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Six technology heavyweights came together Monday to announce an alliance to jointly license patents for the broadband wireless technology WiMax.

The group, which calls itself the Open Patent Alliance, includes Intel, Cisco Systems, Samsung Electronics, Sprint Nextel, Clearwire, and Alcatel-Lucent. The intent of the group is to gather rights to WiMax patents and license them to makers of consumer electronics devices, networking equipment, and computers.

During a Webcast Monday, executives from each of the six companies emphasized the openness of the alliance that was being created. And the companies said they hoped other companies would join the group.

"As a founding member of the alliance, our role is to work with different vendors and evangelize the benefits of an open model," said Sriram Viswanathan, general manager for WiMax at Intel Capital. "We will invite others to join and try to influence players who are whetted to other models to understand the benefits of openness."

WiMax is an IP-based wireless technology that offers high-speed Internet access similar to speeds delivered through Wi-Fi, a short-range wireless technology that uses unlicensed spectrum. So far the technology, which was standardized a couple of years ago, has been used mostly in the developing world to provide fixed wireless broadband.

Now companies such as Intel, Sprint Nextel, and Clearwire are pushing mobile WiMax to bring true broadband wireless to MP3 music players, gaming devices, smartphones, and a plethora of other consumer electronics devices.

Sprint Nextel and Clearwire announced earlier this year they are joining forces to complete the construction of a nationwide WiMax network in the U.S. And Intel already has plans to embed WiMax chips into its Centrino laptop chips. Samsung, Cisco, and Alcatel-Lucent have already been developing infrastructure equipment for WiMax networks.

But these companies all agree that for WiMax to be successful a more robust ecosystem is needed. The OPA is meant to encourage this ecosystem primarily by making WiMax-related patents inexpensive and accessible to anyone.

This is different than the cellular model, in which companies such as Qualcomm, Nokia, and Ericsson have separately developed technology and charged patent royalties for 3G products.

Cell phone makers can spend more than 25 percent of developing a new product on licensing underlying wireless technologies, according to a Wall Street Journal article. Intel's Viswanathan said these high royalties are to blame for stifling innovation. He said that cellular chips have not expanded to other devices such as cameras, music players, or gaming devices because of the high cost of licensing patents.

"We haven't seen a broad proliferation of cellular technology in anything other than handsets because the model is closely held and restrictive," he said.

A similar open patent strategy was devised in the video industry for video compression technology.

That said, WiMax faces many challenges. For one, Sprint Nextel and Clearwire are the only major carriers building a WiMax network in the U.S. The nation's two largest cell phone operators, AT&T and Verizon Wireless, have already said they plan to use a competing technology known as LTE.

Still, WiMax backers say that WiMax has at least a three-year time to market advantage since LTE hasn't even been standardized yet. Intel, which plans to include WiMax in its Centrino platform, says it expects to seed the market quickly.

Network equipment maker Cisco Systems introduced a simpler, cheaper version of its high-end video conferencing system on Monday.

The new Telepresence System 500 is a less expensive version of the telepresence product Cisco launched in 2006. Cisco's telepresence system was developed using high-definition screens and cameras, array speakers, and high-speed Internet connections to provide crystal clear video conferences that could replace the need for executives to travel halfway around the world to meet with colleagues, partners, or customers. The idea is that if companies can conduct business virtually they can save a whole lot of money on traveling.

Cisco TelePresence 500

(Credit: Cisco Systems)

Video conferencing has become a big part of Cisco's strategy moving forward. Last year, the company acquired online video and audio conferencing company WebEx. While WebEx allows for video conferences to be launched straight from the desktop, it's not meant to replicate in-person meetings. Still, it fits into Cisco's overall strategy, which is to improve worker productivity by allowing people in different locations to collaborate using the Internet.

The original version of the telepresence product was developed for small groups. It requires an entire room be dedicated to setting up the system, and it is expensive. The latest version of the product is expected to appeal to a broader audience and is designed to be used by one person.

The TelePresence System 500 integrates a 37-inch display, camera, microphone array, speakers, and specially designed lighting in a unit that can be placed on a desk, mounted on the wall, or stood on a pedestal in a private office. It will cost $33,900, which is less than half the cost of the most basic version of the TelePresence 1000, which was designed for about two people to a unit.

In addition to taking telepresence down to the personal level, Cisco introduced a version of the product that can accommodate larger groups of people. The Cisco TelePresence 3200 is designed for up to 18 people and is a step up from the TelePresence 3000, which was designed for six people. The 3200 version will cost $340,000, compared with $299,000 for the 3000.

Cisco TelePresence 3200

(Credit: Cisco Systems)

The company said the new Cisco TelePresence 3200 is ideal for company headquarters or large regional offices where large teams need to collaborate. It also is good for remote training.

Cisco has had good success with its TelePresence offering so far. And last month Cisco said it was teaming up with AT&T to jointly sell its telepresence products.

Cisco competes with a slew of companies in this market, including Hewlett-Packard, Polycom, and Teliris. Verizon Business, a unit of Verizon Communications, also sells a video conferencing service.

On Monday, Teliris announced a product designed for "personal" telepresence. Its product lists for $32,500. It also introduced a version for larger groups, which includes two or three screens. It costs between $99,000 and $125,000 and does not require a separate room dedicated to the system.

Network equipment maker Cisco Systems beat analyst expectations when it reported earnings Tuesday, but its lukewarm guidance showed that the slowing U.S. economy is still impacting the company.

Cisco, the world's largest supplier of equipment that shuttles traffic around the Internet, reported a net profit for the fiscal quarter of 2008 of $1.8 billion. This was down from profits of $1.9 billion in the same quarter a year ago, but it still beat analyst expectations.

Revenue for the quarter was up 10.4 percent to $9.8 billion. The company had forecast an increase in revenue of 10 percent.

Analysts believe that Cisco's results mean the company's business is stabilizing. But the sagging economy will still continue to impact its earnings for the next few quarters.

Last quarter, CEO John Chambers said the company was seeing a slowdown in technology spending in Europe and the U.S. And he predicted it would take two to five quarters for things to rebound.

On Tuesday's conference call, Chambers said that spending in the U.S. is still tight. And he anticipated that budgets will be constrained through at least the next two quarters. He said the company will likely see sales growth in the 9 percent to 10 percent range in the quarter that ends in July. But he maintained that the company's long term forecast of 12 percent to 17 percent revenue growth is still doable, indicating that he thinks the slump will be short-lived.

Cisco Systems said Monday that it's added to its arsenal of data center technology with a new switch and the purchase of start-up Nuova Systems.

Cisco, which already owned 80 percent of Nuova, worked with the start-up to build the new Nexus 5000. On Monday, Cisco introduced the new switch, and also announced that it has bought the remaining 20 percent of the start-up.

Cisco announced its $70 million investment in Nuova in 2006. The company didn't disclose details of the current buyout. But in April of last year, it expanded its funding agreement and raised the maximum potential payout of the transaction to $678 million.

Cisco will continue to use the Nuova technology to further develop and expand the Nexus product line, a new line of data center switches the company introduced earlier this year. The first product in the line was the Nexus 7000. The Nexus 5000 will provide a smaller, fixed version of the product.

The new Nexus switches combine Ethernet switching, IP routing, storage, and security into a single device. And while these switches don't necessarily take over the functions of servers or storage area devices in the data center, they will allow companies to use their servers and storage devices more efficiently.

Cisco has spent more than two decades building its brand as a switching and routing powerhouse. Now, it is tackling the data center, where it hopes its Nexus products will dominate. These new switches are expected to become the next high-ticket item Cisco can sell to large companies to help fuel the company's growth. Cisco hopes the data center will be worth about $10 billion over the next five years, which means it is a key opportunity for a company that needs to grow at least between 10 percent and 15 percent a year to satisfy Wall Street.

But Cisco's move into the data center could pit it against some of its largest partners, such as IBM, Hewlett-Packard, and EMC. Cisco claims its products complement products from these companies. IBM and Hewlett-Packard are more server-centric. And EMC is more focused on the issue from a storage angle. Meanwhile, Cisco sees the intelligent network, with its Nexus 7000 sitting in the center, as the best answer for virtualizing the data center.

Still, competing with its partners is starting to become a familiar tune at Cisco, which has found itself also competing head-to-head with software giant Microsoft in some areas of its business.

Cisco Systems CEO John Chambers is joining the virtual stage with Nobel laureate and former Vice President Al Gore on Wednesday morning to talk about climate change and technology innovation.

Al Gore

Chambers and Gore will use Cisco's telepresence system to communicate with a live audience at the VoiceCon trade show in in Orlando, Fla. They will discuss how unified communications technology, like the telepresence platform, can play a role in reducing carbon emissions, which are impacting climate change.

John Chambers

They'll also discuss other ideas for how businesses can reduce greenhouse gas emissions through innovative technologies and how the technology industry can create a sustainable model for addressing climate change.

The event will be Webcast live starting at 11 a.m. EDT/8 a.m. PDT. And anyone interested in tuning in can register at the Cisco Web site to sign up in advance.

My colleague Martin LaMonica, who covers green technology, will be listening to the Webcast. So look for a blog post from him later Wednesday.

Cisco Systems has invested in a peer-to-peer Internet TV start-up.

The Seattle-based start-up GridNetworks said that Cisco is one of two "strategic investors" that contributed to the company's $9.5 million series A round of funding announced in October. The venture capital firm Panorama Capital of Menlo Park, Calif., was named as the lead investor when the funding was first announced.

GridNetworks, which launched its service in November 2006, has taken a hybrid approach to delivering high-definition movies and TV shows over the Internet. It uses both peer-to-peer technology, which leverages content distributed on users' computers all over the Internet as well as content delivery technology, which essentially caches and stores content in server farms throughout the Internet so it can be served up more quickly to geographically close clients.

GridNetworks' software client called Gridcast Connector is installed on PCs and, when content is requested, it locates peers best suited to serve the content. It uses content delivery technology to buffer the first 30 seconds or so of a show or movie.

Cisco has been focused on video for the last couple of years. Eventually, the GridNetworks technology could work well with the company's cable set-top boxes from Scientific Atlanta and Linksys home routers. On the infrastructure side, Cisco also offers video-on-demand products. In 2006, it bought Arroyo Video Systems for $92 million. Cisco plans to use the Arroyo technology to deliver Internet video directly to set-top boxes. And this technology could help the company distribute high-definition video more efficiently.

Cisco is the largest Internet infrastructure provider in the world. And it's significant that the company is investing in a company that is developing a peer-to-peer video platform.

P2P has gotten a bad reputation for being a damaging technology that allows digital pirates to distribute stolen content. It's also been blamed for clogging broadband networks. Last year, cable operator Comcast admitted that it slowed down some peer-to-peer traffic to better manage its network. Comcast is currently under scrutiny from the Federal Communications Commission, which is looking at whether the company's practices violate Net neutrality principles.

Other carriers have also expressed concern over the use of peer-to-peer technology. Time Warner said it is testing a tiered service to discourage people from using peer-to-peer applications.

But many networking experts say that P2P is actually the best and most efficient way to deliver video, especially high-definition video, which, when streamed, eats up vast amounts of bandwidth throughout the entire network. Cisco's investment in a budding peer-to-peer delivery platform could help speed up developments in the technology that will make even more efficient use of networks.

BARCELONA, Spain--Mobility means different things to different companies. For Cisco Systems, it means more than just taking your handset or MP3 on the go.

It's about connecting any device to any network from anywhere at anytime.

"This will be the next phase of the Internet," Cisco CEO John Chambers said at an event on Monday previewing a keynote address he will be giving Tuesday morning at the GSMA's Mobile World Congress here. This is the first time ever that Cisco, the leading supplier of IP infrastructure equipment in the world, is addressing the cell phone industry in this forum.

In many ways it's fitting that Cisco, the company that has essentially helped build the Internet, would be turning toward mobile. And it's this focus on the network that has shaped Chambers' views on what mobility really means.

"Most people talk about mobility in terms of a device," he told analysts and reporters Monday. "But the challenge is to think of mobility as the ability to connect any device to any content at any time, anywhere in any mode. It really goes across a combination of networks."

Chambers said that applications and the information that users are trying to access are what should be mobile, not the device itself. And it shouldn't matter whether the information is accessed on a wireless network or over one that is wired.

He said a hybrid approach is the most likely way to address consumers' needs. In some cases, a wired broadband network will be the best choice, while in other cases a wireless infrastructure will serve consumers' needs better.

One thing is certain: Cisco doesn't see a single technology as the answer. Chambers said the company would keep its options open as it evolves its wireless and mobile strategies. For example, even though Cisco recently paid $330 million to buy the WiMax start-up Navini Networks, it doesn't mean the company will push only WiMax solutions. In fact, he pointed out the danger of getting into a religious technology battle.

"You can't fall in love with one technology over another," he said. "There are lots of people who would have told you that ATM to the desktop was the best solution. But it was fast Ethernet that won the day."

BARCELONA, Spain--Cisco Systems' CEO John Chambers gave a little more color Monday to comments he made last week regarding a slowdown in IT spending.

John Chambers

(Credit: Cisco)

Chambers, speaking at a preview event at the Mobile World Congress ahead of his keynote speech Tuesday, told analysts and reporters that the company only started seeing a slowdown in customer orders of its networking products in January, the last month of the second quarter of Cisco's fiscal year 2008. He also said that the current blip in orders is not as bad as previous downturns, most notably the major telecom bust of 2001.

"In situations like this, the classical approach is to look at how long will this last and how deep will it go," he said. "Based on what we've seen in the past, we think this will be relatively short in duration and relatively shallow."

Last Wednesday Cisco beat analysts' second fiscal quarter sales, but the company indicated that its orders on new products had slowed in Europe and the U.S. as companies pulled back on technology spending. The company said it expects growth in the third quarter of only 10 percent instead of Cisco's long-term growth rate expectation of between 12 percent and 17 percent, a range that Chambers expects the company to get back to within the next two to five quarters.

The news last week spooked investors, who sent the company's stock down about 8 percent. Cisco reported second quarter revenue of $9.8 billion, compared with $8.4 billion in the period last year. Net income for the quarter was $2.1 billion, up from $1.9 billion last year.

Cisco Systems said Wednesday that is has invested in a U.K.-based company called IP.access, which has developed gear to boost cell phone signals indoors.

Details of the deal or how much of a stake Cisco has in the company have not been disclosed.

IP.access makes devices called femtocells, which boost cell phone signals indoors to provide better in-building cell phone coverage. Femtocells offer wireless operators a cost effective way to improve network coverage. Several wireless carriers around the world have already begun using the technology. Sprint Nextel announced last year it would offer its Airave femtocell product. And IP.access says on its Web site that it already has deals with several network operators including T-Mobile USA, Smart in the Philippines, Telfort (now KPN) in the Netherlands, and Telefonica O2 in the Czech Republic.

It's not surprising that Cisco would be interested in a femtocell company. Cisco, which has traditionally provided carriers with IP infrastructure equipment, has also been bulking up its wireless offerings in the last few years. It's biggest acquisitions so far have been in the Wi-Fi market, most notably Linksys and Airespace. But it's moved into other wireless technology, too. In September it bought Cognio, a company that has developed technologies to better manage wireless spectrum. And in October it acquired the WiMax equipment provider Navini for $330 million. As more of its customers go mobile, Cisco sees an important opportunity. And femtocells, like Wi-Fi routers, offer another way to provide mobility indoors.

Other large technology companies have also taken an interest in femtocell technology. Last year, Google invested an undisclosed amount in a femtocell company called Ubiquisys.

IP.access has been around since 1999 when it was spun out from TTPCom, a cellular infrastructure company later acquired by Motorola. In the last couple of years, the company has been out raising money from venture capitalists, and it counts Intel Capital among its investors.