In an article back in the summer of 2010, I wondered whether Cisco
However, IT departments typically spend long periods of testing before adopting new devices and were still leery of accepting the iPad as a serious business tool. Could Cisco swoop in under the banner of security and position Cius as a more trustworthy business tool before the iPad consolidated its position as the preeminent tablet in corporate America?
What exactly was Cisco offering?
Today we know how the story ends. The Cius was dead before it hit the market. Within a year, almost every Fortune 500 company had either deployed iPads or was piloting programs to use them.
Cius had faults of its own that caused its failure. Cisco had hoped tie-ins with its collaboration tools such as video conferencing would make it a serious business tool. The idea of built-in collaboration was never a compelling enough draw, as more lightweight solutions like FaceTime or Skype are widely available, and even Cisco's WebEx is available on Apple's App Store.
More importantly, Cisco had hoped the eventual end game for business tablets would be that of a thin client. That is, you could use a mobile operating system on the run, but when times called for serious productivity, you could use virtualization to tap into a PC-like environment. The thin-client concept never took off. Finally, the product didn't hit market fast enough and was only sold through Cisco account representatives.
However, even if Cisco had executed beautifully with Cius, the fact remains that it would have failed. It was swimming upstream into the rapids. Apple was changing the very foundations of business spending.
The Cius was dead before the ship even sank
In its blog post announcing the death of the Cius last week, Cisco cited one key factor in its decision: IT has seen a monumental shift, and the line between workplace and consumer devices is rapidly fading. Cisco's own studies showed that 95% of organizations allow employee-owned devices in some way, and 36% provide full support for employee-owned devices. Both figures would both have been heresy in the IT environment just years ago.
The movement is called BYOD, or bring your own device. In Cisco's findings, 88% of IT leaders are seeing BYOD growth in the enterprise, and the vast majority see that as a good thing. Cisco saw the writing on the wall and got out of the tablet space. There's more money to be made trying to promote the trend and offer its collaboration solutions like WebEx rather than compete directly with Apple. Research In Motion
Apple's game to lose
The broader trend here is bigger than BYOD, it's the "consumerization of IT" as we know it. Like never before, consumers want their devices in the enterprise, and IT companies are forced to accommodate. The most obvious implication is this is very good for Apple. Government and business spending on personal computers was $84 billion last year, according to Forrester Research. Apple collected 14% of that spend last year, which might not sound like much until you realize it collected only 3% of all business computer spending in 2009!
As I detailed in this video on how Apple achieves its growth over the next two years, an increase in businesses buying Macs and iPads could constitute 25% of the company's growth (or more). That level of growth isn't even considering how the consumerization of IT is boosting iPhone sales as well.
This is huge.
Who else has something to lose?
Another consideration is what Cisco's failure means for technology design in general. At the time of Cius' release, its main appeal was that the thin-client model could give users access to more. With the iPad being a new sensation at the time of its announcement, business users were still unsure of the trade-off of giving up functionality.
The thin-client model was to provide a nice mobile/PC hybrid and fill that gap. Yet we've seen that businesses use iPads differently than PCs. The appeal of the "thin client" model to access a more "robust" PC environment proved unappealing. People wanted tablets for targeted needs like quick browsing and apps. We've seen a number of business-heavy applications like business intelligence suites make a transition to tablets by using specialized apps.
Putting it all together
Cisco's Cius was never a serious contender and never had anywhere close to the resources either Google
Apple is the largest company in the world, and it's still managing to surprise.
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Eric Bleeker owns shares of Cisco. The Motley Fool owns shares of Cisco Systems, Apple, Microsoft, and Google. Motley Fool newsletter services have recommended buying shares of Google, Microsoft, and Apple and creating bull call spread positions in Apple and Microsoft. The Motley Fool has a disclosure policy.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.