After Google, Cisco is giving up its smart cities subsidiary

Cisco has officially decided to end its smart city efforts. In the midst of a global pandemic, cities no longer have the resources to fund their projects while Cisco is in the process of restructuring. Google made this decision back in May by dropping its Sidewalk Labs subsidiary. She was working on a smart neighborhood showcase in Toronto.

Cisco and Smart Cities, an old story

A Cisco spokesperson formalized the separation of the network equipment company from smart cities in a statement to the Wall Street Journal: “We recently decided to stop selling and support the Cisco Kinetic line of products. for City, in order to tailor our investments to market needs and customer requirements. “Cisco Kinetic for City is precisely the Cisco subsidiary that was active in this area.

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Smart cities are nonetheless the promise of a futuristic urban landscape that is being changed by technology: transport, administration, public infrastructures, networks, all of which are interconnected in an ecosystem of objects and services. The term was popularized in 2005 by former US President Bill Clinton, who called it a challenge to creating more sustainable cities … for John Chambers, then CEO of Cisco.

Chuck Robbins, who took over in 2015, saw this as a promising new market that Cisco wanted to lead to the sale of software services. In 2016, Jasper Technologies bought Jasper Technologies for $ 1.4 billion to strengthen its expertise in the Internet of Things, which is closely related to smart cities. The following year, Cisco Kinetic for Cities was launched with the announcement of a billion dollar program to help cities use technology to transform their neighborhoods.

The pandemic changed everything. According to a former Cisco executive, the smart city market was already precarious between hard-to-quantify ROI and disparate technologies for collaboration. The health crisis didn’t help by digging holes in the city’s budgets. According to an estimate by the National League of Cities, which includes a large number of American cities, 65% of them have delayed or canceled infrastructure projects.

Complete restructuring abandonment

Unlike Google, which went all out in Toronto for a $ 1 billion worth of a smart neighborhood that doubles as a storefront, Cisco has chosen various partnerships with cities in different countries. The company has already announced that it will not give up on them and will work with them on the connectivity and security of their networks.

This is exactly where Cisco would like to re-concentrate. The company, which released tax results that disappointed Wall Street, decided to focus on security services, which were particularly in demand, during this era of massive teleworking. Chuck Robbins announced a reorganization of the company with the goal of cutting costs by $ 1 billion through downsizing to keep pace with customer demand. In the Smart Cities space, Cisco has pledged to continue supporting companies that deliver innovative urban technologies.

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