Article

Cisco's debut year in digital signage

A Q&A with the networking giant about digital signage.

January 22, 2008 by James Bickers — Editor, Networld Alliance

Cisco made waves in the digital signage space in 2007 with its acquisition of software company Tivella, and its subsequent debut of a turnkey hardware and software package. Digital Signage Today contributing editor James Bickers recently sat down with Thomas Wyatt, general manager of Cisco's digital media systems business unit, to get his view of the past year and the ones to come.

 

Thomas Wyatt, general manager of Cisco's digital media systems business unit.

DST:2007 felt like Cisco's "coming out party" for digital signage. How was it?

 

Thomas Wyatt: I think we've been incredibly encouraged, based on what we've seen in the market. We've been in the market less than a year now, and we've signed up more than 400 customers. It's one of the fastest growing new product categories in Cisco's history. When you talk about a company that's traditionally been routing and switching and voice and security and wireless, moving into a brand new adjacency like digital signage is always a challenge. We've been very excited with the momentum that we're seeing in the market.

 

Customers understand that when you're talking about video or you're talking about digital media, it's much more than just a silo-ed application. Digital signage is a great app, but it's just one of several that can run over a network. So what really begins to resonate with customers as we begin to talk about how they can use digital signage for marketing or corporate communications or training or advertising, is that at the same time they can use the same software and platform to do other applications as well.

 

DST:The digital signage industry is filled with hundreds of small companies, and this was the year that many of them got scared to death, and excited at the same time – they've watched the Ciscos and the Googles and the Microsofts dance around the space. A lot of people thought this was the year Cisco was going to start buying up companies like crazy.

 

Wyatt: As you know, we made one small acquisition of Tivella. Our strategy for development is continuing to be evaluating where internal development works, where partnering works and where acquisition works. From time to time we will do acquisitions if it makes sense, if we think there's some compelling value proposition that a company can bring to Cisco. But a lot of our development work has been internal development, and that seems to be the strategy going forward.

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DST:I've heard it said that the barrier to entry to the digital signage software business is fairly low, because it's not that hard to create software that runs and schedules rich media. Is software for digital signage an area that you think Cisco has pretty well covered, and there's no real need for further acquisitions?

 

Wyatt: I wouldn't rule anything out. We're going to explore different businesses and different opportunities. There's the basics of digital signage, and then there are the adjacencies that we can consider. But I think if you think about the tech itself, the software app layer is an important layer, and one that I think we've got a good handle on. But it's also looking at video distribution.

 

Video is an art, not a science. That's one of the things that we've learned, and one of the reasons why we've done a number of acquisitions in this space. And we've learned from that, that you bring in these experts who've been thinking about video for 10, 15 years to help Cisco round out its strategy – that's been core to where we think we can take this market.

 

DST:What is your primary focus for 2008?

 

Wyatt: We're going to continue to do what's working. Anytime you enter a new market you learn from listening to your customers. We've seen a number of our customers really start to push the envelope in the ways that they're thinking. The size of our deals has grown significantly, especially in the last three months. We're going to continue to follow where we think the market is heading. We're very optimistic about it.

 

For the last three or four years, digital signage has been kind of experimental – people would start off with 20- or 50-unit pilots. We're really starting to see some bigger deals. We've got a number of customers deploying thousands of units, and I think that's showing that there's real ROI and real scalability.

 

DST:You mentioned 400 new customers this year – what are the main industries you're seeing activity in, and what are they using digital signage for?

 

Wyatt: Financial services, retail banking is a big area for us, and retail as well. We're also seeing apps in government. Education is another big area. It's got broad applicability across verticals.

 

We put out a press release in September, saying "In less than a year, 200 customers," and since then it's doubled. That shows you the momentum that is building for this technology. Anytime you enter a new market, companies want to get a sense of how mature your product is, and how committed you are to the business. I think customers are starting to realize that Cisco is there for the long run.

 

DST:Your product integrates with desktop video – how many of your customers are doing that, and how many of them are just using it for digital signage?

 

Wyatt: A very high percentage of them are buying both, but it's not always at the same time. In some cases, customers are purchasing desktop video first and then saying, I want to take my corporate communications and deliver it to break rooms and lobbies. I don't have data off the top of my head, but probably 25 percent of our customers are doing both. But out of those 400 customers, the majority of them do start with signage first.

 

DST:Do you have an interactive piece right now?

 

Wyatt: We are launching interactive very soon. More information to come.

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