Internet is no longer ‘Nice To Have’, it is a Matter of Survival

He is the man credited with the growth of Cisco at a break-neck speed of 18
times over the last 5 years, and responsible for continuing the 55-60 percent
growth rate year on year. Lauded by many as the Internet era’s best salesman,
John T Chambers is praised for his customer-focus and hard working ways. For the
young, vibrant company that he presides, Chambers manages to combine traditional
values with relentless aggressiveness. The tough side of him comes out in Cisco’s
acquisition record (55 in the last decade) and the extent to which he would go
to win a customer. With the zeal to imbibe a Cisco culture, he continues the
famous Cisco frugality set by his predecessor John Morgridge.

The stage for John Chambers first visit to India this month already set,
Cisco India expects his visit to not only have an impact on Cisco’s interests
in the region but also influence Indian businesses and the government into
building a success strategy for the Internet age. In his first interview to an
Indian publication, he expresses some of his views…

Is there a Cisco way?

Our mission is to create unprecedented value and opportunity
for our customers, partners, employees, and shareholders. We do this by taking a
fanatical approach to customer success and tying compensation for all employees
to performance on our annual customer satisfaction survey.

Our relentless focus on our customers, together with healthy
paranoia and a little Cisco luck, has positioned us in the right place at the
right time. I believe the Internet is going to change the way companies,
countries, and individuals work, live, play and learn, and Cisco is proud to be
playing a key role in leading the Internet economy.

Did you make IP or ride on it?

Although Cisco has contributed to the ongoing development of
IP, its true importance lies in what it enables, and its open-standards nature.
Companies are increasingly moving away from proprietary solutions to
open-standards based solutions.

In a world of plenty, the core network is getting more
standardised and ‘dumb’. And that is where you play. What are your comments
on this?

A. As we have transitioned our company over the years, from a
vendor of pinpoint products, to an end-to-end vendor, to a data/voice/video
solutions provider and finally a business partner, our customers’ expectations
have increased. As a result, networking is becoming increasingly intelligent.

Just 4-5 years ago, Cisco was grouped along with players
like 3Com, Bay Networks, and Fore Systems. How did you leave them behind–both
in terms of marketshare and mindshare?

A. Our past success has been based on the ability to deliver
solutions that provide data, voice, and video over a single network, and our
ability to blend internal development, acquisitions, and partnerships.

Cisco has a culture based on empowerment, which increases our
productivity and improves retention within the company. The unique element of
our culture is that we believe we can do anything, yet we also realize that we
could quickly lose our leadership position if we mis-execute or if our
competition executes well.

Today, the Internet is causing rapid change and creating
disruptive market transitions in not only the communications industry, but also
on nearly every sector of the economy. Our future success will be based on our
Internet expertise and our ability to help our customers successfully navigate
through these market transitions.

Integration services are missing from Cisco’s offering
portfolio. Without that, can you really challenge the likes of Lucent and
Nortel? And what about the new generation companies like Juniper, Sycamore,
Redback, and Corvis?

A. With respect to competitors like Lucent and Nortel, we use
a horizontal business model that relies on an ecosystem, an open standards-based
partnership community that works toward a common goal. I believe companies that
partner will emerge as the market and industry leaders of the future. Through
partnerships with companies such as KPMG, Cap Gemini, and others, Cisco offers
world-class, end-to-end integration services.

Our best competition comes from start-up companies. We will
have more market share five years from now on because of good competition.

Is the Internet Business Solutions Group also going to
take up the services role in network rollouts of large telecom carriers and if
so, by when?

A. Cisco’s Internet Business Solutions Group (IBSG) is
dedicated to transforming our customers into Internet economy organizations. As
a result, Cisco is viewed as a trusted technology partner and business advisor
to many of the largest companies in the world. IBSG has already cemented Cisco’s
relationship in many of our enterprise accounts and is starting to have similar
effects in the service provider marketplace as they transition to new service
business models.

A typical sales cycle involves responding to
Requests-for-Proposals that are often defined by individual product offerings.
IBSG takes Cisco’s sales approach to the next level by demonstrating the value
of deploying Internet applications and services, which in turn creates a demand
for our technology and solutions. As a result, our vision of delivering a
network infrastructure that is tightly coupled with the requirements of Internet
business applications, is gaining significant acceptance.

For network users, tackling network issues is the prime
concern, not how to derive benefits from the network. Till when will this
continue?

A. We are seeing just the opposite. Our Internet Business
Solutions Group has consulted with executives in more than 50% of the Fortune
250 companies, 45% of the top companies in Europe, Middle East, Africa, and
Asia; and 65% of the leading service providers. This group provides
business-strategy consulting and helps move our relationships with them from
that of a vendor to a strategic partner.

We are not only a technology advisor, but also an advanced
user of Internet technology to run our own business. The adoption of Internet
applications in each of Cisco’s functional areas is an integral part of our
business-planning process and results in tremendous productivity benefits and
costs savings. During this past fiscal year for example, 90% of our customer
orders were transacted over the Internet.

Do you think innovation is really happening today?

A. The pace of innovation in the business world is occurring
at an increasing rate. I truly believe that the companies that will lead are
those that take advantage of Internet-based technologies to reinvent their
businesses. As I said before, it is no longer ‘nice to have, it is a matter of
survival’.

Nareshchandra Laishram