Partners 'All In' On Cisco's AI And Machine Learning Investments

Cisco partners say the networking giant is making a bigger bet on machine learning and artificial intelligence as major enablers to transition into a software and services-centric company.

The San Jose, Calif.-based network leader unveiled on Thursday its plan to acquire Perspica, a startup specializing in the use of machine learning to analyze streams of data in order to provide visibility throughout the entire application infrastructure stack. Perspica's technology and team will be injected into Cisco's AppDynamics division.

In May, Cisco spent $125 million on the acquisition of artificial intelligence startup MindMeld who built a platform that makes it possible for companies to create intelligent conversational interfaces for any app or device. MindMeld is being integrated into Cisco's flagship unified communications solution Cisco Spark in an effort to "bring voice AI to meeting rooms".

[Related: Cisco Launches 'Next-Generation' Services Powered By AI]

Just this week, Cisco launched a slew of new services powered by AI and machine learning that can anticipate IT failures, mitigate risk and reduced maintained costs for businesses. On Wednesday, the network leader teamed up with McAfee for AI-powered cybersecurity.

"The momentum that's behind machine learning and AI, there's a whole lot of opportunity there because if players like Cisco acquire these companies and make their solutions better by picking up these niche players, the overall message becomes a whole lot better," said Faisal Bhutto, vice president of enterprise networking, cloud, and cybersecurity for Computex Technology Solutions, a top Cisco partner.

"These bets Cisco is making on AI, machine learning, what the Internet of Things creates – that's what's going to help the business move more to software subscription services than the traditional hardware," Bhutto.

Cisco's push to tuck-in intelligence across its large portfolio was front and center in the company's biggest announcement of 2017, the Intuitive Network, an intent-based networking system that anticipates actions, stops security threats and continues to evolve and learn.

The subscription-based platform represented a significant shift in transforming Cisco into a software-centric vendor through new automation, encrypted traffic security analytics, machine learning capabilities and a new IOS, to name a few.

"[Cisco] is trying to have intelligence in every conversation. You saw that in the Intuitive Network, Perspica is another piece of the puzzle – they're trying to solve line of business problems faster," said one top executive from a solution provider who is a Gold Cisco partner, who did not wish to be named. "They're pushing that AI, automation, real-time message. You can see it in their commercials, every Cisco event seems to have 'intelligence' in the theme … so bringing intelligence up the entire IT stack."

The subscription-based Intuitive Network platform represented a significant shift in transforming Cisco into a software-centric vendor through new automation, encrypted traffic security analytics, machine learning capabilities and a new IOS, to name a few. Cisco spent $610 million in August acquiring software-defined WAN specialist Viptela to further this strategy.

The executive said Cisco's go-to-market messaging around technology like AI and the Intuitive Network isn't resonating in a big way with customers quite yet, saying its "confusing" to "many of our customers when we try to start that conversation."

"But this is just the beginning of Cisco's transformation. We're all in. I think we almost have to be [because] it's where they're going and where they want partners to invest in," said the executive.

Computex's Bhutto said Cisco is moving beyond the term "solution selling" by pushing solutions that have been injected with intelligence.

"It's, 'How about we build an intelligent solution, not just build any solution,'" said Bhutto. "A large company like Cisco will have to make these acquisitions [like Perspica] to have a comprehensive portfolio on that front."

Perspica's combination of online machine learning algorithms and real-time streaming analytics allow companies to automatically baseline system performance to identify what is normal and rapidly flag actionable alerts while providing full-stack observability, according to the company.

Partners expect the networking giant to make similar acquisitions like Perspica on the AI and machine learning front that can be quickly be implement into existing products.

"These are the right bets Cisco is making," said Bhutto. "We saw the beginning of this when ACI (application centric infrastructure) was launched, more about application control and moving the network layer up to talk to applications, then subsequently you see the intuitive network and all the innovation that they've done. I think it's the right investments, especially if they want to drive the subscription software services business."