Cisco's Chambers sees collaboration fueling productivity gains; Web 2.0 as new enterprise engine?

Cisco CEO John Chambers said Tuesday that there will be an "instant replay" in technology-led productivity gains in the current downturn just like the U.S. saw in the mid-1990s.

The difference this time around: In the mid-90s those productivity gains were based on big enterprise resource planning rollouts that could wreck a company. Today, Chambers is talking implementations of Web 2.0 tools and collaboration.

And there's a payoff. Chambers said that collaboration tools and Cisco's Telepresence technology saved the company $150 million a year in travel expenses. "For the first time collaborative IT will be so intertwined with the business strategy you won't know the difference between the two," he said.

In a question and answer session with Gartner analysts Ken Dulaney and Tom Bittman at the Gartner Symposium ITxpo, Chambers said in some companies IT is viewed as an expense. In others, IT is viewed as an advantage. Those two flavors of companies will see vastly different IT budgets.

Chambers, who noted that Cisco's IT budget will be up 10 percent, largely talked about his familiar refrains: Collaboration, Web 2.0 and the network being the hub of everything. In fact, it took Chambers about 45 seconds to say "Web 2.0." He talked about how Web 2.0 will transform companies and drive productivity. Chambers expects collaboration to see rapid implementation.

Chambers positioned the company as being more than a plumbing company to one focused on scale, productivity and collaboration. On that latter item, Chambers said the company has reorganized to focus on collaboration and walked its talk with its internal tools such as WebEx. He likened implementing Web 2.0 tools as the newfangled ERP system.

Among other topics:

• Chambers said Cisco has never been just a hardware or software company, but is learning on the fly to be the glue between the two categories. That glue is expected to be collaboration. On business applications Cisco will partner with Oracle, SAP and Microsoft to offer collaboration. Internally, Cisco has restructured itself around collaboration. For instance, there is no single head of engineering. Instead Cisco has a council of 9 top engineering heads at the company.
• Cisco sees the network becoming a service being pushed to any device--phones, TVs, DVRs. Chambers said Cisco will have 26 priorities this year, up from one or two in previous years. The new markets may take Cisco into new verticals such as sports and entertainment.
• On being visible on the desktop for networking, Chambers said Cisco wants more play on the desktop but with partners. He said he was pleased with Cisco's partnership with Microsoft. Chambers noted that Cisco intends to be a player in consumer virtualization and services.
• Does Cisco want to be involved with network management software? Chambers noted that Cisco has to add intelligence to the network, which requires common security and performance features. In other words, Cisco is already involved, but quietly with partners.
• Chambers said video will be a key feature for mobile phones. Voice will just ride shotgun. He added that he expects the bandwidth to be there. Deskphones will become more video and data than a tool for voice.
• Cisco is tracking the emissions and energy impact for its routers and other products. "Anything connected to the network can and will be green," said Chambers. "Smart grids will happen." Cisco is working with a bevy of cities to examine smart traffic flow, efficient energy use and property planning. Chambers argued that the network can be a green IT enabler.
• Chambers noted cloud computing will become a mesh of interconnected networks. Cloud computing "is just another evolution of the Internet." On software as a service, Cisco said WebEx use internally is up 2,500 percent with discussion forums and blogging has also increased dramatically.