Cisco Systems CEO John Chambers has one word to describe where his company and the entire technology industry is headed in the coming years: collaboration.
During his kickoff keynote speech at the company's annual analyst conference in San Jose, Calif., on Tuesday, he talked about how collaboration will spur the next wave of technology innovation and productivity gains. From collaborative corporate tools like his company's video telepresence system to social-networking sites like Facebook, Chambers thinks that people, whether they are at work or at home, are looking for ways to connect with each other virtually.
"Our kids got it right, (the next wave of technology) is all about social networking," he said. And social networking, he added, is just a form of virtual collaboration.
This isn't the first time that Chambers has touted the notion of collaboration. In fact, he has been giving the same stump speech since Cisco's telepresence videoconferencing system was introduced late last year. And he turned up the volume on the subject earlier this year when the company bought WebEx, a Web-based collaboration service.
But on Tuesday, Chambers emphasized that this idea of collaboration is not just a theme for certain products or categories; it's a strategy that reaches across every product in the company, from its routers and switches to its unified communications software to its Linksys home routers.
Chambers has often referred to Cisco as the plumber of the Internet. But now he says the company will offer much more than plumbing. Instead, he sees Cisco as helping companies transform their businesses by being the company that offers an entire solution that allows companies to improve productivity by virtualizing communications and business processes. And in the consumer market, Chambers believes that Cisco can be the company that enables TV networks, movie producers, music labels, and other content providers to distribute their content to home users.
"Plumbing is great," he said. "But if you don't have anything to connect it with, it's not very exciting."
That's why, he said, the discussions Cisco is having today with companies like NBC Universal aren't just about them buying infrastructure gear like routers and switches, but it's about how Cisco can help distribute content securely and efficiently to more viewers.
While Cisco sees its role with customers expanding beyond just providing infrastructure, it won't be throwing the baby out with the bathwater. Chambers still sees huge growth potential for Cisco's infrastructure business as it helps companies change their processes so that they send more video and data over the Internet.
In support of this thesis, Chambers called upon Erik Huggers, group controller for future media at the BBC in London, who joined the discussion via Cisco's TelePresence videoconferencing system. Huggers explained how the BBC plans to make all of its content available digitally to viewers by 2012. And as it rolls out new services online, it's already seeing the volume of traffic on its network increase dramatically. Today BBC online users view and listen to 1.3 petabytes of content per month, Huggers said. That number is expected to jump to 5 petabytes of data per month within a year.
This is all good news for Cisco, which likely will cash in on this upgrade cycle. The company is already reaping the rewards of increased bandwidth demand on the carrier side. On Monday, it announced that it won a huge deal to supply AT&T with core Internet routers.
But in order for Cisco to live up to its own lofty expectations, it will have to become a dominant player--not just in switching and routing, but in other product categories such as unified communications, wireless and mobility, home networking, and security, just to name a few.
The battle won't likely be easily won as the company faces stiff competition from other technology heavyweights such as Microsoft. But Chambers said he believes that Cisco will end up on top. He said his company has already changed its internal processes and technology to a more collaborative style that he believes will help it innovate faster than its competitors.
"It took us about six years to grasp the power of social networking," he said. "But once we saw how it could change how we can interact with customers we moved. And in three years almost all of our customer interactions will be virtual."