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.