Cisco offers advice on Net business

The networking equipment giant announced this week that it is forming a new services division dedicated to helping customers make the most of the Internet in their business.

The Internet Business Solutions Group will be located in San Jose and concentrate on offering customers technology and services for Internet-based business applications. Cisco is hoping its own experiences on the Web will come in handy for the new practice.

"Cisco is a great example of an Internet-based company," said Sue Bostrom, the vice president of the new group. "Internet-based applications have enabled us to dramatically increase revenue and greatly improve customer satisfaction, employee productivity, and supplier relationships. The Internet Business Solutions Group was formed to help customers reap similar benefits in their business."

To prove the point, Bostrom added that,"Cisco has been able to achieve over $500 million in financial contribution through gross margin increase and expense reduction which is now being invested in critical areas such as research and development."

So far, a handful of customers have been willing to listen to what Cisco has to say. Cambridge Technology Partners, Ernst and Young, and KPMG have all signed on as early participants. Cisco has shared its "best practices" with the consulting firms and system integrators and they in turn chose Cisco as their "strategic networking vendor in deploying Internet business [systems] and are incorporating Cisco methodologies into their own consulting practices," Cisco executives said.

Cisco isn't the first Silicon Valley hardware vendor to hop on the Internet services bandwagon. Intel two years ago called on German software giant SAP to form the e-commerce service Pandesic. While SAP brought transaction processing software to the table, all the chipmaker had to offer, besides working capital, was its own internal experiences with e-commerce.

Cisco is to make more announcements about its program early next year.