Cisco is continuing a pervasive campaign to stay the stalwart No.1 enterprise networking vendor course. Plans include...
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double-digit percentage growth goals over the next 10 years; a goal of releasing a new Advanced Technology every four months; a sly approach to dipping its toe in the business-application waters, in the form of IP communications and cutting-edge videoconferencing named "telepresence;" and continually scrutinizing the startup next door for quick and efficient entries into new markets.
At Cisco's annual Networkers user conference this week, CEO John Chambers spoke relatively candidly with reporters, fielding questions about the company at an hour-long roundtable session. Chambers reaffirmed a previously mentioned goal of maintaining growth of 10-15% over the next five to 10 years.
Chambers is quick to note, however, that the Cisco products, such as security, wireless and IP communications, complement its core business, thus playing a major part in achieving this aggressive growth goal. And much of that technology is gained from partnerships and acquisitions among small startups that pepper Silicon Valley. To date, the company has acquired 110 companies, many of which sprout up with an exit strategy of simply being acquired by Cisco.
"Having such a large number of startups in your backyard makes a great opportunity for acquisitions and partnerships," Chambers said, although he has also stated that he would like to do more internal development and less acquiring.
Much attention this week fell on a compelling telepresence demo presented during Chambers' early morning keynote. Telepresence -- a set of bandwidth-intensive, real-time video applications that will allow users to virtually experience events in multiple formats according to their preference -- could be dubbed the next Advanced Technology and, if successful, could also act as a driver for the purchase of more Cisco hardware.
"The upgrade cycle for network gear has slowed down some.… Cisco may want telepresence to be a way to sell more routers and switches," said Zeus Kerravala, an analyst at Yankee Group. "I do think this is an enterprise application, and John alluded to it during the demo. The whole point is to blur consumer and business and deliver content and applications wherever you are."
"We are going to announce an Advanced Technology every four months," Chambers said. "We are putting a lot of pressure on the development teams. We have a lot of seeds that we have planted and are still deciding on the next Advanced Technology. You're going to see a lot around unified communications. We don't want to get too far ahead with telepresence. We are waiting for customer response." Other Advanced Technology areas that may be on the horizon are data centers and applications.
Cisco has been uncommonly successful in identifying hot technologies before they are in demand, and the pressure is on to continue that success. The company's secret lies in "listening to [its] customers," according to Chambers. Prior to the annual meeting, the company did some formal surveying of attendees in order to understand top-of-mind issues. When asked to list the top 3 greatest benefits of IT to their overall business, they listed increased productivity (62.38%), improved customer satisfaction (55.1%), and improved competitive advantage (44.1%). Other responses included enabling business continuity, creating business innovation, and creating new revenue outlets.
In addition, when asked what technologies they plan to deploy over the next year that will give their business a competitive advantage, respondents listed VoIP applications (77.64%), ahead of video or video on demand (46.23%) and enterprise instant messaging (36.29%).
So Cisco seems ahead of the curve in pinning its hopes on end-user communications applications, but it is also positioning itself against industry behemoth Microsoft. Starting next week, Cisco may find itself in the competitive spotlight more than it's used to being, when Microsoft hosts a Unified Communication day geared to moving that technology, which is in direct competition with Cisco's Presence server. And down the road, once Microsoft's Network Access Protection -- a clear competitor to Cisco's Network Access Control, offering a vastly different software approach to securing the network edge -- becomes available, we may see continued rumblings of Godzilla vs. Mothra.
"This is Cisco's biggest challenge as they move more to the desktop … how do they get the loyal Microsoft buyers to look at their stuff," Kerravala said. "Their competition historically has been a bunch of mismanaged companies. Microsoft is in a whole different league."