Cisco's CEO: Telecom was never dead.

CHICAGO--Cisco Systems CEO John Chambers disagrees with BusinessWeek's recent article that claims the telecommunications industry has risen from the dead.

In Chambers' view, the telecom market is simply entering the second phase of its life cycle--a cycle he claims to have envisioned some 15 years ago when Cisco pledged to change the way people work, live and play.

"BusinessWeek got it wrong," he said. "Telecom is not back from the dead. It's merely in phase 2 of its development. In this second phase, collaboration or sharing with a large group will change the service model and drive growth on networks."

During a keynote speech here on Monday at the NXTcomm tradeshow, Chambers said that collaboration at the corporate level, along with more than 50 percent consumer broadband penetration and the rise of Internet video, will push traffic growth to between 300 percent and 500 percent per year. This is far beyond the 50 percent to 100 percent per year growth typically expected today.

This talk of collaboration and shaking up business models is nothing new for Chambers. He's been touting this message in stump speeches since the company launched its high-definition telepresence video service last year and bought WebEx in March.

Of course, Chambers' vision of a transformed Internet also helps sell the company's bread-and-butter products, the huge routers that shuttle IP packets across the Internet. In fact, he noted during his speech that Cisco has sold more than 900 Carrier Routing System, or CRS-1, routers to more than 85 service providers throughout the world due to increased traffic on the Internet.

But to drive home his point, he used Cisco's own business as a sales pitch to those not convinced that collaboration will transform how companies do business.

He said that Cisco itself is stepping away from a top-down leadership style, relying more on soliciting new ideas from employees. Already, he said, IP collaboration tools have increased Cisco's productivity. He cited the company's acquisition team as a perfect example. Last year, the company took 45 days leading up to its acquisition of Scientific Atlanta. Earlier this year, it spent only eight days closing the deal with WebEx and that was with key executives working remotely in other parts of the country.

"I'm very comfortable with the use of 'command and control' leadership," he said. "When I say turn right, we turn right. But now we are going toward collaboration. And we can move with tremendous speed."

In the end, Chambers said, the new phase of the Internet will not raise all boats as it did in the first phase. This time success will be dependent on execution, he said. For those that miss a market opportunity or move too slowly, consolidation is the answer.

"This market waits for no one, including Cisco," he said.

[thebumboys]

How fast?

If most supposed "high speed" net users begin viewing most of thier regular television over thier internet access point, and, cell providers serve up "high speed net access" to most of the phones used, how will the current intrastucture for the internet cope?

[dondarko]

fiber ok, copper bad

see fiber optic cable can handle anything you throw at it since it is light traveling at the speed of light so there would be no issues. Where the problem arises is in residential and older neighborhoods where bandwith is limited based on the fact that there is no fiber present at location but connected to instead, down the road with some repeaters. As such the provider does have limited bandwith and when everyone logs on at same time at some point, it will come to a crawl.

[Maccess]

Correct!

The only dead and dying telcos are those which use a business models geared towards entrapping their customers in obsolete products.

The telcos that are flourishing are those that are embracing the new technologies that people want TODAY. Ironically, some of those telcos are flourishing because the regulators FORCED them to open up while they fought tooth and nail, only to benefit when their existing infrastructure gave them a competitive advantage in the new world of telecommunications. E.g. Southwestern Bell Corp., which resisted the Texas regulators, yet did so well under a liberalized telecoms regime, they bought most of their former parent, AT&T.

[LorrieinAZ]

Human network & teenage wasteland

I'm not technically minded but I do find it odd that the new ad
campaign for CISCO tries to sap it up with the "human network"
only to have the Who's "Teenage Wasteland" play in the
background....who was sleeping on THAT one?

Lorrie
Lizard Dance Productions

[NohSpinZone]

Human Network Song

Not only are you not "technically minded", it appears you're not musically minded either. Any self-respecting fan of The Who knows that the song is called "Baba O'Reily," not "Teenage Wasteland". Get a clue! You'll sound more credible in your flames that way.