Cisco sees the cutting-edge in Eastern Europe

VoIP, IP TV and remote access to CRM apps expected to be a booming market.

Cisco expects emerging markets like Eastern Europe to be among the fastest adopters of its application-oriented networking software, which tunes the performance of networks to handle specific services such as VoIP, IP TV and remote access to CRM applications.

Because many countries in the region are small and have relatively few legacy systems, enterprises and service providers there can “leapfrog” older technologies that are prevalent in Western Europe and the United States, according to Kaan Terzioglu, Cisco vice president for Central & Eastern Europe.

The products also allow operators to look more deeply inside network packets, however, making it easier to charge users extra for some services, instead of the flat fees many use today.

Terzioglu spoke to IDG News Service about these and other issues at a recent Cisco seminar in Riga, Latvia.

IDGNS: Countries in Central and East Europe have relatively little in the way of legacy IT systems, does this give them advantages in selecting the newest technologies?

Terzioglu: There are two advantages. You can jump over a technology and make investments in a way that is cheaper. We see that happening. Also there is the advantage of size. A place like Latvia is small enough to get things done in a timely and controlled way. We see solutions coming into Latvia, Lithuania, Estonia, Croatia, Bulgaria faster than in Western Europe and even the United States.

IDGNS: Does that mean we'll see some showcase implementations of your new, application-oriented networking products?

Terzioglu: Yes, that's why we're investing heavily in these markets ... because of the ability to leapfrog and execute much faster. ... We see that service providers not only provide an IP-based VPN to their customers, but provide banking customers with SWIFT as a service, and other money transfer services. That's what we expect the impact of the services-oriented platform to be.

IDGNS: But aren’t message-aware networks -- the kind that recognize, route and handle a purchase order -- also a security threat? They contain software that knows what a message is about.

Terzioglu: Any technology can be used for good or bad. The fact that we have that capability does not mean it will be used for bad purposes. But even if we didn’t have that capability, we can’t prevent others from developing it. We have a need for security at the message and transaction level. The objective of application-oriented networking is not only to understand the message, but also to understand the message and to encrypt the message so that it is not meddled with.

IDGNS: So you are saying the network is secure, no one can get in and see what the customer’s application is “seeing”?

Terzioglu: Exactly. And until today, we were forced to have point-to-point integration because of this exposure, which was a costly model. With this application-oriented networking, we are not only bringing virtualization of the middleware, we are also ensuring security of the transactions. This is the key feature of that technology.

IDGNS: One of the features of your new networking products is usage awareness, so an ISP could charge for heavy Skype use on top of its flat connection fee. This may be good for operators, but is it good for users? It also raises privacy issues.

Terzioglu: In real terms, there is no alternative to having a usage-based service model. The application oriented network with the ability to see what is inside the packet -- deep-packet inspection -- also gives the ability to see who is using the network for what. I believe the value of convenience in some applications will overcome the value of privacy, but it's a fine balance.

IDGNS: When we have all these features and services, won’t we see end-users paying more at the end of the day?

Terzioglu: Yes, but you are already paying more. You pay for the mobile phone, the fixed phone, sometimes business connectivity, DVDs and CDs now and again. In some countries you already pay €100 [US$127] per month or more for these things.

IDGNS: But isn’t there a threat of higher costs with no tangible benefit as these new capabilities for service providers come on line?

Terzioglu: You already pay for cable, wireline phones, the Internet. In the future you will have your voice for less, together with many other services, but someone has to do that service aggregation. And there is enough competitive dynamics in the market to not be afraid of charges going up.

Copyright © 2006 IDG Communications, Inc.

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