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As Cloud Empowers Lines of Business, Challenges for IT

As the key delivery model for the Internet of Everything (IoE) economy, cloud is helping to drive sweeping changes across nearly all aspects of our lives. But while the growth trajectory of cloud has been carefully charted, there has been comparatively little insight into its impact on IT organizations. To gain a better understanding, Cisco® Consulting Services, in partnership with Intel®, undertook an extensive global survey of 4,226 IT leaders respondents in April-March 2013 to investigate cloud-driven IT change.

The Impact of Cloud on IT Consumption Models” study explored the dramatic changes affecting IT at all key consumption lifecycle stages — how businesses plan for, procure, deploy, operate, and govern IT. This is part two in a four-part blog series that will explore some of the findings of this study and discuss how today’s IT leaders can prepare for the new model for IT.

One of the clearest expressions of this cloud-driven change is the emergence of lines of business (LOBs) — human resources, sales, R&D, and other areas that are end users of IT — both as direct consumers of third-party cloud-based services, and as ever more prominent influencers of companies’ IT agendas. This represents a major paradigm shift from decades of IT tradition, when IT itself set the agenda and made all planning and procurement decisions.

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What’s Next for the Internet of Everything and Cities?

Today’s cities are experiencing the emergence of a new imperative from public leaders and industries. “Digital urbanism” is rapidly becoming a central pillar for urban planners, architects, developers, and transportation providers, as well as in public service provision.

From a public leadership perspective, cities can be viewed as microcosms of the interconnected networks that make up the Internet of Everything (IoE). In fact, cities serve as “fertile ground” for realizing value from IoE.

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Under the Cloud, a Climate Change for IT

Cloud has had a deep impact on the fundamental ways in which IT services are consumed. Yet we are only on the cusp of the transformation. Cisco estimates that connections among people, processes, data, and things will surge from “only” 10 billion today to 50 billion by 2020. Cloud’s value as a key delivery system will extend to this emerging Internet of Everything (IoE) economy, connecting people, processes, data, and things. And the cloud readiness of each organization will determine its ability to reap value in an era of sweeping change.

But what is the current state of IT cloud consumption? And how do IT decision makers view the future impact of cloud?

Figure 1. Drivers of IT Change.

ITCM

Source: Cisco/Intel Cloud Study, 2013

In a wide-ranging study, Cisco® Consulting Services (CCS), in partnership with Intel®, sought to pinpoint just how these powerful trends are impacting IT. The “Impact of Cloud on IT Consumption Models” study surveyed 4,226 IT leaders in 18 industries across nine key economies, developed as well as emerging: Brazil, Canada, China, Germany, India, Mexico, Russia, United Kingdom, and the United States. In each country enterprise and midsized companies were represented. The survey was conducted during March and April 2013.

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Is Your Company Ready for the IoE Revolution?

Ever felt that you’ve spent half your life searching for a parking space? Well, it’s not that much of an exaggeration. One study estimates that typical drivers spend 2,549 hours of their lives in the aimless, money-wasting, and gas-guzzling quest for a place to park.

Now imagine that through technology — connected cars, roads, and, of course, parking spaces — you could substantially reduce all of that wasted time and money.

IoEcarFINAL

Unfortunately, business and enterprise are rife with their own versions of wild goose chases for parking spaces: supply-chain deficiencies, checkout bottlenecks, quality-control failings, communication breakdowns, and, yes, clogged parking lots. These are but a few of the drags on productivity, efficiency, and innovation.

The solution for all these problems may be the same: connectivity.

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IoE and the Impact on Retail and Consumer Experience

The retail industry is facing unprecedented changes. Since Amazon went online in 1995, technology has been blurring the boundaries between virtual and physical retail space. The third annual Cisco study of consumers found that nearly 80 percent of U.S. consumers use the Internet to shop. Armed with their smartphones, customers now walk into a store with much more knowledge and power in the palm of their hands than ever before, enough to keep retail executives up at night.

Nearly one out of three shoppers search on their mobile device before purchasing in store. Customers want to know if items are available in the right size, right color, and right now. These shoppers expect the same prices, products, and offers regardless of the channel being used (e-commerce websites, brick-and-mortar stores, or mobile devices). I’m surprised at how many stores really don’t know what’s in stock.  To keep up with today’s savvy shoppers, retailers need to update their inventory systems using signals from their supply chains, online presence, back rooms, and front stores in real time. And all of this is the in the context of shrinking customer spending, rising business costs, and competition.

With these monumental shifts in consumer behavior, it shouldn’t be a surprise that the biggest Internet of Everything (IoE) Value at Stake opportunities reside in extracting customer insights and creating better experiences. For years, retailers have trusted jGrubb-RetailCisco innovations to help them improve the store experience, increase supply chain efficiencies, and deliver a consistent multi-channel experience to their customers. Just last month, on stage at Cisco Live with John Chambers, I demonstrated Cisco’s location-based services to help retailers improve planogram and measure campaign effectiveness through the movement of customers. But there is much more that the Internet of Everything can do to address the two main goals of retailers: revenue and loyalty.

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