A few years ago, networking giant Cisco Systems would have left Comdex to the computer vendors, but in the age of the Internet, Cisco's bread and butter products - routers, hubs and switches - will be at the core of how all electronic devices interconnect in businesses and homes, said John Chambers, president and CEO of Cisco, in a keynote speech at Comdex last week.
Cisco is forecasting $US15 billion to $20 billion worth of sales by 2000 as businesses, homes and schools hook up networked PCs and other devices to the Internet, Chambers said. In three years, every vendor at Comdex will have to have network connectivity for their products on display, he predicted.
"The Internet will change the way we live, play, work and learn," Chambers told a large crowd of Comdex attendees. Not only are businesses realising the need to network with suppliers, partners and customers, home users and education officials are also ready to cash in on the networked world, he said.
The way forward for Cisco, Chambers said, is to partner with computer manufacturers, semiconductor companies, software developers and electronic device manufacturers to make sure that all hardware devices will be able to connect to the Internet and to each other. The company has made little secret of whose side it's on, choosing to partner with Intel, Microsoft and Hewlett-Packard, but this doesn't mean Cisco will make products that only work with the Windows/Intel platform, Chambers said. Connecting "unbelievably complex" networks based on heterogeneous hardware and software is Cisco's specialty, Chambers said. "The more complex the networking market is, the better off we are."
Rethinking business strategies
Companies that don't understand the importance of being networked to customers and business partners will ultimately suffer in the coming years, Chambers said. Traditional retailers must rethink the way they do business by offering value-added services to customers who actually come into the store instead of buying products online, he added.
And it isn't just businesses that need to put a lot of money and energy into networking. Educators need to get with the program and connect machines in the schools together over the Internet, Chambers added. Cisco, for its part, is pushing its Network Academies program that teaches high-school students to install and maintain Cisco hardware, Chambers said.
And home users won't be far behind schools, he added. Many homes already have more than one PC and the explosion of Internet devices in the home, such as set-top boxes and network computers, will only complicate matters, he said. Users will want to network together all of the devices, with one source of high bandwidth shared by all of the machines, he said.
Right now, 85 per cent of Cisco's revenues come from the corporate market - where it has surged ahead of competitors Bay Networks and 3Com. However, Cisco plans to focus more attention on the growing home and education markets in the next few years, Chambers said. The trend of more people working from home and in small businesses will drive the networking requirements of these markets as well, he said.
But while Cisco has a large lead in the networking marketplace right now, it isn't content to rest on its laurels, Chambers said. The company still views Bay, 3Com and Cabletron Systems as formidable competitors, he said.
"We're the kind of company that makes (CEO and president of Intel) Andy Grove's paranoia look relaxed," Chambers joked, adding that he isn't satisfied with Cisco's pace of growth and progress in any realm. To be even more successful, Cisco will need to become more nimble and quicker to get products on the market, he said.