Editor's Note: Cisco Aims To Lead In New Markets

If you ask John Chambers about Cisco Systems' success, he'll say the company has been "lucky." That it's been in the "right place at the right time."

Ask a competitor what it's like playing in the same market as Cisco and you'll hear, "Cisco's not a competitor. They're a force of nature." Those are the words of Alan Cohen, a VP at Airespace, a wireless LAN provider just a short distance away from Cisco's sprawling campus in San Jose, Calif. Cohen believes there's room in the market for a "killer No. 2" player.

Ask a customer what business Cisco is in and the answer will be vastly different than it was a decade or two ago. Back then, Cisco was the router and switch vendor. The company provided the stuff that moves traffic around and between networks. Today, Cisco is a storage vendor, a security provider, an infrastructure provider.

Ask John Chambers what business Cisco is in and he'll tell you he's not just in the technology architecture business, he's in the "business architecture" business. Indeed, while the company--which spends a whopping $3 billion on research and development--keeps a strong focus on innovation and advanced technologies, it's moving into something much more than product delivery and technology architecture. That means helping customers with business-process changes, workforce optimization, business alignment, productivity, and, more ambitiously, business-process transformation.

It's a strategy that will require the company to move more aggressively into services and consulting. That wasn't always part of the plan, but strong customer demand convinced the company it's the right direction. For more on the direction in which Cisco is headed, see "Cisco's Second Act."

Stephanie Stahl
Editor-in-chief
sstahl@cmp.com

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