SAN JOSE – At Cisco Systems Inc.’s annual Analyst Conference held here in December, CEO John Chambers took some time to chat with a group of international journalists, including Network World Canada editor Greg Enright, at a roundtable interview session. Recently pegged as the most powerful person in networking by Network World (U.S.) magazine, Chambers offered his insights into topics as varied as the networking job scene and Cisco’s view on services.
Q. One of Cisco’s key messages is that your company helps customers become more productive through the advances you’re making in the network. But how do you help customers measure that? Many customers see the value of, say, a voice over IP system, but one of the stumbling blocks to adoption is the difficulty in measuring that value. What do you say to them?
A. We come in at the board of director level and we talk about what are the opportunities and how this will change….We talk about what we see in the industry and we use Cisco as an example, so we tie specifics to it. We share with people the concept of changing processes and business. Also, you’ve got to have the right infrastructure for networking, but you’ve got to set specific numerical goals and you have to measure it….We measure everything at Cisco. I can show a CEO how every morning or every evening I can see every sale in the world, by theatres….I can look at statistics from around the world; I can click on Europe and see how the service provider market is doing there, how the enterprise (market) is doing, I can click again and see how sales are in Italy, France, Germany….I can show how we use it as an individual example.
Q. If you look at Cisco’s gross margins, you are closer to being a software company than a hardware or manufacturing company. Would you consider Cisco a software company?
A. I would consider us all three: a hardware company, a software company, and I would consider us (to be in) what is called ASICs (application-specific integrated circuits), where you use hardware and software combined as programmable on ASICs. So you almost want to think of us as the company that makes the hardware, makes the software, makes the products that allow the two to be combined. Also, and more interesting, (we are a company) that is not a box software or hardware company, but a systems company that makes multiple products across a diverse range of product areas that work very uniquely together: security, routers, switches, optical.
Q. Do you have any targets for your percentage of revenues that are coming from services?
A. I’m in the services which my cus