Chambers Espouses Views on Being Connected

By Jeffrey Burt  |  Posted 2001-11-12

LAS VEGAS—The future for business will be a blend of the traditional and the new, according to John Chambers, president and CEO of Cisco Systems Inc.

As always, the winning companies will be those that can quickly gain market share, boost productivity and increase cash flow.

However, what will fuel those gains will be how well a company is connected to its partners, customers and employees via the Internet, Chambers said Monday during a keynote speech here at the Comdex trade show.

"Its a race about products, about cash flow and about productivity, and that will determine the winners and losers," Chambers said. "But its the networks that connect these products and applications."

Chambers, whose company is the leader in networking technology, laid out his vision of a networked virtual organization, one where employees can communicate with the same ease whether by desktop PCs, wireless devices or handheld products. These companies also will extend that network outside of its doors, where its partners and customers can access products and services just as easily regardless of the devices.

The result will be a company that is saving money by streamlining its operations and improving productivity while at the same time branding itself as a good company to do business with. And that will increase with what Chambers called a "wave after wave of applications [added to the network], and wave after wave within the applications themselves."

"It will not only be the fast beating the slow, but also the fact that already has their strong cultures, their brands, that will win," he said.

Often leaving the stage and walking among the audience that filled about three-quarters of the room, Chambers used hotels as an example. Those that can combine voice, audio and video into one access point will be more likely to attract business executives.

"I can run this company from anywhere in the world, with the right connection," he said. "Its this mobility that gives you that flexibility."

Chambers also said that its during times of economic downturn that companies can gain—and lose—the most market share, and that its the businesses that can differentiate themselves from their competitors that have the greatest chance of surviving.

He used Cisco, which has been as hard hit by the downturn in the economy as any company, as an example, saying that the company has continued gaining greater market share over rivals such as Lucent Technologies Inc. even as the economy has struggled.

During its earning announcement last week, Cisco said that first-quarter earnings dropped to $332 million, from $1.4 billion during the same time last year. Revenues also dropped 32 percent.

However, sales jumped sequentially by $100 million.

Chambers said Monday that Cisco and other successful companies will be ready with new products and services once the slide in the economy stops and business begins to pick up.

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