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Cisco’s Intent to Acquire Jasper is All About Making IoT Simple, Scalable and Interoperable

Today, Cisco announced its intent to acquire Jasper, a company that delivers a cloud-based IoT service platform for millions of connected devices. With Jasper, enterprises can simplify and automate the management of IoT services across a wide range of connected products such as cars, printers, vending machines and many others.

 
I’m incredibly excited about this news and believe it will help accelerate the digitization journey of our enterprise customers. Jasper understands that enterprises making connected products need a simple, scalable and interoperable IoT service platform that can support the billions of connected devices estimated to be connected to the network in the next five years. Together, Cisco and Jasper will deliver exactly that to our customers.

 
At Cisco, we use our build, buy, partner, invest and co-develop approach to innovation to identify and capture key market disruptions such as IoT. Today, Cisco Investments is one of the most active IoT investors globally, with over 50 companies in our portfolio; providing us a front row seat into the disruption and opportunity that IoT promises.

 
Cisco views Jasper as a unique IoT service platform that is disrupting a massive market with strong strategic alignment with Cisco. Jasper represents the largest platform of scale in IoT today with over 3500 enterprise customers and 27 service providers across 100 countries.

 
Jasper’s ability to build strong relationships with both enterprises and service providers makes them distinctive in the IoT industry. Jasper recognized early on that in order to support its enterprise customers, it needed to tightly integrate with service provider networks. This strategic decision was game changing – it helped them create an expansive recurring revenue-based business model that offers more breadth and reach than any other IoT player today.

 
When I first met the CEO, Jahangir Mohammad, I was immediately impressed with his visionary approach to the opportunities available in IoT and his foresight in building a unique business to capture those opportunities. 10 years ago, when everyone was focused on flip phones and the early adoption of smartphones, Jahangir and team focused their energies on connecting everything else, including GPS units, cars, security systems and point of sale devices. This early insight has proved fruitful, and now many millions of “things” are connected to the network and working on Jasper’s platform. More importantly, Jahangir and Cisco share a common vision of how to best serve the opportunities presented by IoT by connecting everything in a way that is simple, scalable, and interoperable. Jahangir will be leading a newly formed IoT Software Business Unit under our IoT and Collaboration SVP/GM Rowan Trollope.

 
By joining Jasper with Cisco we will help our customers move faster to truly realize the value of IoT.

Find more information about the announcement on cisco.com

Protecting Innovation: The Beginning of the End

Earlier today, the International Trade Commission (ITC) issued a ruling in the first of their investigations into Arista.

This follows a lengthy investigation, a review of thousands of pages of briefing materials and supporting evidence, and a two-week hearing involving testimony and cross-examination. We thank Judge Shaw and the ITC staff for their diligence.

Specifically the Judge’s ruling:

  1. Found violations of three patents: U.S. Patent 7,162,537 (“[E]xternally Managing Router Configuration Data … With A Centralized Database”) (Sysdb) and U.S. Patent Nos. 6,741,592 and 7,200,145 (Private VLANs)
  2. Foreshadows an exclusion order banning imports of all Arista switches (implemented after confirmation by the full Commission).
  3. Installs a challenging ITC review process for any new designs (the result of not bringing evidence of new designs to the ITC hearing).

The details of the Judge’s determination will be published within 30 days, but this notice marks the beginning of the end for Arista’s systemic copying of our intellectual property.

Arista can no longer support claims to customers, resellers, and the market that they created products from “a clean sheet of paper.” The patents in question go to the core of Arista’s products. One of those found to infringe covers Cisco’s proprietary “SysDB.” Arista’s CEO has previously referred to “SysDB” as Arista’s “secret sauce” and more recently, the architecture on which NetDB is built. None of the patents have been proposed for or adopted as industry standards. And all patents we asserted against Arista were invented either by Cisco employees who became Arista executives, or by Engineers who worked for Arista executives when employed at Cisco.

We seek fair competition, but will take action against those who misappropriate our technology and use it to compete against us. Based on our investigation, we believe that Arista’s use of our IP was intentional, pervasive, and driven by the most senior levels of their organization to unfairly compete. Copying and misappropriation are not a legitimate strategy, and today’s ruling is a vindication of our position.

We now see four options for Arista:

  1. Withdraw the products.
    This was the honorable path taken 12 years ago by the only other company that we caught intentionally using our intellectual property in their products.
  2. Modify the products so that they no longer infringe.
    Arista could have submitted new designs during the ITC investigation, but chose not to do so. We now call on them to disclose and submit any workarounds for the required ITC scrutiny.
  3. Face an exclusion order.
    Ignoring the order would result in further sanctions, including a potential permanent injunction against the sale of their products in the United States.
  4. Evade the ITC exclusion order.
    Instead of working around our intellectual property, Arista could try to work around the ITC. Any attempt to avoid an import ban by changing how they source and assemble products fails to acknowledge that ITC rulings cover components imported to make infringing products. This would be a cynical strategy that could expose their suppliers to liability for infringing Cisco’s patents, and validates customer and partner concerns about buying infringing products.

And this is just the beginning. In April we will see a ruling in the second ITC investigation, which may confirm more violations and import bans. Arista will also face two District Court juries with these rulings on their record. The judges and juries in those trials will note this day as the day that Arista no longer can pretend that its products aren’t tainted by misconduct. This will be important as they consider injunctions to remove infringing Arista product from the market.

Cisco’s goal has always been to protect our innovation, and stop Arista from using our patented technology. Their behavior has negative consequences for the industry, and is unfair to those who were sold infringing products and those competitors – beyond Cisco – who are working hard to play by the rules. We see today’s ruling is an important step towards accountability.

 

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Reimagine Work to Maximize Digital Value

As Cisco’s Chief Digital Officer, my entire focus is on enabling Cisco and our customers to accelerate the digitization of our businesses, countries, and cities.

Digitization provides an enormous opportunity to enable, differentiate, and define new business models; yet at its core, the success of the transition is predicated on the capacity to reimagine and reinvent the actual work. This includes building on the Internet foundation to extend the mobility of work, the distribution of work, the immediacy of work, and how and where work will take place.

Being digital isn’t just about technology. It requires companies to reexamine their entire way of doing business — and how they offer it — to deliver new value to customers and partners through fast innovation and operational efficiency.

Winners will be those who equate digitization not with basic automation, but instead with the notion of reinventing systems and tools to create a continuous cycle of innovation in a company’s product portfolio and operating model.

As we begin 2016, companies are under more pressure to accelerate digitization than ever before.

In fact, according to a 2015 study by the Global Center for Digital Business Transformation (DBT Center), “digital disruption” will displace nearly 4 of the top 10 incumbents by industry over the next five years. The average time to disruption is a mere three years!

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Protecting Innovation: Cisco seeks only fair competition

Arista’s filing of bogus antitrust claims today is not accidental or a coincidence.

The claims, most of which were included in earlier Arista filings, are a smokescreen to divert attention from the important ruling expected from the International Trade Commission (ITC) on February 2*. This is when Judge Shaw will rule on the validity of five Cisco patents and whether Arista infringed any of those patents. We chose the ITC as a forum because of its defined and accelerated timetable. If infringement is found, Arista, despite their efforts to delay the ITC process, may be just a few months from an exclusion order banning a majority (or all) of their products entering the United States.

The antitrust claims may also be a pretext to muddy a District Court trial scheduled for November, just as Arista used procedural tactics in a failed effort to delay the ITC actions. Arista missed the deadline for amending their claims in the CLI case to which they are seeking to add these new claims, after they got only a portion of the long delay they earlier sought from Judge Freeman.

Let me be clear. We welcome the opportunity to show that Cisco’s business practices are consistent with a highly competitive and vibrant industry. We seek only fair competition, but will take action against those who misappropriate our technology and use it to compete against us.

By contrast, the extent of Arista’s copying of our CLI sets them apart from others in the industry. They have directly lifted more than 500 multi-word command line expressions. By comparison, networking products from HP, Brocade, Alcatel-Lucent, Juniper Networks and Extreme each have only a small fraction of overlapping commands. It is no surprise then, that when Arista’s Chief Technology Officer and Senior Vice President of Software Engineering was asked about the CLI, he references his company’s “slavish” copying.

Our goal has always been to protect Cisco’s innovation, and stop Arista from using our patented and copyrighted technology. Arista’s behavior has negative consequences for the industry, and for their customers and partners who were sold products using stolen technology. They can no longer delay the inevitable.

* Updated 27 January 2016: The due date for Initial Determination in ITC Case 944 has been extended to 2 February 2016. This change is in response to the Federal Government closures that took place this week due to inclement weather in Washington DC.

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The Fourth Industrial Revolution is Still About People and Trust

This week, I’ll navigate Davos with hundreds of global business and government leaders to tackle the opportunities and obligations we have to improve the state of the world. The theme for this year, “Mastering the Fourth Industrial Revolution,” could not hit closer to home. Klaus Schwab of WEF has defined the Fourth Industrial Revolution as the “fusion of technologies across the physical, digital and biological worlds, creating entirely new capabilities and dramatic impacts on political, social and economic systems.”

These conversations about the almost infinite potential of technology are ones we have on a daily basis at Cisco. We believe in the power of technology to transform industries and lives, and we see it moving faster every day. Our conversations, however, go far beyond the technology. They are about the people, the relationships, and the trust necessary to execute against the opportunity in front of us.

Even in a digital world where machines can now learn on their own and mimic our intelligence, it is still about people. It is people who build and benefit from the technology, and it’s also people who must adapt in order to participate in this world where technology is pervasive across every aspect of our lives.

We have much to learn from the past three industrial revolutions. In each case, the disruption of the various industries has led to a disruption of the workforce where new skills were necessary for economic survival. Often times, the reskilling of workers lagged far behind the revolution, creating significant societal challenges and even leaving much of an entire generation stranded. I know we can do better this time. In the last year, we have committed – together with the local leaders – to train nearly one million new students in countries around the world such as France, Italy, Australia, India, UK, Saudi Arabia and Germany. These public-private partnerships are immensely powerful – a country can lower unemployment while creating new, higher value jobs, and a company can address talent gaps in critical areas and train a loyal base of future employees. The time to move is now, the opportunities are significant, and the obligation is ours.

Another important focus area is the significant global shortage of security talent. As technology connects everything, the amount of data generated is growing exponentially – and it’s only going to increase. In this new world, data becomes one of the most critical assets that any organization has, and we need to start thinking of it relative to its importance to our future. This data is incredibly important, therefore protecting this data is more critical than ever. Read More »

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