It’s impossible to predict the future, especially when it comes to the impact of technology on our lives. This has been true since the time of the very earliest human inventions, and in the modern era, we no longer need decades and multiple generations to see these changes; they are immediate and have the power to transform single generations many times over. Just consider how the personal computer, Internet, email, and mobile devices have changed our lives time and again. These innovations, taken alone, are extraordinary. However, the power they have unlocked by coinciding in time and the profound consequences of connecting people, places, and things—Everything—makes the potential of the future both unpredictable and boundless.
The ability for any company to stay well ahead of disruptions—whether to defend their own markets or to expand into others—is extremely difficult. And it is nearly impossible to do so consistently. This is because the nature of the innovation, the context, time or market in which it lives, as well as its cost, all play a role in whether it takes seed and matures. The better you can understand the factors that may make a lasting crop, the smarter you can be in choosing what field of soil to till, under what conditions to plant seeds and when the best time is to do either. This really amounts to making the best and most educated bets you can. In practical terms, these wagers can range from choosing the right customers to pursue to determining where you invest precious resources.
Some companies, including Cisco, have adopted robust build, buy and partner models to keep ahead of the market and inevitable disruptions that pose both threats to current market positions as well as offer powerful tools to enter into new markets. For Cisco, having an additional lens to help see factors a little better in order to make smarter bets, has long been part of the Cisco Investments approach. Putting capital to work through equity investments in start-ups and funds has helped to improve illusive visibility that can make the difference to catching critical market transitions—or missing them. Insights learned through equity investments into young and interesting companies on the bleeding edge of change helps Cisco gain valuable understanding of market trends, assess and develop better partnerships as well as strengthen relationships with other investors and partners that complement our M&A and organic development efforts.
Cisco Investments is one of the most active corporate venture investors globally and employs a disciplined balance between seeking strategic and financial return in each investment. Of the more than 75 companies in Cisco Investments’ current portfolio, most align directly to Cisco’s adjacencies across Core, Mobility, Security, Data Center, Cloud, Service Provider Video and Collaboration. These investments, which afford a unique and mutually beneficial connection between Cisco and start-ups, also provide key insight that unlocks partnership opportunities, rich customer dialogue and, in some cases, may lead to start-ups joining Cisco through acquisition. Most exits are through trade sales and IPOs such as the recent cases of Control4, Mavenir and Ring Central while a small number of investments over Cisco’s history have become candidates for Cisco M&A.
As the pace of market transitions accelerates, Cisco Investments is extending its reach to new frontiers that allows Cisco to gain yet greater perspective on, and to help shape, the disruptions that will define tomorrow’s world. It is very difficult to see these possible outcomes without a seat at the table through these investments. These opportunities enable Cisco to engage earlier in the lifecycle of a market and company while providing greater flexibility in how Cisco invests and whether we choose to do so directly or through LP positions in funds.
We believe the Internet of Everything (IoE) is one domain that will define a whole new era of architectures and applications. At the Consumer Electronics Show this week in Las Vegas, John Chambers announced that Cisco Investments has allocated $100 million to invest in early stage companies that will drive the evolution of the IoE. The companies we focus on will be innovating critical advancements in the key enabling technologies of the IoE – big data, the Internet of Things, and mobility – and will help our customers capture their share of the $19 trillion at stake over the next ten years.
Consistent with Cisco’s early history as a Silicon Valley start-up, our investment activity and focus on the future, give us a fun and exciting lens into the innovations that will, once again, redefine how we live, work, learn and play. If you are an innovative start up and have a potential investment idea, let’s start a dialogue. Contact the Cisco Investments Team or for general inquiries, please email firstname.lastname@example.org.
Hilton, you said “As the pace of market transitions accelerates, Cisco Investments is extending its reach to new frontiers that allows Cisco to gain yet greater perspective on, and to help shape, the disruptions that will define tomorrow’s world.”
The $100 million fund for IoE related investment seems logical, and somewhat “routine” for Cisco. Given the evolving marketplace that you describe, perhaps now would be a good time to also evolve the Investment Methodology as well.
My point: instead of just providing seed funding (money), consider providing the wisdom and experience of Cisco talent (uniquely skilled employees) to these start-ups. In my opinion, Cisco talent is an asset that’s being underutilized in this traditional angel/VC scenario.
Why not create a value-added program that combines both Cisco funds and appropriately skilled employees to the start-ups that the company chooses to fund? Mr. Chambers has said repeatedly that Cisco employees (~65k people) are the company’s greatest asset, so here’s an opportunity to tap your number one resource.
How do you find the best-fit talent? Last year Cisco asked all employees to update their skills and experience in the company HR database, so you already have an easy way to search for and match the current talent needs of start-ups (demand) with the Cisco employee talent pool (supply).
Therefore, I challenge Cisco to think beyond merely attempting to replicate a legacy angel/VC funding model for new IoE related business opportunities, by creating something more imaginative — fully utilizing a huge asset that most angel investors and VCs can’t offer.
This is your big chance to try something innovative, and re-imagine how Cisco can leverage ALL it’s assets to reap the raw potential of the Internet of Everything upside opportunity.
Be bold, by being differentiated in your approach. That’s what people expect from Cisco. Myself included.
Thank you for your comments. As a strategic investor, I think it’s actually crucial for Cisco to both gain new insights as well as to provide valuable development, commercial, and other benefits to portfolio companies. Therefore, in each of our investments, whether venture fund designed to find innovation in far-flung geographies or start-ups right here in Silicon Valley which may have close adjacencies to Cisco, we require active engagement from talented Cisco people across engineering, sales, services and other functions to learn from AND add value to our investments. It’s simply what we require as we set out on journeys together with our entrepreneurs and partners. In the coming months, we will be sharing more about how we intend to enhance our already strong engagement with our portfolio. Check back here regularly for more details as they become available.
Thank you for your thoughtful response to my points, Hilton. I’ll continue to follow this story, because it’s of great interest to me (I’m a Cisco shareholder).
Perhaps in future posts you could outline some of the IoE related start-up back-stories — i.e. how Cisco employees are helping these early-stage companies to gain momentum with their product and market development activities.
I’m eager to learn more about these new upside opportunities, and how the key parts of the business (Cisco subject-matter expert talent) are actively engaged in supporting this long-term IoE growth effort.
You talk about a chaos. The future informational model for everything is writing (NOW!!!) in a village from ROMANIA.
The current informational model (cloud, IoT, IoE,…) is a waste of time and money.
I would say that the actual models are not enough for tomorow and that new informational models are necessary and emerging.
The paradigm of Everything Connected via IPV6 does not scale up. It is not about putting more/bigger cables and enlarging the address space like IPV6 does. It is more about making things cooperate via various communication channels.
mailed to the e-mail address email@example.com but the return was done.
New technologies to dominate the world of tomorrow, information and advertising would mark the direction to be followed in the creation of new jobs
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