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.