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Cisco CEO John Chambers interviewed; Connect and Collaborate top on the agenda!

John Chambers interviewed at eWeek here, an excerpt:

So you start in the data center because that's where the money is available? And as the economies of scale drive down the cost of technology, then it moves out to a broader audience?

The reason you start in the data center is because broadband is free there. So your bandwidth is relatively free, and all your servers are available without delay and all the storage is there. So if you can't do it in the data center, where you have IT pros pulling it all together, you sure as heck can't do it combining points of presence all the way to the home or to my various business unit offices.

Do you see any potential roadblocks in the communications landscape that could derail that vision of going all the way out to the home with TelePresence and this kind of collaboration? I'm thinking specifically about net neutrality.

For me, the question with net neutrality is: What are we trying to accomplish? We're trying to get broadband to every American at an affordable cost with at least two to three technology options that they can choose from. So the primary goal is how do we get it built, and then later you can ask, well, how do we want to splice it in a way that allows each of us to gain access to a certain amount of broadband as part of a public utility?

But as a [service provider], if you have to deliver that free of charge to your competitors, or at a charge below or at cost, and you can't guarantee your response to me as an end user, then all of a sudden you have a problem. I [as a business user] will pay a premium to make sure I am able to get my applications. If I have to compete with a kid down the block using a computer game with 1,000 other people and I can't use TelePresence for an $8 million sale, all of a sudden I have a problem. And I'm putting TelePresence into my home this month. So you begin to see these are not separate. They have to combine together.

We tend not to say, "Here's where the industry is going, and jump." We tend to listen to our customers. I wish I could tell you I bought Scientific Atlanta because it was really smart. It was Time Warner and some of the other big service providers saying, "Go buy it." We bought WebEx because of a phone call from my top business person saying, "John, they're about to be bought by one of your competitors, but this is a company that's perfect for you." We thought [the competitor] was Microsoft, but it turned out not to be Microsoft. We got that phone call on a Thursday night, and we bought [WebEx] one week later. Everything was done.

We used a lot of these principles of unified communications and collaboration and Web 2.0 to pull that off.

Market transitions often are challenging to the incumbent, and our approach in the data center is to say, "This is inevitable; we're gonna lead."

And so you'll see a series of announcements over the next 12 months, one after the other, on data center switching. But it's really about data center virtualization. You saw us [take] a minority interest in VMware. That wasn't a subtle message to the market. That says we're going to play there. And we'll partner tighter than anyone else with the leaders in this.

Many of the CIOs will tell you there's been a lack of innovation in high tech for quite a few years. If you think about the innovation that occurred in the '90s, that was about transforming business models, supply chain, transforming the way you interface to your customers, the way you order and deliver online, your ability to communicate with others through e-mail first, then text and now video.

Now you're starting to see the next wave of innovation. Most CIOs are pretty hungry for this. Because, guess what? Their budgets haven't grown very much. And part of the reason they haven't grown is because productivity in the U.S. has been relatively stagnant for three years—in the 1 to 2 percent range, which is where [former Fed Chairman] Alan Greenspan believes it will stay.

But in the early '90s, the foundation was laid for the 5 percent productivity growth that occurred in '96 and '97. We called this one cold. In 2002 and 2004, we got years where productivity stayed at 4 percent. Now it's been back down again, and you're a CEO trying to make decisions and you're saying, "I can acquire a company, I can buy back my stock, I can move into adjacent markets or I can spend money on IT. If I can only get productivity of 1 to 2 percent a year out, I'm not going to spend a lot of money on IT." So what's missing is innovation. And what this data center virtualization enables at first is cost efficiencies, consolidations. But over time, it is innovation for applications, which I think will be built largely around collaboration or Web 2.0 concepts and directions. So that's our vision.

If you think about it, any device to any content—especially to any applications to any processors—that's what Cisco does. And it's about intelligence in the network, not just dumb pipes.

Can we expect to see partnerships between Cisco and other server virtualization providers such as Citrix Systems and Microsoft? If so, how soon?

We don't share our moves prior to making them public. I think you will continue to see us active both from an internal development, a partnering and acquisition role across the whole data center. We have an expanding relationship with Microsoft, and we have similar views of how the data center might evolve. And so I'd be surprised and disappointed if you didn't see us move with Microsoft on some opportunities, even though we might compete in some areas, like unified communications. That's really the future.

The days of complete friend or foe are long gone. Within that, EMC is the one that is aligned closest with Cisco with very little overlap. But we clearly want to partner with all the players—the IBMs, the HPs, the EMCs, the Microsofts. We are one of the few companies that have traditionally done that, and I don't underestimate that it's hard.

The rest is here


  1. Service providers are already participating in the Cisco Powered Program, which enables them to connect and collaborate.


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