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Chambers: Networking success demands more than technology

Cisco CEO John Chambers painted a picture of networking's future but said businesses must make some changes if they're going to effectively tap the technology.

ATLANTA -- The leader of the world's top networking company believes that, without business process changes, the potential of next-generation networking technology will never be realized.

Cisco Systems Inc. president and CEO John Chambers, who addressed attendees this morning at the CTIA Wireless 2004 conference, said that the IP networks of tomorrow will reach new levels of interoperability.

He said that wired and wireless devices, services and access methods will become transparent, and that resources like applications and storage will become so closely linked with networks that users won't be able to determine their network location -- be it a few feet or a few thousand miles away.

You have to have a total security defense, and that defense has to be network driven.
John Chambers, Cisco CEO,

Pervasive network connectivity will soon become the standard, Chambers said. For instance, it will be possible for a wireless device user to move between buildings on the Cisco campus, travel to the airport and take off on an international flight while maintaining continuous Internet connectivity.

This network transparency will create new revenue-generating scenarios for all types of companies, Chambers said. He offered up a scenario straight out of the 2002 Steven Spielberg film Minority Report, in which a consumer enters a retail store and is recognized immediately. He said that an intelligent network will then let a shopper review previous purchases made at that store and locate items that may be on sale or that may be of interest based on the customer's buying patterns.

However, Chambers said that, even if a company implemented the networking technology that would make that scenario possible, without business process changes, that firm would never realize the benefits. In fact, Chambers said it would take a step backward.

Citing the results of a Momentum Research Group survey conducted last year, Chambers said companies that implemented new business processes along with new technology on average realized productivity gains of between 400% and 500%. Those firms also enjoyed cost savings of 25% to 30%. Enterprises that did not alter their business processes after implementing new technology spent as much as 10% more.

Chambers said that next-generation networks will shorten the time it takes to transform an idea into an implementation, and that business rule sets must be refined to keep up with the ever-increasing pace of business changes.

Intelligent security

Chambers also focused on the need to make security an intrinsic part of the network at every level. "You have to have a total security defense, and that defense has to be network driven," he said.

That strategy, Chambers said, revolves around building intelligent security features into VPNs, firewalls, routers and switches so that those network devices can stop viruses as effectively as antivirus software. Also, he said Cisco is intent on building network devices that can be upgraded or replaced quickly without harming network security.

Chambers was bullish on the potential of new networking technology to drive economic growth. He said that the U.S. gross domestic product could grow as much as 3% annually going forward, and that yearly 5% growth isn't out of the question.

He emphasized the need for corporate leaders to strike new partnerships because, during the next five years, business relationships will help define which companies use next-generation networking technology to successfully add to the corporate balance sheet. Chambers said those relationships will be more dynamic than in the past; one partner may benefit more than the other in certain situations, and vice versa, but that both firms will ultimately benefit.

Attendee Larry Aisenbrey, vice president of operations with Viaero Wireless in Fort Morgan, Colo., said he had hoped that Chambers would address issues of interest to rural companies. Aisenbrey said that his company uses Cisco routers, but that it has had difficulty finding an affordable price for networking gear because it doesn't purchase equipment at the high volume of large enterprises.

Alan Jones, an attendee with CorrWireless in Oneonta, Ala., said he was interested in the specific products Cisco will be releasing in the near future, such as new routing schemes. He said that it's clear that the industry is moving to an all-IP backbone, but that questions remain as to how that evolution will take place.

Wireless is more widespread

Earlier addresses at the show also highlighted the rapid pace at which the wireless industry is moving. Steve Largent, the new president of CTIA and a former Congressman and pro football player, told attendees that the wireless phone industry is now an $87 billion industry. Its 160 million subscribers, on average, are paying $10 less per month for service, compared with 10 years ago, Largent said.

Largent also said that 75 million camera phones shipped last year, putting the devices on pace to surpass DVDs as the most rapidly adopted consumer technology in history.

Michael Powell, chairman of the Federal Communications Commission, said that his organization is cultivating the wireless broadband market so that the technology will soon be able to deliver content and services to homes and businesses just like telephone and networking wires do today.

Powell said the FCC is seeking out more spectrum to allocate for wireless broadband as a data platform and that it will maintain a hands-off approach to how that spectrum is used, so that vendors aren't limited in the way they develop customer offerings.

Sun Microsystems Inc. CEO Scott McNealy used his stage time to tout the growing influence Java is having on the wireless market, noting that there are now 300 different Java-powered mobile enterprise devices on the market today.

McNealy also wowed the crowd by demonstrating the capabilities of Sun's Java-based desktop GUI. Calling it a Windows-similar environment, he showed attendees how they could use StarOffice to edit documents created by Microsoft applications. McNealy also demonstrated also how the 3D "Windows-similar" environment allows application windows to be spun around and used as virtual scribble pads on their reverse sides, then rotated on an angle to reduce their size when not in use.


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