Chambers Dares Competitors To 'Keep Up' With Cisco Pace

Cisco Chairman and CEO John Chambers said Thursday that Cisco has become No. 1 in every market it's bought into by recognizing and capturing market transitions as they're happening.

"We're going to set a pace that we dare everybody else to keep up with," he said. Failure to catch a market in transition and waiting until it becomes obvious, Chambers added, means "you're going to get clobbered."

In a keynote speech to close out the Cisco Partner Summit in San Francisco, he thanked partners for sticking by Cisco during the economic downturn and for helping Cisco make the downturn "the greatest opportunity" for growth.

Chambers' hour-long speech included pride for Cisco making improvements to each of its major product areas, and praise for how it has continued to succeed through acquisition even when, Chambers say, 90 percent of acquisitions in the IT industry fail.

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Not only are Chambers' oft-mentioned 30 "market adjacencies" -- markets, from video to consumer to sports and entertainment where Cisco is poised to play -- expected to grow, but Cisco also plans to add more adjacencies in the coming years. Speed, scale, flexibility and replication are the hallmarks of the growth strategy, he said.

"The innovation engine is cranking," Chambers declared, describing how that Cisco's "playbook" for moving through downturns had served it well in the past and helped it return to growth earlier this year. All 30 of the adjacencies in which Cisco plays, he explained, are "on or ahead of my expectations."

"We won't maintain that, but all 30 look like they're moving rapidly," said Chambers, describing how Cisco had moved to capitalize on everything from consumer video products, such as the Flip, to data center architecture, as in the Unified Computing System (UCS). "They aren't 30 silos. All 30, if we do it right, will come together, enabled by the network."

Chambers said that Cisco has no plans to slow down, either.

"Each time we move, we move with the transitions in mind," he said.

Next: Chambers Mentions HP Rivalry

Chambers also referenced partners' ongoing supply chain woes, admitting that Cisco had "misread" the market decline last year and was working to rectify the situation.

The speech included references to Cisco rival HP that were mostly oblique -- "your competition is sitting there selling boxes and telling about how their parts can be purchased cheaper" -- but in one case direct, as Chambers compared what he said were 7 industry benchmarks achieved for Cisco UCS compared to "one for IBM and zero for HP."

"We have no fear of competition or economic challenges," Chambers said.

He added that the consumer category had become one of Cisco's most important areas of interest in the past year, and that simpler technology design -- such as that seen, he referenced, in Cisco's recently released Valet wireless products -- would drive a lot of Cisco innovation going forward. He referenced a slide Cisco presented at the Consumer Electronics Show ten years ago, in which it predicted that business would drive the first set of technology innovations in the 2000s decade, but consumers would drive the second phase.

"You have to think consumer, ease of use, and it's got to be CEO idiot-proof," he said. "We need the ability to think more from a consumer mentality. While Linksys was spectacular, it was designed for real techies."

Chambers later demonstrated, with the help of John Grubb, chief demonstration officer, how technologies like Cisco Quad, the suite of collaboration products that includes social software, and home TelePresence conferences demonstrate new customer paradigms. In a glancing reference to Apple while demonstrating Cisco WebEx for iPad, Chambers said he admired the product.

He praised partners for helping Cisco reach, what in April 2010, is a $152 billion market capitalization -- better by a wide margin than its top 12 competitors, Chambers said.

At the end of Chambers' speech, Keith Goodwin, senior vice president of worldwide channels at Cisco, announced that the 2011 Cisco Partner Summit will take place in New Orleans.