Cisco: The future is bright for video

Video networking was a major theme on the first day of the Cisco Systems C-Scape Conference, as company executives outlined their strategy and vision for the future of networking.

Cisco has designs to be a significant player in the video on demand as well as IP TV transmission markets, and it intends to revive the moribund video conferencing market with its recently launched Cisco Telepresence next-generation video conferencing technology.

"Telepresence is my favourite new technology. It will save me $140 million off our run rate on travel next year," said CEO John Chambers in his talk at the conference on Dec. 12.

Chambers is so bullish on its promise that Cisco will roll out the technology to 120 sites in 2007. "It will change way we collaborate and allow us to communicate as effectively [as being in the same room] or more when people are not changing time zones," he said.

Chief development officer and president of the Linksys unit Charlie Giancarlo in his talk echoed Chambers optimistic remarks on video networking.

"We may get to be known as a video company," he said.

Giancarlo said that Cisco intends to broaden the Telepresence offering beyond the two different systems Cisco is shipping this month.

"We'll come out with bigger systems for vertical industries and a lot more capabilities that add to the overall experience. I think this could be our fastest growth technology since switching," he said.

But how much of its unified video vision relies on intellectual property and talent acquired with Scientific Atlanta earlier this year is still an open question. And it's not yet clear what synergies Cisco expects to exploit as a result of that acquisition.

Also, that vision cuts across Cisco's enterprise, consumer, commercial and service provider business. But it begs for an expansion of Cisco's consumer strategy, which Chambers said should come in 2007.

It's likely that much of the new video business Cisco expects to generate will come out of its service provider business unit, thanks to the demand for personalisation generated by such Internet video as YouTube.

"We're seeing a massive paradigm shift in the experience the consumer gets," said Mike Volpi, general manager of Cisco's routing and service provider unit. "There will be a great deal of diversity in the content and in the access devices."

Despite the rosy future scenarios outlined in the talks, Chambers is aware that much of that success will depend on execution, and that it won't happen overnight.

"We have to be realistic. Digital video was up a hair last quarter," he said.

Other themes that surfaced at the conference include Cisco's new overall mantra to describe its designs for the future.

The network is the platform is the latest mantra replacing the former intelligent information network. That suggests a potential clash between Cisco and Microsoft, as the vendors vie to move more of the middleware glue to their side of the computer/communications equation.

And Cisco has shifted its approach to innovation, which in the past has relied heavily on its successful acquisition formula. Now, as in the case with the development of its Telepresence system, Cisco is looking to focus on specific opportunities with emerging technologies by creating internal startups.

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