Cisco Meraki Leader On HPE-Aruba 'Chasing The Meraki Model,' Product Expansion And Being Nonproprietary

Cisco's Shining Star: Meraki

Leading the charge for Cisco Systems' highly successful Meraki business is Todd Nightingale, who has spent years pulling various Cisco technologies into the Meraki platform and fighting off the competition.

The cloud-based management platform is full of open APIs and rich recurring revenue opportunities for the networking giant's channel community. With more than $1 billion in annualized sales and 13,000 partners currently selling Meraki, Nightingale says market leadership and the innovation engine will continue to grow.

"We really try to focus quite a bit on enabling partners to find new customers because a customer that makes an initial purchase of Meraki, with all the partner services that come with it, that customer tends to quadruple their spend over the next two years," said Nightingale, senior vice president and general manager of Cisco Meraki.

In an interview with CRN for Cisco Partner Summit 2017, Nightingale talks about competition with Hewlett Packard Enterprise-Aruba, Meraki's technology road map, being nonproprietary and his strategy for portfolio expansion.

What is Meraki's biggest differentiator in the cloud-based management industry?

The Meraki portfolio in particular, our differentiator is and always will be simplicity. It's the easiest-to-manage, easiest-to-monitor infrastructure solution in the world. We focus on that maniacally. The differentiation that you get from Cisco and all Cisco products is you get the most comprehensive network solution that's backed by all of the Cisco engine, support, channel partners. In large part, the channel community is the big part of our differentiator and all of the value that they bring to our customers. Our team of engineers around the world, the partner community and the Cisco system engineer community has been bringing that simplicity message to the market. I want Meraki to stay on that – simplicity is, and always will be, our core differentiator in the market.

Looking specifically at HPE-Aruba, what separates Meraki from its cloud-based management solution?

When I look at the competition like the Arubas of the world or Junipers or even some of the new players, what I see is a lot of the competition, they're chasing the Meraki model of building a cloud component to their solution, but none of them have focused on simplicity. They've essentially moved to the cloud but haven't moved their value proposition to simple. In the long run, that will benefit Meraki customers for whom simplicity and staying focused on their own mission is really the most important thing. Cisco's portfolio has also always been the most comprehensive network portfolio across the board.

Your competitors typically call Cisco a proprietary vendor. Is Cisco Meraki proprietary?

I think Cisco got a little bit of a bad reputation for that years ago. Probably because of a handful of relatively proprietary networking protocols that Cisco products started to use in order to build some more powerful features that weren't really available in open- source and standardized protocols. But I haven't seen too much of that recently from any part of Cisco.

For Meraki, we implement 100 percent standard compliance protocols all through our data plane and all through our stack. We have gotten this request quite a bit for the platform to be more open, more programmable [and] have a greater ability for customers and partners especially to develop on top of it using standard-based tools. That's really driven our open API strategy.

So is Cisco's traditional business strategy different from Meraki regarding openness?

That strategy is the same on the Meraki equipment and on the traditional Cisco equipment as well. In fact, our DNA Center development here with a centralized management system for all of the Meraki and on-premise stuff – all of the communication, all the APIs that DNA Center will use to manage Meraki will also be published, open to the entire development community. Partners and even customers can use those APIs to more closely integrate and manage Meraki products. The idea of Cisco being proprietary is kind of an old label that's convenient for competitors to use, but on the Meraki side we drive a standard compliance solution for sure across the board.

Talk about Meraki's integration with DNA Center.

A management plane integration using Cisco's DNA Center will help customers visualize their entire network including Meraki components and traditional on-premise components. As more customers transition to Meraki, this gives them the power to really manage and visualize hybrid networks in a much easier way. It's an enormous opportunity for partners. Our partners are the ones deploying networks for all kinds of use cases and customers. It's the first time we've done anything like this.

Give an example of how Meraki DNA Center integration will work.

If you think about a large hospitality customer, this is a real case study, you've got a large hospitality customer with Meraki at all of the different hotels around the world, but in corporate headquarters they're using Cisco traditional equipment -- Catalyst, ISRs, Aironet access points. But in order to visualize that whole combined network and to have a single platform that can monitor all of it … this is going to allow partners to have that tool that can monitor the whole combined network in a single platform. DNA Center is able to manage both sides of the portfolio. It's a huge step forward.

What are some Meraki growth numbers that might surprise some people?

There's more than a million Meraki networks; we passed the million network threshold last year. Meraki is more than $1 billion in annualized sales -- quite a bit more actually. Some 173,000 customers have purchased Meraki, and 50,000 of them came new to the platform last fiscal year. We really try to focus quite a bit on enabling partners to find new customers because a customer that makes an initial purchase of Meraki with all the partner services that come with it, that customer tends to quadruple their spend over the next two years, as they add more sites, but also more Meraki products in the stack. And of course all the partner services, managed services that come with it.

How many partners are selling Meraki?

There were 13,000 partners transacting last year. That was 25 percent growth over the year before. A stat that I'm really proud of is … we really started publishing APIs and launching our developer community along with DevNet about 18 months ago. We now have 2,000 active Meraki developers. We do more than a million API calls a day. The reason this adoption has been so fast is really the simplicity. It turns out if you can manage your whole network, all your infrastructure from the cloud and all of the APIs are available from that cloud – it's easier to develop products and applications and automation on top of those APIs because all of those APIs are cloud-accessible.

What's your strategy for portfolio expansion?

We've been working with partners for years now and in large part it's been their advice driving us forward to move from cloud-managed wireless to cloud-managed firewalls and security appliances to switching and to mobile device management. Most recently we launched a cloud-managed security camera as well as SD-WAN. Both of those products, we're seeing this enormous momentum in the channel of partners picking up SD-WAN on the Meraki MX, and security surveillance cameras on the Meraki MVs, and bringing these to market. Both of those products are growing much faster than any portfolios we've had before.

Why have those Meraki solutions grown so fast?

It's really in large part thanks to the channel partners who are familiar with the Meraki platform, they understand how the dashboard works already. So adding this to their portfolio has been simple and straightforward. That portfolio expansion play is something we're going to keep running, keep adding to this portfolio. But I'll tell you, SD-WAN and Meraki cameras are just exploding through the channel community.

Where are partners making the most money from Meraki?

There's so many partners right now that are looking to the Meraki portfolio to launch managed services. Many of them [are] partners who have been great system integrators, resellers and service providers who are shifting gears to provide fully managed services, network as a managed service, infrastructure as a managed service –are using Meraki to do that because the simplicity of the dashboard, the programmability of the APIs and the business model is just incredibly profitable but also incredibly valuable to the end customers. This managed service trend has been enormously successful for us.

What's Meraki software strategy?

We have an architecture that is cloud-native. Cloud-native management on the Meraki side involves a very significant set of software that's 100 percent cloud-hosted that customers never have to touch, manage or monitor; and importantly, don't have to deploy any hardware or spin up any hypervisor or anything to run. It's provided for them in a cloud. There are some really key cloud pieces that allow the whole rest of the motion to work.

Can you talk about the software driving Meraki?

Two come to mind. One is a technology called 'M-Tunnel.' That was built very early on on the Meraki road map, it is the secure tunnel that all of the Meraki devices use to connect back to the cloud. It allows us to seamlessly on-board devices without anyone having to touch or configure them. The second is called 'Little Table.' It's our data storage mechanism. It's where all the network analytics and network statistics are all stored. It's incredibly efficient.

Anything open-sourced?

So another core piece of technology is on the embedded side, so the other half of the Meraki portfolio that sits on the devices. All of our networking devices use a technology called 'Click' -- it's an open-source networking technology that our engineering team has been working with for years. We contribute back to that open-source project and we use it extensively through really all of our networking products.

What's your message to the solution provider community?

Again, partners who land Meraki into a customer on their first deal, [a customer] quadruples that spend – not just the product, but services spend as well – over the next two years. A lot of that is due to product expansion. The reason this is such a strong trend is when you deploy for the first time an SD-WAN security appliance with the Meraki platform using the MX, it's managed by the dashboard, it's managed simply and easily through the cloud. Then when that customer decides it's time to add Wi-Fi at a site or refresh their switching, when they choose Meraki for that – they deploy the hardware – but it's managed, controlled, upgraded and maintained through that exact same system they're already familiar with. So the platform leverage is enormous. As they go from routing, to switching, wireless to mobile device management to cameras – using that platform that they already know and love really helps with this expansion. We see it in the numbers.