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Cisco CEO predicts collaboration and video will fuel the next decade of productivity
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Extracts from John Chambers' keynote at Cisco Live 2009
"A new wave of collaboration will grow the productivity of the country at 5 to 10% a year," said John Chambers, Chairman and CEO of Cisco, at last week's Cisco Live 2009 conference in an invigorating keynote speech.
The last time such a productivity increase was predicted and did happen was in 1997 during the Clinton era, he said. "We are about to see the same thing reoccur," he said.
The fastest transition since the early 90s
Collaboration, unified communication and telepresence will lead the growth. Already video and web 2.0 community tools are changing the way we communicate today, soon they will rule the way business will be done, John Chambers said. These tools will enable to empower groups, to work across functions, to get access to the same data for all and to enable better decisions.
"This transition is going on today, more and at the fastest pace we have ever seen," he said.
"If you had told me two years ago that I would be blogging as my primary way of communications, I would have said: 'did you have a drink today?'," he said. And yet who could have predicted the 56,000 people using YouTube regularly, a 350% increase 350% from one year ago?
"This is about he future of productivity and collaboration," he said. "This about a ramp-up speed that I have not seen since the early 90s."
A moment of truth for leadership
"Economic slowdown is the hardest thing you ever do as a business leader, John Chambers said. "Whenever you have economic slowdowns, like we just went through, 20% of the companies who were leaders going into them are not leaders when they come out," he said. "This is the worst economic slowdown we have ever seen in our lifetime, that number will be 30 or 40%."
John Chambers illustrated his point about transition with the display of industry market capitalization between 1995 and 2005: only three of Cisco main competitors of January 1995 were still leaders in November 2005: Alcatel, Lucent, Nortel, whereas Cisco moved from $10B to $110B market cap. And look what happened over the last five years, he said.
"That's going to happen in every industry," he said. "It's how you deal with these market transitions, how you deal with them in good or bad that determine the future of the company and the future of a leader."
John Chambers also reminded the audience how in 1997, in the midst of the Asian financial crisis, Cisco doubled their bets as everybody else was leaving and became the market leader in every country in Asia.
Cisco walks the walk
Chambers intends not only to talk the talk but to invest in key areas such as sports/entertainement, digital signage, energy, video and security. "We are going to be extremely aggressive," John Chambers said. "We are going to move into 30 new market adjacencies this year alone, all of which will tie together, if the market plays out the way we think it can."
In the vision of the all-connected world - through a Cisco network, of course - John Chambers said it will not matter anymore where the data and the applications are located, on which server or on which mobile device or set-top box. You should be able to find the information and to get access to the content wherever and whenever you need it, through any device and any combination of networks for any content.
"You just want content on demand in the format you want," he said. "Once you purchase an entertainment or a record from an artist, or a video from Disney or ESPN, you can get access to it from any where in the world."
The tip of the iceberg is video
"It is not about a stand-alone device, the tip of the iceberg is video and telepresence," he said. Video is the killer app. It is going to be 90% of the internet traffic by 2012, predicts Cisco, from 30% today.
Video is going to be deeply embedded in what you do for healthcare, how you interface with your customers, how you interface with each other, John Chambers said. "Video changes how we work, how we learn, how we play, every aspect of our life," he said.
Cisco CEO also defended the role of the smart network architecture play versus any temptation to call it, say, a smart Apple device play. "It's not only about video transport in a dumb pipe, it's about intelligence in the video," he said.
It's about media solutions smart enough to automatically adjust to the screen size of your device, to capture the voice, to translate it into the language of your choice. Then you can capture the whole audio section to search into it or you can share it with your community of interest.
Interfacing with the cloud
The same transition will happen with electricity, with the addition of intelligence in utilities and environment management, with the connected home and smart grids. We are going to start with small buildings and homes, and then expand into the smart cities of the future, John Chambers said. Same thing for education, transportation, healthcare.
"We are going to see smart connected communities attached to any device, with local information from traffic flow to electricity, he said. Advertising models will change, software as a service has already begin to change, with cloud computing and consumer electronics interfacing to it."
"When you do that right, instead of talking about a 1,000 jobs per city, you are talking about 200,000 incremental jobs," John Chambers said. In the meanwhile, he promised no more large wave of lay-offs for Cisco employees.
