I spent last week in San Jose, Calif., at Cisco System's annual analyst event called C-Scape. Since it snowed twice while I was gone, Cisco could have said nothing and it would have been worth the trip, but John Chambers and Co. made sure to fill the two-and-a-half days with loads of content. Unlike past Cisco events, which could have been held in an MIT engineering lab, this one focused on stuff way above Layer 3 in the old OSI stack. Cisco believes it can continue healthy double-digit growth in the future by focusing on:
1. Phat content: Think Web 2.0 on steroids. "Collaboration" was probably the most popular word of the entire conference followed by others whiz-bang concepts like TelePresence and IPTV. Cisco believes we will see 40 percent-plus growth in Internet traffic through 2011. No longer content to sell pipes alone, Cisco will gladly help customers with new goodies for video conferencing and unified communications.
2. Solutions: Cisco wants to sell the whole communications enchilada. For example, when you buy TelePresence you get screens, microphones, chairs, and tables. Heck, I'm surprised that Cisco isn't including plants and window treatments! To Cisco, TelePresence is still small potatoes. The company is already building new infrastructure for developing countries. Look for Cisco to also work more closely with service providers on managed services in 2008.
3. Software: Software and especially management software, was always Cisco's Achilles' heel. The company reads this loud and clear so it reorganized its software group, purchased application-layer companies like Reactivity and Securent, and brought in a bunch of software heavy hitters. I think Cisco is thinking about a big upside in software moving forward.
4. Hedging its bets: Who cares which switching transport wins out, Cisco plays in Ethernet, Fibre Channel, and InfiniBand, and makes devices that can handle all three. Cisco's purchase of WiMax vendor Navini Networks is yet another example. Cisco wins regardless and can pick its spots to seek control of a market.
The industry used to pick on Cisco for areas of technical weakness or product gaps. Cisco seems to be circling its internal wagons in these areas and then placing bets on the next few communications megatrends. Yes, Cisco still competes with Extreme, F5, Juniper, and Hewlett-Packard but it really has its sights on IBM, Microsoft, and HP. This places the company in a very unique position.
There will certainly be bumps along the way but Cisco has its installed base, global reach, and deep pockets to fall back on. It's hard to see how the company won't grow with these strengths. One more thing about Cisco, it puts on a pretty good analyst event.
Have you seen Cisco System's TelePresence? If you haven't, you should. TelePresence is a next-generation video-conferencing offering from Cisco and to call TelePresence "technology" minimizes its scope. TelePresence includes television monitors, desks, chairs, and everything you need for connectivity. Once installed, you get a Star Trek-like experience. Cameras react to voices and focus on the person speaking. Television monitors display remote participants across a virtual table as if they were in the same room. Geek heaven!
TelePresence is nothing like any video-conferencing technology I've ever seen or thought about. The first time I heard about TelePresence was in a presentation by Cisco Chief Development Officer Charlie Giancarlo. When describing TelePresence, Charlie talked about the AT&T "picture phones" at the 1964 New York World's Fair. Since I am originally from the New York area and about Charlie's age, I thought about small TV screens on red phones that may or may not have had dials on them.
Charlie's historic comparison made TelePresence personal for me but I had no idea just how far things have progressed. As an adult who has now been in the tech industry for 20 years, I dismissed TelePresence as the newest version of those dopey PictureTel video hookups of the early 1990s.
My point is this: technology has evolved so quickly that our personal analogs are extremely narrow and may be nothing like the real thing of today. By equating TelePresence with 1964 AT&T phones and PictureTel, I completely eschewed TelePresence until I saw it in action. This presents a challenge to Cisco as I'm sure there are lots of folks like me who remember the agony and stupidity of those early video conferences.
Cisco found that the best way to convince skeptical customers of the power of TelePresence was with live demos. Like the futuristic theme of the 1964 World's Fair, technology has progressed to a point where you have to see this stuff to believe it.
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