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Optical/IP

Cisco's Kool-Aid

9:00 AM -- Enough joking around. How about some actual insights from the Cisco Systems Inc. (Nasdaq: CSCO) C-Scape press/analyst event?

Much of the talk in yesterday's sessions echoed what Cisco has said all year; that's part of the point. But the event was orchestrated to make some themes particularly stand out.

  • Cisco drinks the Kool-Aid. Even more than usual, CEO John Chambers rattled on about Cisco's own use of collaboration techniques and TelePresence (and "usual" has meant "a lot"). That became a recurring theme for other executives' talks.

    The point was driven home by a literal Kool-Aid tasting at the end of a multistaged demo, where an imaginary industrial firm used various Web 2.0 tricks to perfect a water filter. In the end, they poured some "filtered" water and added Cisco WebEx "Cool-Aid" powder.

  • They're not talking about routers. Day One had to do with collaboration, video, and the newly unified software organization created in Cisco's high-level reorg last week.

    Tony Bates, co-head of the service provider group, mentioned the CRS-1 here and there at a luncheon with the press. But mostly, he was on hand to talk about Scientific Atlanta , which is also under his purview, and how it gives Cisco a heritage in video delivery.

    More than once, executives mentioned that all this video and Web 2.0 would pump more bandwidth through the network, creating demand for routers. But that's not what they really wanted to talk about. Chambers has known for a long time that Cisco's long-term future lies beyond routers, and he seems to think he's found the secret formula to get there.

  • The Network is driving, so buckle in and shut up. Not surprisingly, Cisco thinks the network should be the home base for all the transformations going on: like applications becoming collaborative, or the data-voice-video combination giving way to the more general category of entertainment.

    Executives had a shared mantra for why the network should do the heavy lifting: because one of these transformations is the delivery of data to arbitrary devices, and it's the network that would do the talking to all those devices. Therefore, the changes are best placed in the network.

    None of these messages is particularly new for Cisco. But it's telling that collaboration and video got nearly all the focus during the event where Cisco, in a sense, declared its long-term strategy.

    One risk is that Cisco ends up overshooting. Consider e-commerce. The theory ended up having merit, but brick-and-mortar stores didn't die off the way e-commerce fanatics predicted. In fact, "real" stores ended up embracing e-commerce while Pets.com got buried in the backyard. Cisco wants to be the Amazon.com of this collaboration era, but if the market swerves the wrong way, it could be sock-puppet city -- and a humble return to being "just" a router company.

    — Craig Matsumoto, West Coast Editor, Light Reading

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