Cisco CEO John Chambers shared some specific thoughts on the service provider market - including 2006 goals, the role of video, and the impact of consolidation - with Network World President John Gallant and Managing Editor Jim Duffy. (See full interview.)

What are your specific goals for the Service Provider line of business this year?

Service Provider is obviously the most challenging in terms of marketplace because they tend to form allegiances and keep those for a very long time. I think they tend to have a philosophy of multi-vendor as being one of the ways they differentiate themselves. Time will tell if the market evolves, like I think it will, that the same strategy that drove enterprise customers to a preferred vendor… I think service providers are going to play a very key role on how the market evolves and I think they're naturally positioned to provide that to consumer and SMB, but I think their enterprise segment will be larger.

So we're going to continue to push on it very aggressively but it is probably the most challenging segment because the enterprise customers have largely made this decision. They understand the total cost of ownership and if they trust somebody enough with the track record and develop that to do this in total, you find them actually standardizing more and more. Can we achieve that in Service Provider? Time will tell. I think mathematically, given the industry's going to go through such tremendous pressure on transformation and on traditional revenue streams to new revenue streams, I think we have a very good shot at becoming the leader playing in this marketplace.

Where is Cisco most challenged in the Service Provider market?

I think a lot depends on how service providers make decisions. If they make decisions on individual products, then you have one set of competitors. If they make decisions on a systems integrator/tying them all together, then you have a different scenario. If you make decisions on how the products are architecturally designed… If this plays out the way that I think it will, we have an excellent chance of winning.

Now the area where if I had to do over and I would have brought my products together quicker is clearly at the edge. And that takes time. You will see us do our job right over the next one, two, three years, both to get a lot of the feature functionality we need in those products as well as the integration. So it really depends on how customers make decisions. If they make decisions with somebody tying it all together for them, then the systems integration players have an advantage. We clearly are aligning with Ericsson. Alcatel has their strengths. If they make them on an architectural play, it really looks good for us in terms of positioning.