Cisco CEO Chuck Robbins explained how the Internet of things will help his company grow.
To hear Cisco CEO Chuck Robbins tell it, businesses are just as confused today with the latest technology trends as they were in the 1990s.
Caught off guard by the Internet’s rise in the 1990’s, companies are now uncertain about how to deal with another more recent innovation: the Internet of things, in which devices like toasters and assembly lines are connected online. Corporate executives have invariably heard about the benefits — the ability to glean more data and then use it to make better business decisions — but many of them have no idea about to get started, Robbins said.
“I do believe this is bigger than the first wave of the Internet,” Robbins said Monday at Cisco’s media day in predicting that 50 billion devices will be connected online by 2020. “It has to be.”
The networking giant is betting that it can make money by helping companies build technology infrastructure to accommodate the deluge of connected devices and the data that comes with them. Just in case customers failed to understand the sales pitch, he struck an ominous (and self-serving) chord: Companies that fail to innovate quickly enough risk being passed up by “six people in the garage” who are creating the next Uber or Airbnb.
For a company that gets most of its revenue from selling networking gear, Robbins said surprisingly little during a day of presentations about hardware being critical to Cisco’s push into the Internet of things. Instead, he focused on the importance of data analytics services, security, and his company’s effort to create more flexible software.
“Everything we build will be programmable,” Robbins said about building more products that work well with software from other vendors.
This emphasis on software isn’t that surprising considering that analysts have slammed Cisco for falling behind other rivals as it focused more on its networking hardware. Clearly, Cisco now also wants to be known for its software too.
Cisco’s recent appointment of a former top Salesforce.com executive, Kevin Bandy, to become the company’s chief digital officer is one example. Bandy emphasized to Fortune that he has spent much of his career in enterprise software and that part of his new role at Cisco is to help the company create a bigger business of selling software and subscriptions.
Although Robbins didn’t talk much about the company’s core networking hardware business, he did acknowledge the competition. Hewlett-Packard HPQ , Dell, and others have been building barebones networking equipment that comes loaded with software from startups.
Analysts worry that the tactic could erode Cisco’s dominance in the market. After all, why buy Cisco’s gear when you can buy cheaper alternatives?
Robbins, who took over as CEO in July from longtime leader John Chambers, said Cisco does “not have religion on how this plays out,” referring to customers buying a competitor’s product. But he said that Cisco’s technology would be “open” so that it can work with other technologies.
Robbins pointed to the company’s $2.7 billion acquisition of security firm of Source Fire in 2013 as a signal that the company means business when it comes to creating new security services and tools. And he said to expect more acquisitions in the area of security and cloud computing to take place in the near future.
With IBM on Monday announcing that it bought a cloud startup called Cleversafe, it’s clear that it’s not just Cisco who is thinking of using acquisitions to improve on its technology and add staff.
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