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Chambers Talks Internet Phase 2

I first wrote about John Chambers back in 2001, just before the tech bubble burst, in a lengthy profile for The Industry Standard. At the time, Chambers was still predicting that Cisco would go on growing its revenue at 35% to 40% indefinitely. As even a lowly tech journalist could predict, that didn't happen: Cisco went from being a phenomenal engine of growth to a solid tech giant growing at more like 10% to 15% a year. Chambers managed that shift adroitly, and today, now that Bill Gates has stepped aside at Microsoft, he's one of the two or three longest-serving CEOs of major U.S. tech companies.

Now he's facing another major shift: transforming Cisco from the world's largest supplier of switches and routers for wireline networks to the premier vendor of wireless network infrastructure and enabler of new forms of collaboration and innovation for enterprises.

Cisco has been talking mobility and collaboration for a long time, but today's keynote address by Chambers at Interop marked the debut of the company's unified theory, as it were, of mobility, wireless, and new network-based collaboration tools.

Chambers looks much the same as he did six years ago, though his comb-over is more gossamer than ever. (Give it up, John! Shave your head! Pierce your ear!) He started out talking about market transitions and "Phase 2 of the Internet," and boasting about Cisco's ability to catch market transitions three to five years out. He also used one of his pet phrases, which holds as little meaning now as it did when he started using it a few years back: "the Network becomes the Platform."

"You're about to see the next wave of productivity," Chambers said. "It will be the wave of collaboration and Web 2.0."

Cisco's "mobility vision" centers on three new product lines: the "Location Solution," for hospitals and clinics, a pair of "In-Store Mobility Solutions" for retail outlets, and an oil-and-gas facility system called the "First Mile Wireless Solution." Chambers didn't provide details on any of these. None of these technologies is especially groundbreaking, though the in-store equipment includes a nifty shopping-cart terminal that allows faster check-outs, "personalized service," and the like. Chambers' talk was full of Web 2.0-speak we've been hearing for a couple of years now: "The ability to innovate in a new-world fashion." "How do I get flexibility in IT?" "How does IT enable the business strategy?" "How do you realize execution in 12 to 18 months?" And so on.

Chambers kept saying, "I'm going to be controversial today," but I didn't hear a lot to argue with, other than the claim that a new era of 3%-plus productivity gains, driven by collaboration and Web 2.0 tools, is upon us. Much of the first half of the speech was Chambers bragging about the past: Cisco eating its own dog food, applying its technology to its own business processes to achieve rapid growth ("That's why we have a $160 billion market cap," Chambers said). "Cisco 3.0" is changing its business models, Chambers said, but exactly how other than using instant messaging, a "council" of top executives, blogs and wikis, etc. to drive innovation, was not clear.

"Command and control is not the future," Chambers said. "Group innovation and collaboration and presence is the future. ...This is about innovation, the next wave."

That's fair enough, but Chambers was short on not only controversy but specifics, particularly about the new "mobility vision." Saying you evolve a business hierarchy into a blended version of the two models -- command/control and group innovation -- is not really immediately useful to IT pros who are making day-to-day decisions on the fly. Chambers talked more about what Cisco is doing internally (growing emerging market revenue at 42% a year while preserving margins comparable to developed markets, for instance) than about how it's going to enable growth and change for its customers.

What matters in the market is that Cisco has the most comprehensive array of networking hardware and capabilities, including a dominant leadership position in the wireless LAN market, plus the world's most powerful web of channel and reseller relationships. If any company can turn the confusing and risky quilt of collaboration, mobility, and wireless products into a cohesive and integrated set of proven business applications, it's Cisco. Chambers' keynote this morning was a decent set-up pitch. Now it's time to see if Cisco still has its legendary closing ability.

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