Cisco Systems CEO John Chambers Tuesday expressed a strong willingness to partner with major players such as Microsoft and IBM as network technologies and software applications merge.
Speaking to reporters at the Cisco Networkers event in Las Vegas, Chambers reiterated his company's three-pronged growth philosophy: internal development of products, acquisitions and partnerships. He also said Cisco plans to aggressively enter a new emerging-technology market every three months. He cited Cisco's new Application-Oriented Networking, which the company unveiled yesterday, as one example of a new technology.
As for partnering with Microsoft, Chambers said, "Customers want to work with Microsoft, so we will. It's in our best interest to work together. We are both used to leading, yes, but that won't prevent us from dancing.
"Our philosophy has always been that it's better to partner than collide. ...It is in our best interest to partner with the Microsofts and the IBMs of the world. ...Each of us will come at it from our area of expertise," he said. "I do firmly believe that the network is evolving into intelligence throughout the platform."
Cisco Chief Technology Officer Charles Giancarlo elaborated on how Cisco might fit in alongside Microsoft, saying there are certain things a software company cannot do that Cisco can.
"Certainly, Microsoft is going to be a very big force in terms of application collaboration, and we are working with them in that area," Giancarlo told reporters. "But we think that in terms of real-time voice and video collaboration [technologies] and having a pleasant experience with voice and video...that takes a systems company and not just a software company."
When asked whether Cisco is asserting it is better than Microsoft in some ways, he said, "Microsoft is going to have its role in application collaboration."
Chambers said Cisco will attempt to launch new technologies every three months, including some that it has researched for two or more years. Cisco's entry into wireless, storage and other areas arose from similar initiatives in the past, Chambers said, adding that Cisco has been more successful in doing so than other companies. Part of the reason for that success has been the company's willingness to buy two or three small companies to round out what Cisco is already doing in an emerging area.
So far in the past year, Cisco has purchased 14 companies -- a number that will continue to rise, he said.
Chambers said Cisco hopes to drive up revenue from emerging technologies to US$1 billion a year, but he stressed that the focus on emerging technologies does not mean its mainstay switching and routing products will get less attention from the company or customers.
Many analysts have argued that switching and routing products are becoming commodities. That means Cisco must differentiate them in the market with add-on products such as AON, which provides add-on blades to both Catalyst 6500 switches and four of Cisco's branch routers. AON will also ship as a stand-alone appliance that customers can run separately from Cisco devices or use with networking gear from other vendors.
Chambers said Cisco will tally whether AON has hit that hoped-for US$1 billion revenue mark in the second half of next year. "Clearly, we think the potential is there," he said.
He went on to say that he believes the routing and switching markets will remain important for a long time. "I do not believe commoditization will evolve rapidly in routing and switching," he said. "The gross market for routing and switching is very strong."