Cisco Systems will launch its second software as a service offering next year, one which it says will let media companies create online communities that will be hungry to download their content.
Called Cisco Eos (Entertainment operating system), the hosted service will see content providers paying the networking company an unspecified fee based on ad revenue, Daniel Scheinman, senior vice-president and general manager of Cisco’s media solutions group, said Tuesday at the company’s annual strategy conference for industry analysts.
“It’s going to be the first play that bundles together three things that media companies need to make personalization work,” he said: The ability to create a Web community with blogs and other messaging capabilities, content distribution and an enrolment engine which can look at usage and make recommendations on the content to be delivered to each subscriber.
Cisco has come up with the strategy to help content distributors not only draw revenue from what they control, but multiply the opportunities by taking advantage of Web 2.0 technologies.
Cisco has been piloting the application with the NASCAR and National Hockey League sports Web sites and already has discovered the unusual connections that it says will lead to increased downloads of revenue-producing material.
For example, as an experiment Warner Music let musician and hockey afficianado Kid Rock post a music video on the NHL site. Normally one wouldn’t associate music and hockey, but Scheinman said within a short time there had been 20,000 downloads of the video. Now, he said, Warner realizes it can launch videos on a hockey site, he said. Scheinman argued that creating online communities of people with shared interests is a great way to sell video content.
“Community,” he told the analysts, “will be like oxygen — everywhere.”
Cisco’s job is to try to create a “next generation-entertainment experience” by leveraging its experience in network infrastructure and making connections so media companies can create new business opportunities for selling content.
From its testing so far “we’ve learned that your relationship to that content tells a lot more about you that your relationship with your friends,” he said.
That knowledge will help Cisco differentiate itself from other vendors trying to enter the field, he claimed.
Cisco’s other software as a service offering is WebEx, which allows subscribers around the world to collaborate.
Also at the conference, Cisco executives tried to convince analysts it is serious about boosting the importance of software in its offerings. Long known as a switch and router manufacturer, the company has been saying recently that it needs to improve its software image among IT buyers and software developers building applications.
One piece of news revealed here that may make a ripple is that Cisco will shift the code base of its venerable IOS operating system, which runs those routers and switches, onto a Unix operating system so other applications and services can run in the same environment.
Alan Baratz, senior vice-president of the company’s network software and systems technology group, said it will also open interfaces to a number of IOS protocols so security, wireless or policy services can communicate with them.
He didn’t say when the changes will be delivered.
Baratz also said Cisco is also moving to shave the number of versions of IOS that network managers have to deal with. Acknowledging that Cisco has allowed IOS to “fragment,” he said the company is working on “compartmentalizing” the operating system so there’s only one version of any given functionality.
He didn’t say when this will be released.
At a panel discussion on the company’s software efforts and expertise, executives made sure to point out that Cisco’s hardware sales couldn’t have taken place without the software that makes the switches and routers run. More than half of the company’s developers are software engineers, said Don Proctor, senior vice-president for Cisco’s software group.
“We’d like to be able to say in a few years down the road that not only has Cisco distinguished itself as a great IT company, but also as a great software company,” Proctor told the audience.
However, in an interview later, Forrester Research analyst Robert Whiteley said that it will take at least 10 years for Cisco to become a leading software company unless it buys a leading applications firm.