Cisco Systems Chairman and CEO John Chambers recently sat down with VARBusiness Managing Editor, Technology, Jennifer Hagendorf Follett to talk about the impact VoIP, collaboration and Web 2.0 are having on the future of the network. Edited excerpts of the conversation follow.
VoiceVAR: Cisco has been moving well beyond just selling routers and switches. Is it still appropriate to call Cisco a networking company?
Chambers: Well, I think the network will become the enabler of all forms of IT and communications. So our core competency is the network capability. But the network's moving from being dumb plumbing, if you will, to enabling business solutions which change not only the way we work, but the way we live, play and learn. And so the relevance of the network is evolving and, with that, Cisco and our partners will have to evolve as well. The nice thing is this is an issue that means a large amount of growth and profit opportunities for us all.
VoiceVAR: Given all the pies you have your fingers in, which one technology do you think is really the indicator of where this company is going?
Chambers: Maybe this is the right way to answer it--the key area that probably we are architecting more than anybody else is the movement toward collaboration enabled by network tools called Web 2.0. ... Instead of doing one or two [major projects] a year, I can do 20, and 20 may end up being too conservative. It will be the productivity generator for the next decade.
VoiceVAR: What are the ways that you think your channel partners need to move to really latch onto this opportunity and make the most of it?
Chambers: Well, the exciting thing is we're all proud to be plumbers. And plumbing is a very honorable profession and it has been very lucrative for us all. And we can continue to be plumbers, or we can take plumbing and move it to intelligent networks and begin to provide solutions. So each of us in our partnering mode has to decide what is our opportunity and appetite for evolution and realize that [if] we just really install products and make them work that we'll not have near the margins as if we're able to bring solutions to customers and capabilities in business model change.
VoiceVAR: What then is the biggest challenge you're facing with Cisco and then separately, what's the biggest challenge facing your partners?
Chambers: I think our challenge is the same. How do we evolve from selling boxes to systems and solutions? And remember from the first day I came here I moved us from a direct approach to the market to a channel approach to the market, which is what we will continue to be. So it's how do we together evolve to where this market is going, not to where it has been in the past.
VoiceVAR: To be fair, that's the message that you have been putting out to your partners for several years now. Are there specifics that make it more difficult now than it has been in the past?
Chambers: It's actually accelerated now, because a lot of the basic concepts on collaboration are now taking off. A lot of the acceptance of Web 2.0 technologies, which many people would have said, "No, that's just for the young people or that's what our kids do," what they are now realizing that in business ... with replicatable processes built into these capabilities, it probably will be the next frontier for productivity. Put a different way, the network will probably enable the next major wave of IT spending as well as communication spending. So the role of the network has changed--it's changed from being infrastructure, primarily a box mentality, to an architecture approach that provides business solutions.
VoiceVAR: With so much more emphasis now on applications, do you feel like you have the right set of channel partners to make that push?
Chambers: There will be certain channel partners who primarily stay within a product area or a solution type area, there will be others who architecturally play across the whole gamut. ... As we move into Software-as-a-Service and other related areas--bandwidth-as-a-service, storage-as-a-service, processing power-as-a-service--how do we sell differently and how do we evolve as an organization? So if we do our job with our channel partners, we outline where we think the industry is going, here are the multiple areas we can work on together, and then each of our partners have to say here's where my expertise is and here's where I think I can have sustainable differentiation and then here's where I need to go.
VoiceVAR: Given your planning cycle of three to five years, what's your vision for what Cisco will look like in five years?
Chambers: The future will be about any device to any content and it will be about intelligent networks. The second thing is that everything will come as a service. It will start off with Software-as-a-Service, but there will be services-as-a-service, you will be able to buy technical support from our customers on either a contract basis or on an as-needed basis. ... If you think of Cisco three to five years from now, we have the opportunity along with our partners to be the most influential company in the world, not just on communications, but also in IT. And the role of the network will evolve dramatically, moving from merely transport or plumbing to more of an intelligent infrastructure that makes it completely transparent to where your applications are, where your storage is, where the processors are, what type of device you're on ... your services automatically find you and move to you.