Cisco Systems Inc. is stepping up efforts to target vertical industries with a tailored set of networking suites that feature a range of partners providing value-added applications and services.
The San Jose, Calif., company last week launched its first formal networking solutions targeted at the transportation industry, but it also has its sights set on other verticals such as manufacturing, retail, finance, health care and government.
"In each industry, the business objectives are different, but the commonality is building a strong backbone with [integrated] wireless technology and security and using the network as a common foundation," said Pierre-Paul Allard, vice president of Ciscos Enterprise Solutions.
The goal, Allard said, is to become more focused on the "business elements" instead of technology elements and integrate networking technology at the solutions level.
The move makes sense, analysts say. A recent survey found that revenues in the U.S. router market this year will shrink by as much as 6 percent.
"People recognize the network is just plumbing and its applications that solve problems [according to] senior management," said Tom Nolle, president of Cimi Corp., a Voorhees, N.J., consultancy. "By linking applications to the network, they are creating a package that can be sold to senior management instead of at the technical level."
By teaming up with systems integrators or application providers that are viewed as trusted advisers in each industry, Cisco and its partners can help enterprises save money and offer new revenue-generating services.
As part of its Cisco Intelligent Transportation Solutions, Cisco teamed up with SITA, the international telecommunications society based in Geneva, to build a new, common-use infrastructure at Torontos Pearson International Airport.
"Instead of each airline and other tenants stringing their own networks in here, weve been able to put in one backbone network and save millions of dollars," said Jim Burke, vice president of IT and telecommunications for the airport. The network supports voice over IP, video surveillance, a VPN for each tenant, wireless access and passenger processing.
In the transportation sector, Cisco will face some tough competition. The transportation industry is dominated by Siemens AG and Alcatel S.A., according to Frank Dzubeck, president of Communications Network Architects Inc., in Washington.
"Verticalization is very difficult because of the amount of alliance partners you have to have. All the money is in the integration. This is an interesting approach, but unless [Cisco] becomes an integrator, this effort may be halfhearted," Dzubeck said.