"Cisco has made a lot of mistakes by not being driven enough by our carrier customers," Chambers told the crowd. "I apologize for that and it will not happen again."
Chambers' mea culpa came near the end of a speech in which Chambers encouraged service providers to use and sell network services, such as distance learning, in order to make both them and their customers more productive -- and to generate more cash. [Note: Actually, he said, "CAY-ush," which sounded even more fun to accumulate.] Citing Cisco as the case study here, Chambers says the company saved $1.7 billion a year over the past seven years, thanks to network applications such as outsourced manufacturing that is closely monitored over the Web.
But Chambers says that the methods of doing business, as well as the applications that are used, must change. You can't just automate the old way of doing things, he says. Using distance learning as an example, Chambers related that, instead of hour-long classes, the sessions only lasted 10 to 15 minutes. And where testing after instruction is the norm in a structured classroom, distance learners prefer to take tests first to see what they need to know.
"We're all going to love it," Chambers says. "[Distance learning] is a bandwidth hog."
Chambers made one thing clear: Service providers have to do more than just provide transport, or voice and data connections, to survive long term. Chambers called transport the "ante" to a much bigger game and suggested that in offering more networked services, carriers should seek the help of partner companies. He also said they should control the whole process via the Web.
But in suggesting such radical changes for service providers, Chambers is selling against two things. First: It takes time for older companies to learn new tricks, and for the period of time it takes to develop new services, money is lost, not saved.
Second: Service providers are fearful of change and might be quick to point out that all the information technology spending between the 1970s and the 1990s resulted in very slim productivity gains, so maybe investing in more networking technology isn't the answer. Chambers addressed the concern, saying that it wasn't until the advent of Web-based applications that productivity really started improving.
Cisco's focus on service providers and the suggestion that they evolve beyond just connecting folks to networks is not surprising. Cisco is in the midst of reorganizing its carrier offerings. After a sharp decline in its optical networking business and at least one busted acquisition, Cisco recently hired Ron Martin from Fujitsu Network Communications Inc. (FNC) to help its credibility with big carriers (see Fujitsu's Martin Joins Cisco). Also, with carriers reselling services like distance-learning applications, Cisco is pushing both ends of the connection -- the telecom gear that carriers install and the access gear that enterprise businesses need to use such services at businesses and homes.
Other keynote highlights:
— Phil Harvey, Senior Editor, Light Reading