Chuck Robbins: 9 Biggest Remarks On 5G, Edge Computing, Webex And COVID-19 Consequences
From 5G and edge computing opportunities, to the impact of COVID-19, the power of Webex, and what Cisco’s cost reduction plans mean for partners, here’s what Cisco CEO Chuck Robbins told CRN at this year’s Partner Summit.
Robbins On The Record
The COVID-19 pandemic may have upended markets and business plans around the globe—not to mention IT spending—but a few areas it hasn’t negatively impacted include edge computing and 5G, according to Cisco Chairman and CEO Chuck Robbins. In fact, the opportunity around 5G may have been fast-tracked as a result of the pandemic, he said.
At the Cisco Partner Summit 2020 Digital Event, Robbins shared his goals for the company and for its robust partner organization. Among those is the creation of an integrated 5G software stack that Cisco and its partners will be able to deliver as a service to customers around the world. Robbins also said that Cisco would be heads-down-focused on delivering edge capabilities—whether that means the carrier, cloud or enterprise edge—to allow the app developers of the future to run distributed applications and access data securely at the point where it has the most value.
Robbins carved out some time to talk to CRN at Partner Summit about emerging opportunities around 5G and edge computing. He also shared his thoughts on COVID-19’s impact on work routines and how Cisco Webex, a videoconferencing platform that’s emerged as a leader during the pandemic, stands out from the pack and what new features are coming down the pike.
Here’s what Robbins had to say about what partners can expect, and check out what Robbins told CRN about the Everything-as-a-Service opportunity for the channel.
Where is the opportunity for Cisco in the 5G and edge computing arenas, and have these markets been impacted by the pandemic?
First of all, in 5G, our opportunity is immense: the core backbone networks that need to be built— stand-alone 5G networks over the next few years—and the capacity that will need to be increased as the traffic in the band and the edge traffic comes on and the number of 5G devices increases. We also play in the orchestration stack. We play in the packet core, so we have a lot of core technologies. The enterprise services that will be built will result in a huge percentage of the profitability. These 5G investments are going to come from enterprise services, and most of our customers believe that we are the best equipped to help them build out those services around security and other capabilities.
On the edge strategy, in the carrier edge we’ve already created some innovative CDN [content delivery network] solutions that are getting traction in the marketplace. In the enterprise edge, I think it’s all about taking our assets and our capabilities and creating a technology stack that allows the enterprise developer—the modern developer—to actually run elements of applications at the edge and process data locally with the required application security. So, I think giving them a stack to actually be able to do that is a big benefit and a capability that we have that’s unique to Cisco.
I think edge is still nascent; I think 5G is actually farther ahead. I’d say that in most cases, the 5G deployments altogether have been accelerated by the pandemic.
How big a role do you see Cisco partners playing in the edge and 5G markets?
I think internationally, particularly, the partners play a huge role. And by the way, the service providers are our partners as well. But for the traditional partner, if you look at what’s going to happen in the enterprise, we talk about things like creating an abstraction layer that allows modern developers to actually program and make underlying infrastructure decisions within the application, looking at application security and how it integrates into the architecture, helping customers really take advantage of the insights that you can gain from cloud-native AppDynamics combined with ThousandEyes, and then, helping customers understand how to use that information to optimize applications. I mean, there are tremendous opportunities, particularly bringing the edge in when applications are written that are running microservices or micro elements of the application at the edge. So I think it’s just a continued evolution of what capabilities the partners are going to develop to actually bring value.
With Zoom, Microsoft Teams and Cisco Webex emerging as leaders in the videoconferencing space during the pandemic, what do think you about the competition and where does Webex stand out?
The market has expanded for all of us. That’s good news. I think that what it’s highlighted—what the pandemic is going to drive—is this hybrid work model, which actually gives us an incredible opportunity to add more capabilities to the Webex platform going forward. [Jeetu Patel, senior vice president and general manager of Cisco’s Security and Applications business] has demonstrated the noise cancellation technology that we acquired from BabbleLabs in the [Webex] release [released on Oct. 31].
I think at the end of the day, the biggest differentiator for us is we built the platform with privacy and enterprise security in mind. When we’re talking about Webex Legislate as an example, that is the core reason that governments around the world are using it—because they believe in it. They trust it. And I think that customers have to understand that these are not casual conversations that are happening right now. These are discussions about your core intellectual property, and security and privacy matter in a very big way.
Also, I think the teams have done a great job on really [putting a] big focus on user experience and simplicity and making features quite usable. All those things are good, but I’d say that the big differentiators are around privacy and security.
Cisco said in August said it would cut $1 billion in costs over the coming months. How will these cuts impact Cisco's channel business, and will Cisco be leaning on partners now more than ever?
I would say that the bigger thing that I think is reflected in the partner opportunity is how we’re transitioning our coverage model as an example of the adoption opportunity that’s being presented by us moving more and more to software, subscriptions, SaaS and Everything as a Service. I think that the more we can continue to gain capabilities that are exposed to the application developer, I think that gives them more opportunity as well.
[Cisco relying on partners even more] is a logical assumption to make, and I think the other thing is, some of the good people who made that decision to take the [early retirement offers], in many cases, may end up working with partners in the future. So that’s good news as well.
How has COVID-19 impacted how you personally do your job?
Probably not too different from everybody else. I’m largely not in the office. We’re here when we need to do broadcast events like the Partner Summit. I was last here [In August] and I come in to do earnings. Beyond that, it’s sort of like everybody else. I’m working a lot on video from home.
The things that I think we’ve learned over the last few months is that, as we all know, when you’re home, your workdays can just go on and on. One of the things that I figured out and I’ve encouraged our employees to do the same is that you actually have to build time in—and even though you don’t think about taking a day off because what are you going to do?—you have to take time off. You have to get away from it. You can’t sit in front of a video screen all day—most people say that their backs and their necks [are hurting]. And then there’s anxiety and concern—now we have another [COVID-19] wave coming in the U.S. and in other countries around the world. It’s a challenging time and what we’re trying to do is be as open, communicate frequently with our employees, be honest, and be authentic about what’s going on. I think that’s all we can do right now and hopefully we’ll get to a place where we have high- volume, rapid testing capabilities in the U.S. and around the world with therapeutics and, ultimately, a vaccine.
What kinds of new and interesting use cases have you seen partners enabling as a result of COVID-19?
There were lots of incredible partnership opportunities early on, particularly where we worked with our partners to get health care, like pop-up hospitals, stood up. Those [projects] are always done with our partners who are helping our customers do the things that they’re trying to do. We’re talking about IoT sensors and we have sensors that we’re building into video units and offices to help, we have DNA spaces that partners are using to actually help customers think through return-to-office strategies and how you can signal to employees when they’re not socially distanced. A lot of that’s happening right now, and I think there’s a lot of creativity.
How can partners adapt to the new way of selling due to the pandemic since they often can't get in front of customers the way they used to?
I agree that you can’t be in front of a customer, but the good news is all your competition is in the same boat and the customer is actually now becoming quite accustomed to [video] technology. So there’s another slight silver lining that this can become a part of how you sell in the future because everyone knows it’s viable. They might not want to do it 24 hours a day, but I think that it will make selling more productive over the long term.
We’ve created virtual customer experience briefings that we run and I kick them off. And I know partners are doing the same thing and are doing remote demonstrations of the technology—cloud-
delivered demonstrations that are very effective. Even down to, I hear about people having virtual dinners. We used to joke when telepresence came out that we’re going to have virtual dinners—I’ll get dinner, you’ll get dinner and each sit on our side and set up a video, but it never really happened. But it actually happens today.
Cisco now has about 78 percent of its total software revenue sold as subscriptions, beating the target of 66 percent. What's the next goal related to software and services?
Yes, in 2017 we set out for us to have two-thirds software and subscriptions, so we did exceed that. And we wanted 30 percent of our revenue to be from software and we were at that clip as we exited Q4 [in August]. We wanted 50 percent to come from software and services and we were at 51 percent last year. So we’re currently working through the answer to your question. By the middle of the next calendar year, we’ll have a real view because we’re having to look at the P&L implications of everything we’re talking about and trying to figure out what it means and how fast these transitions are going to occur. It’s just not something you can figure out overnight, so we’re going through that right now.
What's your message to Cisco partners heading into 2021?
The key message from me is really about the continued commitment that we have. There’s not another big tech company that’s being run by an individual who was part of the team that crafted the original partner program, so I think that we understand deeply the value of our partner ecosystem around the world. I think the biggest thing is, through these transitions, we will figure out how we work together to deliver value together and both win.