Cisco Puts Software On The Front Burner

Cisco Systems has, since its start, been a network hardware company. The first product shipped by Cisco in 1985 was a router. The first patent Cisco earned in 1992 was for communications routing. And, as of Cisco's third-quarter earnings report this May, 46 percent of its total revenue still came from its core switching and routing businesses.

But with the rise of cloud and software-defined networking (SDN), Cisco is trying to change its tune and overcome the perception that it's still—and perhaps always will be—a hardware manufacturer at heart.

One of the more recent signs of Cisco's shift toward software is DevNet. Formally launched last month, DevNet is an online resource providing developers with hundreds of Cisco APIs, software development kits and other tools to create new applications to run on Cisco platforms such as its Application Centric Infrastructure, Intercloud and those developed around the Internet of Everything.

[Related: Cisco's Big Challenge: Will Chambers Stay To See It Through?]

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Since the soft launch of DevNet seven months ago, the number of Cisco software developers has shot up by 40 percent, now totaling 80,000, according to the company. Cisco's goal is to have 1 million DevNet members by 2020.

DevNet isn't Cisco's only recent investment in software. Cisco CEO John Chambers said between 80 percent and 85 percent of the company's engineers are now focused on software, and that the company's R&D investments have pivoted "big time" toward software innovation.

"If you watch the areas that are growing, it's software," Chambers said.

John Brigden, senior vice president, Software Strategy and Operations at Cisco, said the company's recent focus on software is "not a momentary thing," and is not something that will lose momentum when Chambers ultimately makes his move to retire.

"I am not concerned that people aren't committed broadly and on a wide base to software and what we are doing. Not at all, actually," said Brigden, who was brought on by Cisco 11 months ago to catalyze its software business. "In fact, John [Chambers] came up to me just the other day after we closed some big software transaction and he was really passionate about how do we do 100 more of these right away. He's been a big proponent. But so has Rob [Lloyd, president of Sales and Development] and so has [Cisco COO] Gary [Moore]. It's down the line."

Meanwhile, Lloyd said Cisco is tearing down some of the traditional barriers that existed between its sales and services organization in a bid to make the two units more "tightly coordinated" and ensure they share similar visions in terms and goals.

Driving the bulk of these changes, according to Chambers, is Cisco's focus on selling end-to-end architectures rather than one-off products. He said these architectures -- many of which are being developed to fuel the burgeoning Internet of Everything market—and being able to communicate, alongside partners, the business outcomes of Cisco technology rather than speeds and feeds is how Cisco will win in the long run, even in the face of SDN and cloud.

"You have your technology transitions -- i.e., cloud, more and more software -- we are going to tie software, hardware, ASICs and architectures together in ways that our counterparts are not," Chambers said. "You have mobility, you have security, you have collaboration, you have video, you have the Internet of Everything and you have Intercloud going on. And, so, our view is that each of these together offers an opportunity for Cisco."

Jim Kavanaugh, CEO of World Wide Technology, a St. Louis-based Cisco Gold partner, applauded Cisco's efforts around DevNet and selling customers more on business outcomes and architectures rather than individual technologies. WWT is investing more in software development and recently hired roughly seven "heads-down" software developers to join its ranks, he said. The solution provider also is revamping its sales strategy to go to market with WWT-tested architectures.

"This is absolutely something we have been working on for about three or four years now, and I know Cisco has been really moving toward this position," said Kavanaugh. "What we have done—and this is something I have been intimately involved with from the World Wide Technology perspective—is over the last four years or so we have invested approximately $50 million in building out different labs. And the whole intent of the labs is to build out integrated architectures."

Gary Alexander, owner of Alexander Open Systems, an Overland Park, Kan.-based Cisco Gold partner, also said he's glad to see Cisco investing more in developer resources such as DevNet, given AOS' own push into application development. He said AOS' dedicated developer team has created APIs that write to Cisco SmartNet and allow AOS to provide real-time network monitoring to clients as a managed service. AOS offers this service today to roughly 150 customers.

"We are taking tier-one and tier-two calls for Cisco, so they don't have to go to the [Technical Assistance Center] for that support, and are doing real-time monitoring of a customer's network in conjunction with taking care of the SmartNet contract," Alexander said.