Another giant of tech hardware aims to make money by selling insights.
Cisco Systems announced Thursday what it calls “connected analytics,” a mix of hardware, software and services based on sensor data. The idea is to offer rapid analysis of fast-changing information, like the people moving through a store, or beer sold in a stadium, so that companies can respond in time.
The strategy may also be a way for Cisco, which celebrated its 30th anniversary Thursday, to extract more money from the data transmission networks it has installed for customers.
Connected analytics involves a significant amount of computer processing of data near the action, on machines tied to the Cisco network. Cisco argues that this is faster and more efficient than sending everything to a central processing computer.
“Analytics is still highly centralized, but data is decentralized,” said Michael Flannagan, general manager of Cisco’s data analytics business. “There will be more and more use cases where analytics at the edge will be important.”
He cited a large retailer that tracked movements of people through its stores. When many people shopped in the frozen food section, it indicated that they were about to check out. (You wouldn’t want that stuff melting in your basket while you buy crackers.) That was a sign to increase the number of available cashiers. In the case of a soccer stadium, Wi-Fi information from cellphones could tell about people’s movements and consumption.
“Do fans in the club seats behave the same as those in the nosebleeds?” Mr. Flannagan said. “You have information on application data, how often people are checking Facebook.” While it is up to the customer how to use this data, he noted, “you can go to Big Brother really quickly.”
Cisco’s aim is almost certainly cash, not coercion. The company also sells analyses of how its own data network is running, so customers can operate their gear more efficiently. In elementary cases, it’s likely that connected analytics will not even need new hardware on some Cisco networks, but it does make the gear more valuable to a customer.
The Cisco announcement is part of a broader trend by mature tech companies to make new businesses by looking at the behavior of machines and people. Mr. Flannagan’s group, created as a part of Cisco’s services division just six months ago, already has 450 people.
Earlier Thursday, General Electric announced a deal with SoftBank of Japan to resell G.E.’s analytics product, called Predix. SoftBank was a particularly attractive partner to G.E. because it is a telecommunications service provider. If you are already shipping the bits, perhaps looking at them is a natural fit.
The G.E. business is primarily built around insights from industrial machinery, like power generation equipment. While Cisco’s examples deal primarily with human behavior, the company has also sold analytics for things like oil rigs.
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