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An Internet that spurs not strangles innovation

The world we live in today is one where people, process, data and – increasingly – things are connected as never before. The Internet of EveryThing (IoE), is driving the most dynamic area of innovation, creating new business models, economic, social and environmental sustainability and also has fantastic potential to improve our quality of life.

Just imagine: a blind man gaining independence because his once ordinary walking stick is able to communicate with his other senses through sensors, vibrations and GPS technology that guide him through the city maze. Imagine a connected car informed of traffic jams by analyzing traffic patterns and adjusting traffic light operations. Or think of smart manufacturing facilities that cut costs by reducing waste and energy consumption. And these are just the possibilities being realised today. Imagine what the future will look like in 5, 10 or 25 years from now.

We have barely begun to scratch the surface of what’s possible. We don’t know what applications and services will shape the Internet’s future. To continue innovating, we need the Internet to remain open, giving the most creative among us the chance to experiment with daring new ideas.

We also must be sure not to stifle the very innovation that we seek to encourage. If we do so, it could inhibit growth and new ideas alike. This is why today we should focus on putting in place the right policy principles that will further develop this new Internet of Everything.

In policy debates, net neutrality is often understood to mean that all bits should be treated equally, regardless of whether it’s a text, email, picture or video. While at first sight this may sound reasonable, the truth is that such a strict net neutrality principle would become an innovation straight-jacket. It would require us to re-design the Internet as we know it, doing away with tools that have become essential to its success.

Different Internet services have different requirements. It doesn’t really matter if an email arrives now or a second or two later. But if you’re dealing with real-time applications – such as video communication, or buying stocks or monitoring vital signs, delays can have an incredible impact on user experience and effectiveness.

So the truth is that you have to manage internet traffic to make sure that the data that has to get there immediately – does.   This short video explains what traffic management entails and why it is so important.

Reasonable traffic management is so deeply embedded in the Internet’s core structure that it could not operate smoothly without it. This is the case already with the traffic loads of today, let alone in the future. Because management and scheduling are a crucial part of the Internet, we are closely following European efforts to formulate new net neutrality legislation. Cisco believes such legislation has merit but it could also have sweeping implications for reasonable traffic management and new services that would ultimately stifle rather than encourage innovation on the Internet. These implications can and should be avoided.

Fortunately it seems there is an increasing realisation among some policy-makers that net neutrality legislation, necessary as it may be, shouldn’t eliminate reasonable traffic management altogether. That approach would undermine rather than improve the quality of users’ experience. One way to establish net neutrality rules that prevent bad behaviour while maintaining a role for traffic management is to pursue a two-thronged approach where a line is drawn between the types of bad behaviour we do not want to see in the Internet and the necessary and reasonable traffic management techniques that ensure the fast, reliable and scalable networks that we all rely on, and need as consumers.

Equally, there is an emerging consensus that we must avoid overly prescriptive attempts to cast into law lists enumerating or narrowly defining the types of services other than internet access services that we deem “deserving” of specific levels of quality. Such attempts are bound to get it wrong in many cases. Moreover, any such neutrality law would quickly be outpaced and overtaken by reality. Building a Procrustean bed for the Internet is not the way towards a more vibrant digital economy in Europe. It is not necessary to have these prescriptive definitions and conditions on innovation as long as we maintain strong and clear safeguards to ensure an open and reliable Internet.

As the debate on neutrality in Europe enters its final phase, with trialogue negotiations starting this week, we hope the European Parliament will take a fresh look at the issue and we achieve a balanced final outcome.

In essence, the legislation we need should be sturdy enough to hold things together, but flexible enough for Internet entrepreneurs to continue adding new applications and services.

Just think about what the Internet looked like 15 years ago: a handful of wires, noisy connections that would bump you off from time to time, and streaming would be as quick as a snail. We have made huge strides, and we can continue towards an Internet of Everything – a smarter, more productive and efficient way at approaching life. But to get there, striking the right balance in Europe’s regulatory framework is more crucial than ever before.

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Building a Successful Hybrid Cloud That Delivers Flexibility, Choice and Control

The debate about whether businesses need hybrid clouds is over. Technology executives see value in public clouds because they offer speed, economics, and scale that are very hard to achieve in a private cloud environment. On the other hand, private clouds offer control, data sovereignty, and security. Businesses need both, which means they need hybrid clouds. The question is; how can they successfully build them?

What makes a true hybrid cloud?

Hybrid clouds are like the Internet. When users connect a device, whether it’s a handheld or a laptop, or another machine, they don’t think twice about how these things are going to talk to each other. Similar to that, hybrid clouds are an “Intercloud” of clouds. That means that regardless of whether it’s a combination of a private cloud, a public cloud, or an extended set of clouds, the environments all work seamlessly together. They have consistent security and networking, and applications and workloads can be moved freely from cloud to cloud.
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IoE Can Help Banks Can Restore Trust and Close the Value Gap with Customers

“Let the buyer beware” is a sentiment that dates back well before consumer protection and truth-in-advertising laws. Yet, the issue of trust continues to permeate all areas of society today. A few weeks ago, I wrote about the “trust cliff” that affects the amount of information consumers are willing to share with retailers in order to have more relevant interactions.

Now, a new Cisco study on retail banking in 12 countries reveals a different kind of trust problem: consumers are getting less value than they expect from their banks, and this “value gap” is impacting customer trust.

The global financial crisis of 2007-2008 greatly damaged consumer trust in financial institutions, and brand equity has fallen along with it. In 2009, one year after the financial crisis, the world’s top 500 brands saw the value of their brands drop by 32 percent. For many banks, their brand value has yet to recover from pre-crisis levels.

But the roots of distrust go deeper than that. Our study shows that there is a fundamental disconnect between banks and their customers, and many customers no longer look to their banks to help them meet their financial goals. In fact:

  • 43 percent of customers say their bank doesn’t understand their needs
  • One in four would choose another provider for their next account or service
  • Only 40 percent of respondents worldwide turn to a financial professional for advice, and of these, 28 percent believe the advice is ineffective

IoE Trust and Value Gap graphic

Meanwhile, a growing cadre of disruptive “non-bank” innovators is exploiting this value gap between banks and their customers. They range from technology companies such as Apple and Google, to retailers such as Amazon.com and Tesco, to mobile and digital-only banking services, payment companies, and automated investment services. A surprising 80 percent of consumers surveyed said they would trust a non-bank for their banking services. In eight out of the 12 countries surveyed, more consumers would actually trust a non-bank than their own bank.

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A Retail Revolution: The Digital Generation Is Changing the Way We Work, Live, Play, Learn, and Shop

Retailers once had a pretty clear idea of who shopped where and how they did it. After all, there were not that many options available for shoppers. Consumers would see an ad or peruse a catalog, and then visit the physical store with the hope that their preferred item was in stock.

These days, retailers understand there is an entirely new kind of shopper. Indeed, since the advent of e-commerce, retail complexity has increased exponentially, and today’s digital consumer navigates a wide range of channels and potential shopping journeys.

As a recent Cisco survey of retail trends discovered, e-commerce has added about 40 possible shopping options for a typical shopper. With the rise of the Internet of Everything (IoE) — the explosion in networked connections of people process, data, and things — potential shopping journeys will expand to 800 and beyond. Some of the new options coming into play could include mobile devices equipped for live Web engagements, checkout optimization, mobile payments, wearables, augmented reality, and drone delivery.

The variety of journeys available to shoppers is growing exponentially.

IoE_Retail_Journey_3-2 copy
Source: Cisco Consulting Services, 2015

This sweeping digital transformation has dramatically altered the shopping behaviors of consumers, who now demand experiences that are contextual and hyper-relevant (enabling consumers to receive what they want, when and how they want it), whether in-store or out. As a result, retailers are reinventing their business models and rethinking much of what they once knew, including traditional customer segmentation.

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Video: IoE in Retail: Hyper-Relevance through Consumer Context

Increasingly, we are entering a period that has been referred to as “post-demographic consumerism” in which consumption patterns are no longer defined by traditional demographic segments such as age, gender, location, income, family status, and the like. This presents a significant challenge to retailers already grappling with growing complexity in their operations.

For example, Cisco’s research reveals that Gen Y is far from monolithic. On one hand, Gen Y continues to accelerate the shift to online channels (faster than any other group): although 34 percent make more than half of all purchases online as they seek convenience and greater access to information, 54 percent would shop only in stores for the next month if they had to make a choice. Moreover, just as the physical store remains important to Gen Y, many seniors are shopping online or with mobile devices.

In short, consumer segments are increasingly fragmented and ephemeral. The sheer number of potential shopping journeys is growing exponentially, and the change is occurring faster than ever before. For an individual shopper, however, the journeys are also dynamic. Consumers are constantly shifting to other journeys as new innovations emerge —
and faster than retailers can respond. Compounding this, the velocity of innovation is increasing as IoE dissolves traditional barriers (for example, through the low cost of app creation, the Kickstarter-style funding model, and so forth).

Since every retailer is unique, and there is enormous variation across categories, each retailer must define its own target segments, and then be prepared for the rapid evolution of new “microsegments.” Cisco is working with retailers to define target segments and prepare for the evolution of new ones.

To enable the customer outcomes that will determine the winners of the IoE era, most retailers understand that they need to know their customers as never before and, critically, possess the requisite business agility to adapt. Fortunately, IoE and consumer analytics technology provide the platform to truly understand, engage and respond to their customer.

Analytics is a key competitive frontier in the IoE era, enabling retailers to provide consumer experiences, offers, and interactions that are contextual, relevant, and timely. Moreover, analytics empowers the retailer to respond dynamically to constantly changing customer behavior.

To succeed in this area, retailers need a technology strategy that captures data at the “edge” of the network — from mobile devices, sensors, video cameras, and the like — and analyzes it locally, in real time, to respond to fast-moving opportunities. By leveraging analytics and other key elements of IoE such as video and mobility, retailers can drive greater efficiency in each customer journey, offer real-time savings, and create a more relevant customer engagement.

As shopper segmentation blurs, analytics is critical to understanding the new digital customer. Old or young, rich or poor, all customers have value and want to interact with retailers in new, hyper-relevant ways. IoE-driven solutions are the way to do it.

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The Evolution of the #ConnectedFan

I love sports—playing, watching, you name it. But the sports experience has changed so much over the past few years, in new and exciting ways, which makes being a fan or being a player more dynamic – and way more fun.

Growing up playing basketball, we’d play the game, feed off our fans’ energy and cheers, celebrate when we won, and then challenge the next team!

But today, fans are tweeting messages to their favorite players and players are wearing sensors to track their performance—it’s a whole new ballgame. With the transitions we’ve seen in mobile, cloud and the Internet of Everything (IoE), so much has changed—and will continue to change—how we engage with our favorite teams.

I’d even venture to say that the fan-player relationship is now personal. You used to be able to only enjoy a game at the stadium where it was being played, or by listening to the radio or watching TV. You certainly couldn’t share your thoughts on the game with the players playing, except by screaming at them – or the TV.

Innovations in streaming video, live broadcasting and social media, have made today’s experience radically different. Wi-Fi-enabled sports arenas, combined with the huge expansion in mobile capabilities, mean that fans can watch the game live, watch on TV, or via an app on their smart device. Anyone out there like watching the hoop cam during a game?

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