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Cisco Killing Cius Softly
A little over a year ago, at Enterprise Connect 2011, Barry O'Sullivan of Cisco told a keynote audience that, one year hence, the company's Cius tablet would be its single largest-selling endpoint. Instead, just over a year after O'Sullivan made that prediction, Cisco has decided to kill the Cius.
The announcement came in a blog post by Cisco's 2012 Enterprise Connect Cisco keynoter, OJ Winge. Here's the key takeaway paragraph:
"Cisco will no longer invest in the Cisco Cius tablet form factor, and no further enhancements will be made to the current Cius endpoint beyond what's available today. However, as we evaluate the market further, we will continue to offer Cius in a limited fashion to customers with specific needs or use cases."
So, technically, not killing Cius. But there's no reason to expect Cisco will expend much effort to sell the tablets from here on in.
Instead, Winge wrote, Cisco will focus on its software communications platforms--the Jabber UC client and the WebEx conferencing system.
Though there were no rumblings of the move outside the company, it shouldn't come as any surprise. Cisco has been shedding hardware businesses that straddle the consumer and enterprise worlds, similarly dropping the Flip video camera and umi home telepresence system. Cisco will always be a company that depends on hardware--routers, desktop phone sets, and servers, to name just a few of its most lucrative products. But Winge's announcement clearly shows that in the world of communications devices, the only money to be made in hardware is if you happen to be a manufacturer of consumer devices or traditional phones.
It's clear that there is no such thing as a general-purpose enterprise tablet, any more than there is an enterprise smartphone. Enterprise communications vendors may still compete to run high-value software on consumer devices, and they may be able to integrate their communications systems with applications that run on those consumer devices; but they've learned the hardware game is tough for them to compete in.
One interesting thing about the timing of OJ Winge's announcement is it came out the same day that Polycom announced a major corporate refocusing that, as Zeus pointed out in this post, recognizes much the same reality that Cisco bowed to with its Cius decision: It's all about software now.
I said above that there's no such thing as a general-purpose enterprise tablet, but as OJ Winge notes in describing the limited scenario for continuing Cius, enterprise tablets may well live on as an extremely niche-y product, distinguished by physical form factor adaptations to accommodate specific use cases--an obvious example being ruggedized units for field workers in industries like public utilities
Next Page: How Cisco got it so wrong
You do have to wonder, though, how Cisco could have gotten it so wrong with Cius.
In thinking about this, the first thing I want to do is give major props to Doug Carolus of Pace Harmon consultancy. Last October, Doug wrote a piece for No Jitter entitled, "Why Cius is a Risky Play for Cisco," which I strongly recommend you check out. Doug detailed some of the nitty-gritty reasons why Cius was an expensive investment for the enterprise when compared with Apple or Android tablets. Here's what Doug wrote on that point:
"Cius's one-time (hardware and licensing), recurring maintenance, professional services, and potential network remediation costs make it an expensive option compared with alternative consumer tablets (a 64GB iPad with Wi-Fi/3G and a 9.7" screen is ~$800). Given the constraints on IT budgets and resources, I don't see a compelling argument to justify the additional cost for this device."
Even more prescient was another reason that Doug gave for doubting Cius's prospects:
"With the potential slow adoption of enterprise tablets and Cisco's impatience with products/services not delivering profitability fast enough (e.g., Cisco Mail (PostPath) and its consumer Flip camcorder), it is difficult to imagine Cisco/John Chambers waiting years for Cius to be profitable."
Also, check out the comments to Doug's post--our readers provided some great supplementary analysis.
(Cisco's decision also vindicates the Alcatel-Lucent exec whose flair for the language last year led him to call enterprise tablets a "stupid" idea.)
I think one reason why Cius looked compelling was that, when a lot of us looked at it, we didn't see a tablet, but instead saw the screen of a desk phone that could now reside in a docking cradle equipped with a traditional handset, and could snap out and be taken with you for mobility at least within the office. That seemed like it could be a pretty cool way to evolve a device that appeared antiquated and very much in need of a major overhaul.
It turned out, however, that none other than Cisco themselves found it much more lucrative to just keep on selling those old-fashioned kind of desk phones, which as OJ Winge pointed out this spring, they are doing in record numbers. As Doug Carolus pointed out in his article, it'd be hard for Cisco--or any vendor, for that matter--to justify continued investment in the uphill struggle of breaking Cius into the market, when the customers clearly wanted desk phones from Cisco and tablets from Apple and the other consumer manufacturers.
So the Cius is, for all intents and purposes, dead as a meaningful product from Cisco.