Cisco originally pitched a story focused on its latest initiatives to address the ‘IT skills and knowledge gap’, which is a big and growing problem, and while the just-released AI-powered predictive services can be folded, spindled and mutilated into a ‘talent-gap cure’, it appears more to be just a really good set of business solutions. The costs and resources required to keep the datacenter lights on can account for 70-80% of IT budgets, said Bryan Palma, Senior Vice President and General Manager, Cisco Advanced Services, but while improving efficiencies and uptimes will pay a huge business dividend, that doesn’t mean those freed-up resources will translate into the IT skills and knowledge required to facilitate the new IT reality, digital transformation, which by one estimate will be worth $493.39 billion by 2022, and is speeding along at a CAGR of 19.1%.
The new services, available immediately, fall into two categories — Business Critical Services and High-value Services — and are extensions of what the company has been providing for some time, said Palma. Services is the second largest business unit at Cisco, at $13 billion and 25% of revenues, with 90% of its services revenue recurring.
A big part of the company’s competitive advantage is its installed base of 50 million networks, he told IT Trends & Analysis, and the telemetry data from that provides Cisco with a better picture of what’s going on in the IT environment than practically every other vendor. Professional services can leverage that data to help customers shift their focus from maintaining their datacenters and network infrastructures to finding new ways to improve customer services and generate revenues, he added. “At the same time we’re seeing that IT has been more defensive and they are looking to be more offensive, and that’s where we’re looking to take them.”
Calling it a new portfolio of subscription services, Business Critical Services ‘deliver more capabilities including analytics, automation, compliance and security by Cisco Advanced Services’ technology experts’. “In the past it’s been called optimization,” said Palma, and as part of their ongoing focus on constant improvement, have made a number of improvements. “What we’re trying to do is give them the flexibility to move with their strategic options.”
The new service benefits include helping minimize human error by: reducing complexity and cost through automation, orchestration, and technical expertise; accelerating business agility and transformation through advanced analytics and machine learning capabilities; and reducing risk with automated compliance and remediation services.The business outcome objectives are to help reduce downtime by 74%, resolve issues 41% percent faster and reduce operational costs by 21%.
The other side of the services portfolio, Technical Services, is rolling out High-value Services to deliver ‘more proactive and prescriptive services’. The new features include: multi-level service options enhanced and premium, in addition to basic level (reactive) support; centralized support for Cisco hardware, software and third-party partner solutions (Solution Support is the default service offering for Cat 9K/DNA); and, Technical Services (TS) Advantage provides network-level support.
Palma says the secret sauce goes beyond the technology. It’s really the AI platform, coupled with that telemetry, together with the experience of our people, he said.
The telemetry data and experience may provide a huge advantage for Cisco. Estimates of the size and seriousness of the IT skills gap vary widely, but there are enough doom-and-gloom analyses to feed any frenetic forecast, i.e.:
–55% of employers experienced negative business impacts due to job vacancies, with 45% reporting loss in productivity and 37% seeing lower-quality work, costing businesses an average of $800,000 per year;
–68% of IT decision-makers — 71% in the U.S. and Canada — say their teams face a shortage of necessary skills;
-75% of managers facing skills gaps today anticipate one over the next two years, and 28% of those not facing skills gaps expect one to develop in the next 24 months; and,
-a recent CompTIA survey found 46% believe the gap has worsened in the last two years and the future looks worse: 800,000 IT workers are expected to retire between now and 2024.
Automation, machine learning and AI are gaining increasing significance as IT struggles to do more with less. Datacenter traffic is expected to increase 226% from 2015 to 2020, while the average cost of a datacenter outage jumped 38% between 2010 and 2016 to $740,000, or $7,900 per minute, with a mean outage duration of 95 minutes.
Last year’s datacenter automation software market increased 3.5% to $2.3 billion, led by VMware, Cisco, and BMC. However, both IBM and Hewlett Packard Enterprise experienced double-digit percentage losses in revenue, while emerging vendors such as Puppet, Chef, ServiceNow, and Red Hat saw strong double-digit growth.
IDC estimates that investment in machine learning will nearly double by 2020, while 52% of respondents to a new ServiceNow survey say they are advancing beyond the automation of routine tasks, such as security alerts, toward the automation of complex decisions, such as how to respond to alerts. “Machine learning allows enterprises to digitize in ways that were not possible before,” said Chris Bedi, CIO at ServiceNow. “To realize the full potential of machine learning technology, CIOs must elevate their role to be transformational leaders who influence how our organizations design business processes, leverage data, and hire and train talent.”
A new survey reported that 80% of enterprises are investing in AI, with the biggest impact (59%) expected in the IT, technology and telecom industries. However, while “enterprises today see AI as a strategic priority that will help them outpace the competition in their respective industries,” said Atif Kureishy, VP, Emerging Practices at Think Big Analytics, a Teradata company, but “to leverage the full potential of this technology and gain maximum ROI, these businesses will need to revamp their core strategies so AI has an embedded role from the data center to the boardroom.”
While Cisco’s initial focus is on its own offerings, it already supports both other vendors’ and open-source products, and that support will be expanded, said Palma. With the company for four years, he said he came over with the belief that the immediate future would be a proprietary focus, but to his surprise, it went the other way. “The world is going open source,” he said.
Customers already give the company top marks for services, and the new offerings are just going to enhance that reputation, said Palma. “We’re going to double down on this services side… but we’re not getting complacent”.
DISCLAIMER: I’m an investor in some of the companies referenced in this article.