complex puzzle. Those who
figure it out will be the ones who win.”


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