Cisco: Networking still strong, helping to grow new markets

In the world of technology - whether it's voice communications, video sharing or even energy efficiency - everything comes back to networking and routing.

No matter how much Cisco has altered its strategy or taken on new product lines, everything comes back to its core business: networking and routing. At the Morgan Stanley Technology Media & Telecom Conference today, Ned Hooper, Chief Strategy Officer & Senior Vice President for the consumer business at Cisco, talked about the transition from legacy business models to a new strategy that not only incorporates but also drives new technology - and for non-traditional customers, as well.

Some examples: Cisco has gone consumer with its acquisition of Pure Digital, maker of the Flipcam devices. How does that play into the core strategy for Cisco? The company is betting big on video as a form of communication. The Flipcam, with its plug-in-and-share technology, makes it easy for consumers to share video over networks or the Internet. That's connected communications - aka, networking.

What about video telepresence technology? Again, this is just networking video connections. But it's a initiative that sparks interest among business customers because it's a money saver for them. If folks from remote offices around the globe can virtually meet and talk business via video, a company stands to save a lot of travel dollars.

Hooper was asked a fair-game question about the potential for growth. Can there be growth in mature markets, as opposed to the emerging markets where routing and networking broadband is a new demand? The answer was a good one. There is potential for growth in mature markets - consider the smartgrid initiatives that might involve both utilities and consumers.

The energy infrastructure has gone decades without an update. But through Cisco's technology, the utilities can build information and knowledge into the power distribution network so they can not only operate more efficiently but also help their customers to better manage their own power consumption. For example, the company is working on launching some pilots this summer that basically puts a router-like device into a home so that the energy consumption data networks with other information databases so the consumer knows, for example, how much he is spending per hour by running the air conditioner on a hot summer day - in real-time, not just when the bill arrives.

Hooper said the economic downturn enabled Cisco to do more than just cut expenses. It allowed the company the time to take a step back, look at its core, as well as adjacent markets, and make the necessary moves to position itself for the economic recovery. That's where it is now. The company sees itself well -positioned with a strong portfolio and positive spending trends on the horizon, across all business segments.

Sure, Cisco was positioning itself to be more than just a networking and routing company - and it's largely done that. But it certainly hasn't shifted away from the core as it's repositioned itself. On the contrary. Hooper said networking is in greater demand today than it was 15, 10 and even five years ago.