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Cisco CEO on emerging markets, security

Cisco Systems CEO, John Chambers, talked about competition, partnerships, security and emerging markets to reporters at the company's recent 11th annual Worldwide Analyst Conference. Excerpts from the question-and-answer session follow.

On facing competitors. There is a logical evolution of competitors. Every five years there's another set of competitors. We have to have healthy paranoia, so we worry about everything imaginable. We've been in China for 21 years and have always been comfortable and No. 1. Most of our competitors in the future will be in Asia. Today, Dell is our toughest competitor. But we are very good at competition.

On Cisco's new focus on emerging markets in 129 countries. We'll sell architectures and systems in emerging markets, as opposed to products, and we'll work with the countries' leaders to drive the success of [that] country, because the success of the country is success for us. Emerging markets are now 10 percent of our revenues and represent 30 per cent to 45 per cent of our future growth. That's how strategic this market is.

The Internet knows no boundaries, and there's no idea of gender, race or class. We are attempting to be the first truly global citizen. That's what the Internet is all about. Our goal is to be in every country, and the Internet can be the equalizer. Every person should have access to the Internet. We are already in 164 countries with network academies, often bringing the academies in before we conduct other business, working with the United Nations and the World Health Organization to determine how to be effective. Corporate citizenship is the obligation of most successful companies to give back, but it's also just plain good business.

My vision is very simple. You will be able to get access to any information in any format anywhere in the world over any combination of networks. I think the network can change the world. It's not perfect, just like education's not perfect, but it's one of the equalizers.

On the possibility of partnering with Nortel Networks and other direct competitors. I have a lot of respect for Nortel. With all the Internet networking providers we compete aggressively [for] customers, but privately, we have a lot in common [with Nortel], and that's partly because the Internet is so open. I know the leaders of these companies personally, all of them. We work on issues of common interest, such as how to treat stock options and broadband growth, which is a national priority. We've been open with Lucent, Alcatel, Siemens and Nortel.

With Nortel, I've tried very hard to establish a partnership for 10 years. Any time there's leadership change [such as at Nortel], it's time to review things. But I'm not overly optimistic for a partnership with Nortel.

On security vulnerabilities with Cisco IOS and other products. Security is something that will be with us for another decade and beyond. As quickly as you evolve a solution, another set of problems comes up. We made the decision as a company 10 years ago that security was an architectural play, and acquired 15 companies to handle the problem -- and have over 1500 Cisco employees in the security area. We have begun to build self-defending networks.

Like any architecture that works end to end, there are elements you add to constantly improve, and it's a constant battle. Do we have issues we have to address with security? Yes. And we encourage security researchers. But you don't get ahead by putting [a vulnerability] on the front page of a paper, because you hurt everyone. Let us address it and find the right way to go about [fixing vulnerabilities]. We have 60 partners working on Network Access Control. You can call us the Switzerland or a leading player in this partnership.

This challenge will slow down the whole industry. Most security researchers want to help and don't intend to hurt people. We don't [want] anybody to take this tremendous asset and cause exposures, to bring down hospital networks and 911 networks.