Cisco CEO John Chambers looks ahead

Network World, 12/11/00

Cisco CEO John Chambers took a few moments last week at the company's annual analyst conference to share some thoughts with Network World Senior Editor Jim Duffy, including the company's plan to move more aggressively into the software market.

Will sales into the enterprise and commercial markets be enough to off- set slowing growth in service provider capital expenditures?

We are not immune to changes but are buffeted differently than competitors, including in demand creation. We're not as affected as players on the edge of these markets. Their decisions to exit the enterprise market is a short-term approach. Enterprises are not outsourcing at the rate people thought they would.

How will you adjust your financing through Cisco Capital in light of slowing growth in carrier spending and the shakeout in the CLEC ranks?

We finance not as a subsidy for sales but as a means to help new markets grow. We will continue to be more conservative than our peers but there is risk involved. We'll also be more selective in terms of a customer's path to profitability, growth and competition.

Is the charter of the Internet Business Solutions Group to push the AVVID architecture, and follow-on Cisco products, into enterprises?

It's to show how applications can be applied to change the process. It's not to push AVVID but to convert enterprises to new e-businesses. It's to help customers do this.

Which of your competitors are you watching most closely? Who's executing the best?

I like all of my competitors. I like all the CEOs at all of them. But this is where Cisco has been unbelievably lucky. There's no substitute for luck. It was a tremendous gift that vendors exited the enterprise market.

But we tripped because Juniper's been more aggressive. We didn't market effectively. They outmarketed us this last year. But [in high-end routing] where are Lucent, Nortel, Alcatel and Siemens? Our target market share is 40% to 70%. You'll see us be more effective in marketing the high end.

Does your plan to move higher up the stack put you into more of a competitive situation with existing and potential partners?

We will play in the middleware area. We listen to what our customer needs are. We will first partner, or we may participate and then play. Or it may be a combination of all of the above. We don't strategically partner and then compete. We will compete to an extent. There's a natural gray area where there will be overlap.