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Chambers defends Cisco's wide reach

Chambers defends Cisco's wide reach

Cisco's President and CEO discusses the company's business plan

What's your take on how significant a competitor Juniper is in the enterprise?

We do not set our strategy around what our competitors do. We try to get the market transitions right and we listen to what the customers like. And then we listen to what the customers like about our competitors or not. But we try to get the market transitions right. So within the enterprise, if we're right on data/voice/video convergence, the role security will play in that, switching combining with routing and the other elements, then for companies who come at us with a product or two it will be very challenging. Many of the companies waited too long. A lot was written two years ago about how effective some companies would be in the enterprise marketplace. [Juniper] announced their access router way ahead of us. We have had tremendous success in the access routing segment where they have not. It's hard to move into new markets

In each of our product areas, there's a different No. 1, 2 or 3 potential competitor. We made a decision five years ago plus that we felt that the [network markets] would blur. None of our peers followed that. If we're right on that, it's going to be really difficult for them to meet us.

So would it be fair to say you consider Juniper a point product competitor but not a strategic competitor?

It would be fair to say that most of the players in the industry are primarily point product competitors, and their ability to move beyond one or two products has not occurred. We'll see how that goes moving forward. Alcatel has taken an interesting approach in that they're going to be the systems integrators. We'll see how the market plays out. But it's hard to become a leader in more than one product area.

A fair amount of your marketing right now is targeted to business executives. Isn't this a critical time, with all of the initiatives under way, to be talking more to the IT person than to the business person who probably doesn't understand these concepts?

No. Because a lot of CIOs, directly or indirectly, ask you to help them understand what this can mean to the business and why Cisco brings a unique [perspective]. So if you believe that business strategy would, at a minimum, be enabled by networked IT - and I am now beginning to believe that networked IT may actually change business strategy - you've got to educate the business user on what is capable and get them to understand that when you think about a Cisco IP phone, you aren't just thinking about replacement of your prior phone. You're thinking about integrated data, voice and video. You're thinking also about total cost of ownership. You're talking about flexibility in communications, about how you communicate among yourselves, with your peers. You're thinking architecture. So you want them to think of us in that way, whether it's the CFO who has to approve us for a 20 percent price premium vs. XYZ company or the business leader who has to choose between adding 200 sales reps or another physical branch to spending money on the network. Same thing with the data center. We're sending messages both to the CIO but also, with our usual humor, to the CEO that Cisco's very uniquely positioned to provide security. It's the balance of the two messages.

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