​Through Cisco and IBM, can customers have it both ways?

​Through Cisco and IBM, can customers have it both ways?

Tech giants come together to offer a hybrid analytics architecture for Internet of Things.

Cisco and IBM’s new Internet of Things (IoT) partnership promises to undo a customer perception logjam by endorsing the concept of edge analytics or processing, analysing and acting on IoT data close to the devices and/or sensors at the network “edge.”

As reported by ARN, the tech giants have worked out how to run components of IBM’s Watson IoT analytics on Cisco edge devices, essentially bringing more intelligence closer to where the action is.

For customers, it promises to alleviate the past IoT conundrum of “where to start with analytics” but in short, the companies’ message is clear, “you can have it both ways.”

“The integration greatly improves IBM’s and Cisco’s analytics offerings, strengthens both companies’ IoT strategies, and promises to increase their respective IoT revenues,” Technology Business Research Principal Analyst, Ezra Gottheil, said.

“The agreement does these things by simplifying the construction of IoT solutions that integrate the capabilities of both companies; company spokespeople have said their 25,000 mutual customers had been asking for that capability.”

Gottheil said much of the excitement about IoT in 2015 was about extracting value from the big data IoT generates, with IBM at the forefront of generating that excitement.

“Vendor companies emphasised strategic transformation of companies implementing IoT,” Gottheil said.

“What IBM and other vendors pursuing big IoT have found over the last year, however, is that customers see IoT as strategic but are hesitant to commit to large-scale IoT projects.”

For Gottheil, customers interested in strategic transformational IoT projects often experiment with proofs of concept or tactical implementations as they evaluate their commitments to big IoT.

But this is a costly and time-consuming process for vendors and has resulted in slower growth rates in IoT than expected originally.

“Customers see edge-based IoT as safer, with greater assurance of a more rapidly realised ROI,” Gottheil added.

“The problem with strategic IoT based on centralised analysis is that the cost of big IoT is large and the benefit is less certain than that for little IoT.

“The benefit is based on the insights generated by centralised big data analytics, and the value of those insights cannot be known until they are generated and used.”

With little IoT, Gottheil said the ROI may be more modest, but it can be estimated with more confidence and because of the lower cost of little IoT, the risk is smaller.

With this announcement, Gottheil said IBM is able to offer its customers a “smooth path” between edge-based IoT and centralised big IoT.

“At the same time, the performance of analysis at the edge reduces the cost of centralised analysis by reducing the amount of data transmitted, stored and processed,” Gottheil explained.

“Together, these benefits smooth customers’ transitions and lower their costs, making it easier for customers to move from little IoT to big IoT.”

In addition, Gottheil said Cisco is now able to offer its customers an “easy bridge” to the power of centralised analytics.

“Cisco customers had been using edge analytics unless they created their own integration with centralised analysis platforms; the Cisco platform relied on the company’s fog computing edge analytics as its analytics platform,” Gottheil added.

Is Hybrid IoT a winner for IBM and Cisco?

Gottheil said combining the IBM Watson brand with Cisco’s edge networking and fog computing capabilities presents a compelling message to IoT customers.

The technology paradigm underpinning this partnership is not new however; vendors such as Microsoft, Dell and GE have edge and centralised analytics and computing capabilities for IoT, which provide similar cost savings and time benefits.

However, Gottheil said this partnership will create proofs of concept and increase customer awareness of hybrid IoT, and it will allow IBM to put Watson in the driver’s seat in more situations.

For Cisco, the partnership adds a vital third component to its IoT system, bringing in a powerful centralised analytics engine to pair with its platform (Jasper) and connectivity plays.

“We believe it ultimately strengthens Cisco’s class revenue driver - edge routing - while complementing its IoT-based software, security, and software revenue opportunities,” Gottheil said.

“The partnership allows both companies to approach IoT with joint sales and go-to-market initiatives where it is most beneficial for both vendors.

“Because Cisco and IBM have separate cost structures under this agreement, we expect IBM to pursue partnerships with additional vendors, such as Juniper, to spur IoT market growth.

“At the same time, Cisco will explore tighter integration with other central analytics vendors, such as Microsoft and GE.”

Market competition

Gottheil said the partnership will also help IBM better differentiate against IoT analytics and Cloud competitors such as AWS, Google and Microsoft by keeping analytics and Watson at the centre of its Cloud and IoT portfolios.

“With AWS established as the dominant leader in public Cloud infrastructure, IBM is working to promote its hybrid IT, cognitive, and Cloud services abilities as part of a focused portfolio, which allows clients to use Cloud-enabled technology to achieve industry-specific business outcomes,” Gottheil added.

“AWS struggles to provide comparable business solutions to enterprise customers because it messages a broader set of solutions, typically at the developer level.”

Going forward, Gottheil believes that IBM’s and Cisco’s industry focus and expertise will “resonate well” with IoT customers who typically require customisation, and ultimately provide each vendor with an additional avenue to drag their Cloud solutions into the conversation.

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