People focused

Cisco is transforming itself from a technology enabler to a social enabler.

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By  Eliot Beer Published  March 14, 2007

It could be argued that Cisco is in a potentially difficult position. It is indisputably the largest enterprise networking vendor in the world, is hugely successful in its chosen markets and provides the vast majority of the ‘backbone’ of the internet — all of which is to be admired, even envied. However, Cisco may be just a bit too enviable for its own good. Every competing networking vendor has the firm in their sights and with Cisco’s fingers in so many networking pies, any falter on the vendor’s part could be seized on as a potential weakness.

After all, when you get to the top there is usually only one direction left to go in, down.

Unsurprisingly, Cisco itself doesn’t seem to see it that way. If it is facing increasing competition in the enterprise segment, it branches out into new markets, and if it believes its image as a pure-play networking vendor is limiting people’s perception of the company, well, it can just reinvent itself.

This reinvention has been in progress for a while now, certainly since last summer when Cisco gave a series of briefings that emphasised almost everything but its enterprise business. In October the firm went further by announcing it was dropping ‘Systems’ from its name; part of a US$100million branding campaign that focused on how its technology is used to connect people — not machines — together. With the tag line “Welcome to the human network” the firm is attempting to make a name for itself as much in the boardroom as in the data centre.

As part of this push of its broader strategy, Cisco is focusing on a technology area that it believes is very much part of the future of business interaction — video.

At its annual Networkers event for Europe, the Middle East and Africa (EMEA), held in Cannes for the third year running, Cisco executives were keen to promote the benefits of high-definition, real-time, life-size video conferencing, a technology that Cisco believes will become an integral part of a wider adoption of internet protocol (IP)-based systems.

Around the same time as it dropped ‘Systems’ from its name, Cisco unveiled its Telepresence Meeting system — a video conferencing system by any other name, and one that seems to work very well according to many observers.

At Networkers, Cisco executives demonstrated how such technology could be used to enhance people’s working lives — and showed just how seriously the firm is taking its new video offerings.

For Marthin DeBeer, senior vice president for emerging technologies at Cisco, video technology allows his secretary, ‘virtual Margaret’, to live in Texas, US, and still ‘sit’ at her desk outside his office in California.

Visitors to the office see the secretary’s face on a widescreen display, and she will greet them as they come in, thanks to a two-way link.

DeBeer told the audience in his keynote speech that people are often rather surprised when Margaret reacts to their presence. Cisco sees applications such as virtual employees as just part of a wider vision for video systems.

“When you look at video from a broad view, there are multiple markets — taking us into the home with triple-play convergence, into the enterprise with video collaboration, bringing video onto mobile phones and video security,” he said. “We believe when you converge those and deliver them as a set of services across the network, this can make dramatic changes to the home environment, to the workplace and also when you’re on the go.”

While video applications are extremely important to Cisco, the vendor is keen on finding other uses for IP technology. DeBeer also spoke about Cisco’s IPICS (IP interoperability and collaboration system) offering.

He gave a live demonstration of an IP-enabled sensor reacting to a simulated gas leak, which then triggers a variety of alerts and monitoring system — all through an IP system.

What both of these new drives have in common, according to Cisco, is a strong social aspect to them: Telepresence allow people to see each other without travelling long distances; IPICS allows complicated critical systems to work faster and protect us all.

Technically, Cisco’s new video communications system (its executives look very upset if you call it video conferencing) is very advanced.

DeBeer’s team have managed to squeeze 1080p high-definition video (currently the highest specification in regular use anywhere) into less than 6Mbit/s. When it comes to promoting its new technical achievements though, Cisco has decided not to emphasise the technical side. While it clearly remains very proud of its research and development (R&D) divisions, its upper management team has picked the business route, targeting CxOs rather than IT managers.

And yet Cisco is determined to drive its growth through its new high-tech projects. DeBeer said he plans to bring 20 US$1 billion business ideas to market over the next few years, and hopes to see three-quarters of them hit nine digits — a very ambitious plan indeed.

Cisco’s move is part of a general trend within IT to move towards the business and away from pure technology. But the vendor’s plan to drive future growth with high-tech offerings is a much more risky proposition than it might appear on the surface as R&D is expensive and never guaranteed to bring a return.

In many ways, Cisco should be admired for being prepared to go down this route — it certainly bucks the trend in recent years of many big IT players cutting expensive research divisions to focus more on their ‘core’ businesses. The downside to this approach is that those core business lines can be left exposed when business needs shift or other, disruptive, technologies emerge. But Cisco is betting on its R&D facilities — and of course acquisition muscle — as giving it enough momentum to drive growth over the next decade, and beyond.

One thing that doesn’t appear to be changing, judging from the evidence at Networkers, is that Cisco’s focus on proprietary end-to-end systems is still firmly at the heart of its market strategy. With the Telepresence system, for instance, even the room and furniture contained in it needs to be made by Cisco.

For business leaders looking for ‘turnkey solutions’ and ‘strategic partners’, this may well be very attractive.

But for concerned IT and network managers, an over-reliance on one vendor’s end-to-end approach may leave them feeling somewhat exposed.

Cisco, however, seems quite happy to have its rivals take strategic shares in organisations’ IT infrastructures as the price of selling those organisations 80% of the rest of the network.

In that regard at least, the firm seems to feel that if the model is not broken, there is no need to fix it.

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