WebexOne 2024—Key Takeaways

At last week’s WebexOne conference, Cisco’s rapid transformation and the impressive comeback of its collaboration business were evident. Over a three-day event, Cisco showcased its industry-leading innovation, growing market momentum, and an end-to-end, differentiated AI vision. 

Jeetu Patel, Cisco’s EVP & Chief Product Officer, summed it up well in his LinkedIn post after the event—“Four years ago, this business was in decline… the NPS score for Webex was an embarrassing score that hovered around 20…today, this business is in growth mode, reliability is off the charts, and the NPS score is close to 70.”

Cisco’s collaboration business has clearly turned the corner and is winning in a highly competitive market. This is evident in its recent performance, including double-digit growth in orders for collaboration products in the last quarter (Q4 FY24), a fast-growing installed base that is now at 16M+  calling users and 100M+ Collaboration devices, and the success of Webex contact center, which is Cisco’s fastest-growing product with 75% growth in seats in just the last 12 months.

The “One Cisco” Advantage

Though Cisco’s unified vision and narrative across its many businesses and product lines has been in the making for many years, it is now finally taking shape. In most customer environments today, networking, security, and collaboration are intertwined, and Cisco’s tightly integrated solutions address these needs, especially as organizations increasingly leverage AI and big data sets across the organization.

Cisco recently brought its Networking, Security, and Collaboration teams together as one organization led by Jeetu Patel, whose expanded role and vision promises to take the combined portfolio to new heights. This move signals Cisco's commitment to streamlining innovation and providing integrated, end-to-end solutions rather than siloed products. Going forward, Cisco plans to expand on this vision with the full integration of Splunk into this new organization.  

Today, Cisco’s collaboration business offers a comprehensive suite of audio-video conferencing, messaging, calling, and contact center complemented by industry-leading communication devices and robust Control Hub management. But what truly sets Cisco apart is the integration of these products with full-stack observability powered by ThousandEyes and its multi-layered security framework, which extends from network infrastructure to individual applications and devices. This unparalleled integration creates a comprehensive solution that few in the industry can match.

Purpose-built Innovation

Cisco Webex has always been known for its industry-leading innovation. Last year, after the WebexOne event, I had said, “Webex's innovation is ahead of the market by 6 to 12 months”. The announcements at WebexOne this year reaffirmed the company’s commitment to winning through innovation.  However, a big difference this year was that we heard not only about innovation velocity but also about “innovation with purpose” that adds real, measurable value to customers. This is particularly relevant now as more and more customers are demanding proof points on AI’s business outcomes and tangible value.

As AI nears the end of its hype cycle, customer focus is shifting from adopting leading-edge innovation to purposeful tech adoption driven by measurable business value and usage metrics. In his keynote, Anurag Dhingra , SVP & GM of Cisco Collaboration, detailed the power of thoughtful innovation based on usability as a success metric. He said that when Cisco builds a new feature, the bar for his team is—does anyone care; is anyone using it, and what metrics are the customers using to measure success? The demo of one of Webex’s early AI-powered features called “rewrite message” and the process of reiterating and redesigning the feature until its usage went from 2.5x per week per user to 12.4x, showed how the Webex team applies design rigor and lessons learned to stay focused on enhancing user value while innovating at speed.

Impressive New Product Announcements

Among the many new product announcements at WebexOne, the ones that stood out for me are:

• Webex AI Agent: Virtual agents are not new.  However, much work needs to be done to make them more usable and practical. According to Frost & Sullivan’s recent global survey, 33% of the decision-makers report that the inability of the bot to understand the customer and poor error recovery are the top challenges in adopting virtual agents. The demo of the new Webex AI Agent, a completely autonomous AI agent for self-service, stole the show in the keynote. It is a big step forward in delivering more human-centric and natural AI agents. The Webex AI Agent connects to workflows and back-end systems, enabling faster information retrieval and resolution. Both for Webex AI Agent and AI Assistant, hyper-personalization and customization will be critical to continue driving AI's value. Alpa S. , who leads Frost & Sullivan 's CX practice, mentions in her takeaways, “Customers continue to be frustrated by bots that do not understand them. What stood out about the Webex AI Agent is the human-like interaction with the self-service tool. This tool seems to overcome some key challenges customers face when using bots. Plus, the integration with back-end systems is a key differentiator.” She adds that selling the three workflows (Proactive Journeys, AI Agents, and Human Agents) separately is a smart move, allowing partners to implement Webex Contact Center where/when they can.
• Cisco Spatial Meetings for Apple Vision Pro: Further extending its deep partnership with Apple , Cisco announced Spatial Meetings for Apple Vision Pro, which opens new possibilities for future meetings. In my demo, I was especially impressed with how much more natural and fatigue-free the meeting felt compared to my experiences in the past with similar products, including the Webex Hologram with Microsoft HoloLens. Available now to work with the existing Room Bar Pro device, which has an installed base today of 28,000 rooms, Spatial Meetings add depth and dimension in a 3D experience that can redefine use cases like remote training, troubleshooting, design, and education across various industries like healthcare, manufacturing, and retail. Life-like video meetings that bridge the gap between virtual and personal experiences are a huge white gap in the market, and many emerging technologies are looking to tap into it. While 3D experiences are not meant for every meeting, a truly frictionless user experience can move them from a niche application to broader market success.

Among the other announcements, the new Cisco Ceiling Mic Pro, an AI-powered ceiling microphone with adaptive beamforming, is a net-new direction for the company, opening opportunities for a significant new revenue stream. The product meets the growing customer demand for plug-and-play intelligent audio solutions that reduce the set-up time and offer a single pane of glass and centralized management. Cisco also launched a Workspace Designer tool, a self-service, interactive,  visual tool that helps customers design their meeting spaces in a matter of minutes by selecting the right products, furniture, and platform based on their preferred criteria, allowing them to move from a blank slate to a fully designed blueprint that accelerates the decision-making cycle.  Currently, the tool requires the user to select several parameters. It would be interesting to see if it will evolve to make intelligent recommendations based on specific customer needs by use cases. My colleague Christopher Pennell , Industry Principal, Connected Work, shares great insights in his blog on these new products https://bit.ly/3YxZQDl.

Ongoing Momentum for Video Devices

On Day 2, Snorre Kjesbu , SVP & GM of Cisco Collaboration Devices, presented the keynote highlighting Cisco’s strategic approach to enabling innovations across Webex’s suite of services and a broad portfolio of Cisco devices. Rapid AI innovations across its full stack of software and devices, combined with Control Hub, ThousandEyes, and Cisco Spaces integration, have led to a strong workplace-enablement story for large, global enterprise customers and the public sector. Unique to Cisco’s collaboration devices is a deep partnership with NVIDIA, which Cisco has leveraged since 2015, enabling it to launch industry-leading video, audio, and speech intelligence and other innovative AI features.

Cisco’s partnership with Microsoft , allowing users to run Microsoft Teams natively on a broad portfolio of Cisco Room and Desk devices, is a key driver for its growth in devices. The partnership has opened up new opportunities and has resulted in significant customer wins for Cisco devices. Cisco has announced that it now has over 3,000 joint customers using Microsoft Teams, a significant increase from 2,200 in February. This year, accelerated momentum for its video devices business has led to significant market share growth. Frost & Sullivan's data shows that despite intense competition, Cisco remains the clear leader in the global room video endpoints market and holds a revenue market share of more than twice that of its nearest competitor.

Sustainability is a key aspect of Cisco devices. A recent Frost & Sullivan survey of ITDMs found that sustainability is becoming a top decision-making criterion in tech purchases. 20% of the ITDMs report that sustainability is a top priority at the highest levels of leadership, and an additional 22% say they have created dedicated departments to implement sustainability initiatives. In a breakout session for analysts. Gavin Ivester , Sr. Director of Design and UX for Cisco collaboration devices, presented Cisco’s holistic sustainability vision. The session was eye-opening, particularly on how sustainability is built into every aspect, from design to manufacturing, packaging, product longevity, and reusing/redeploying end-of-use hardware to advance a circular lifecycle. Cisco has set a goal to reach 52% PCR content in FY 2025 across its product lines. Its collaboration portfolio (phones/video) is close to the goal already, and specific video device SKUs such as Room Bar and Room Bar Pro already meet the targets at 56% and 63%, respectively. Cisco devices support smart power management, energy consumption, and carbon footprint estimations through the Control Hub. Finally, they are designed with longevity in mind and offer easy return and refurbishment programs.

While I haven’t covered every aspect of the event (there were numerous valuable sessions), I was impressed by the breadth and depth of Cisco's presentations. The collaboration business is clearly firing on all cylinders, leveraging AI to create a company with a formidable full-stack advantage. However, there are a few areas that need attention:

• SMB Strategy: Cisco must continue expanding beyond the enterprise and public sector markets. The SMB segment remains an underpenetrated opportunity, with strong demand for simple, affordable, easy-to-use communication solutions.
• BYOD Solutions: I would have liked to hear more about Cisco's positioning for organizations investing in manageable and cost-effective BYOD experiences for meeting rooms. As I've often said, BYOD is here to stay; recognizing it and making it a part of the end-to-end solution portfolio will be critical for long-term success.
• Portfolio Complexity: As Cisco expands its portfolio and emphasizes cross-platform integration, it must ensure that the growing ecosystem doesn't become overly complex for customers to navigate and implement effectively.