As part of its long-term objective to migrate voice apps from circuit-switched to IP networks, Cisco has begun delivering software that will let its customers better deal with their own clients--no matter what medium (voice, Web, or E-mail) or network (plain old telephone service or the Internet) those clients use to communicate with them. By ensuring that its customers' customers have the kind of support experiences that turn them into loyal clients, Cisco says it ensures its own prospects.

"Customer success is Cisco's future revenue," says Chambers, who estimates he spends about half his time with his company's own clients. With that in mind, Cisco has just created the Applications Technology Group (ATG), a division so new that Eugene Lee, its VP of marketing, is still carrying business cards listing his former position in the Small/Medium Business Group.

ATG consists of "application infrastructure" products acquired through Cisco's purchases of GeoTel Communications, which develops call-center software; Amteva Technologies, which makes unified messaging software; and WebLine Communications, a provider of Web-collaboration and E-mail management customer-service tools. Lee says the market for these products includes users in high-touch industries ranging from financial services to retailing, who want to beef up in-house call centers or purchase managed call-center services.

SmarterKids.com Inc., an online toy retailer, began using Cisco's Customer Interaction suite in November to provide shoppers with a better experience during the holiday season. "Customer service is a strategic competitive advantage for us," says Rich Secor, SmarterKids. com's CIO and VP of IS.

As part of its SmarterTalk initiative, SmarterKids.com uses Cisco E-Mail Manager to sort incoming messages by keyword or according to the customer's correspondence trail, or both, and suggest template replies based on SmarterKids.com's rules. Its chat capabilities let the retailer offer instant responses at the moment buyers need them, Secor says.

Customers such as SmarterKids.com will help ATG establish Cisco's first software business. "We'll identify and penetrate large and growing software markets, and deliver products independent of hardware, though they'll sometimes create pull for our gear," says Lee. Cisco won't specify revenue goals, but says it expects application technology to be a $16.5 billion market by 2003.

The ATG products are designed to leverage businesses' existing databases, customer response policies, and support staff--usually regardless of the network they run on. But Cisco hopes the products will accelerate the convergence of call-center apps over IP networks. For example, Amteva's unified messaging software requires a Cisco remote access server. While that's not true of GeoTel's and WebLine's products, which Cisco will continue to sell separately, Lee says those apps could be optimized to perform best on Cisco gear.

SmarterKids.com, which has a Cisco Catalyst switch with quality of service at its network core, likes the idea. Secor says integration of the suite into Cisco hardware could let it offer more advanced services. But for now it's evaluating additional equipment from both Cisco and Lucent for a planned voice-over-IP project. It wants to use Cisco's Media Blender to let customers receive call-backs from sales representatives who can converse with them by phone while both browse the Web site.

Cisco is implementing Media Blender on its online customer-support site, a critical piece of its own extensive E-business infrastructure: The Technical Assistance Center handles about 80% of all support requests. This latest innovation follows a history of innovations, going back to the day Cisco's married founders, Len Bosak and Sandy Lerner, devised the first routing software while working at Stanford University. The company, launched in 1984 with $2.5 million in venture capital, was also an early adopter of the seminal Mosaic browser as a support tool.

Cisco has also been among the first to succeed in using the Internet for E-commerce. It ranked third in InformationWeek's E-business 100 innovators survey, ahead of Nortel and Lucent--vendors it will increasingly compete with as it pursues deeper relationships with service providers.

Senior VP and CIO Pete Solvik, who has headed Cisco's IT efforts for seven years, has seen to it that Cisco has electronically enabled itself, from employee processes to interactions with customers and suppliers. "The Internet is not about putting a thin dot-com veneer on a brick-and-mortar company," he says. "It's about fundamentally transforming a company from the inside out."

True to that spirit, Cisco sells nearly 80% of its products over the Internet. It electronically delivers orders to 50 manufacturers that build its gear, and remotely tests the hardware, cutting delivery time to users from 23 to 10 days. It's so critical for every part of the organization to be in step with this E-business structure that IT has a key role in each acquisition (see sidebar story, IT Takes Starring Role In Cisco's Acquistions Adventures).

Cisco says its initiatives have saved it nearly $1.5 billion over the past three years and boosted employee revenue by 20%. Customers such as Coral Energy have been impressed enough to turn to Cisco for advice on building their own E-business networks. Coral, which sells natural gas and electricity to local utilities, is one of the 100 major companies that have consulted with Cisco's Internet Business Solutions Group (IBSG), a 100-person unit formed in 1997 that also consults with service providers.

As a result of that meeting, Coral now offers interactive tools on its Web site that help customers calculate the probable price of energy in six months, a service its customer reps used to handle over the phone. Coral has also created an online marketplace for buyers of natural gas and energy. VP Thompson says initiatives like these have freed up Coral service reps to engage in more meaningful consulting sessions with customers.

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Illustration by David McLimans
Photo of Secor by Matthew McKee
Photo of Solvik by Gary Parker