Dan McLean: Cisco carries over last year’s priorities into 2003

Cisco Systems’ recent industry analyst conference in Santa Clara, Calif. was a familiar story, albeit with a new set of words and phrases.

Much of what the company intends to focus on in the coming year has long been said and done before. There’s no fundamental shift in direction or changes to overall strategy in store for in 2003. Instead, maintaining and fortifying incumbent strengths, plus a reassertion into “familiar” new spaces and opportunities, are the announced key market goals for Cisco.

For starters, the networking giant once again renewed its vow to create a leading presence in the carrier market, only this time they really, really mean it. They really do. But the recognized long road ahead remains the same arduous journey, as company CEO John Chambers admitted Cisco only garners about 3 per cent of the current capital spend made by communication service providers. A capital-spending freeze by most carriers makes the situation even more difficult.

Cisco will nonetheless forge ahead with its mantra of “IP everywhere,” but the spin this time suggests productivity is the key value achieved from communications convergence. For a carrier, it’s the notion that multiservice IP creates greater efficiencies and achieves cost savings, in addition to providing a platform upon which to launch revenue-generating newer, richer service offerings. The message is one aimed squarely at business and intended to strike a chord with CEOs, CFOs and various business unit management types.

Cisco says it will utilize its consulting muscle and a cache of TCO/ROI (total cost of ownership/return on investment) tools to convincingly illustrate such claims. As most in the industry recognize, however, the greatest challenge for Cisco in the carrier space will be one of legitimacy – to sway the steadfast hearts and minds of this conservative group, particularly incumbents for whom familiarity breeds comfort and an inclination to move to the next phase of networks with old acquaintances at Lucent, Nortel, Alcatel and the like.

Acquisitions are, again, in vogue as Cisco announced it would in 2003 continue to use these as a means to move into new and emerging markets. Don’t expect a blockbuster deal. There’s no impending Nortel or Lucent buy despite the bargain-basement price for these once-mighty competitors. Instead, the targets for takeover are pretty much the same as always – smaller companies that share a similar technology vision and culture, and in close proximity to Cisco’s Silicon Valley headquarters. And, as always, Cisco won’t enter a new market unless it can immediately occupy a number one or number two position.

On the enterprise and business frontiers, you can pretty much guess where Cisco will focus efforts. Like most everyone else in the IT industry, Cisco sees SMB (small/medium business) as among the most promising “green fields.” But don’t expect to buy an 800-series router at your local Office Depot or Future Shop anytime soon. Commodity won’t be Cisco’s game, but rather where a customer desires feature-rich function beyond mere feeds and speeds – things like integrated firewalls, voice/data capability or caching capability, for example – is where this company will fit in. Cisco won’t be the cheapest provider of SOHO and small business equipment.

Not everything discussed in early December was a rehash of the old. Between the familiar lines were interesting and meaningful highlights. In his keynote, for example, Chambers talked about a telling move by Cisco towards chassis-based products – equipment that’s built to stay put for many years, where customers would add functions, features and capabilities through various blades and drop-in components to a switching/routing product.

Such network gear is designed to have a long lifespan. While a fundamentally new product approach for Cisco, the idea harkens back to the days of old-time Cisco rival Cabletron Systems, a company that for years successfully marketed a high-end chassis-based switch called an MMAC in likewise similar fashion. The MMAC for Cabletron was pretty much that company’s mainstay. Cisco says it would not simply build a product that allows users to add ports and additional bandwidth, but will also offer the drop-in functional features, such as the aforementioned integrated security and voice/data.

The future for enterprise products sees voice integration in routing and switching, with richer QoS, built-in call processing capability and extended voice features. Integrated network security will mean built-in VPN, intrusion detection and firewalling. Content networking will see the utilization of caching in network equipment, which might be used to move video packets and distribute e-business and e-communication applications to the edge of networks and close to users. Remote access, among other things, will mean high-performance wireless technologies driven at closer to wire line speeds. All are features which users can expect to see incorporated within various routing and switching gear.

Upon reflection, it’s probably safe to say that old news came as good news. It might be argued that Cisco’s current relatively conservative posture is totally appropriate. Given the current IT market collapse and the particularly depressed state of the network equipment industry in general, that one company exudes industry leadership, plus remains viable and entrenched in its core product and solutions strengths is a comfort for many Cisco customers. Ask most people whom they believe will re-emerge from the IT doldrums as the leading networking solution provider and Cisco’s name will be cited much more often than anyone else.

Throughout the conference, Cisco reinforced its success story through familiar practices. The company remains highly focused on a strategy of driving technology adoption and understanding, is committed to focusing on the communication needs of customers and partners, and is still the most important network company around.

Would you recommend this article?


Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.

Jim Love, Chief Content Officer, IT World Canada

Featured Download

Related Tech News

Tech Jobs

Our experienced team of journalists and bloggers bring you engaging in-depth interviews, videos and content targeted to IT professionals and line-of-business executives.

Tech Companies Hiring Right Now