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Optical/IP

The Chambers Partner Plan

ATLANTA -- CTIA Show -- Cisco Systems Inc.'s (Nasdaq: CSCO) CEO John Chambers delivered a grandiose take on the future of networking as his keynote at the annual Cellular Telecommunications & Internet Association (CTIA) wireless show -- one that was long on vision and short on specifics.

But the Cisco fromage royale did indicate that the company's increasing involvement in the multifarious world of mobile networking will require a deeper emphasis on partnerships from his traditionally M&A-happy firm.

According to Chambers, the anytime/anywhere networking future that we are all moving towards will feature a healthy dose of "IP mobility," which is Cisco-speak for voice, video, or data traffic that can be sent across a variety of different network types.

"History repeats itself... Wireless is at the same stage the wired network was 15 years ago," Chambers told the crowd. But the industry has to look beyond mere wireless connectivity and towards applications that exploit mobility and the integration of wired and wireless in order to drive productivity benefits, he noted.

To achieve this, he said, partnership has to be the order of the day: "I believe partnering will determine our future -- it is every bit as crucial as acquisitions or growing internally."

But Chambers also sounded a note of caution about taking the partner path: "Partnerships are harder than acquisitions, and in our industry 80 to 90 percent of acquisitions fail."

Of course, that's not to say that Cisco will abandon acquisitions. Just today it announced it will buy Riverhead Networks Inc., a security technology vendor, for about $39 million in cash.

Chambers gave no indication how Cisco's partnering strategy will trickle down into specific wireless sectors but his words could be particularly interesting to startups toiling away in the enterprise wireless LAN market.

Cisco dominates the market for standalone wireless access points, but there have been plenty of questions recently about how the company is addressing the introduction of centralized management systems for 802.11 networks (a.k.a. WLAN switches, gateways, or appliances).

The company already has partnerships with startups like Funk Software Inc. and Roving Planet Inc. and works with Bluesocket Inc. [ed. note: a little bird says that a more formal agreement could be in the offing] and others.

Cisco also has its own internal plans for centralization (see Cisco's SWAN Song). But Chambers's partner patter could throw a new light on how Cisco may bring more sophisicated management and security technology to bear on this aspect of its wireless world (see Cisco’s LAN Switch: Build or Buy? and SWAN Bucks Up Ducklings).

— Dan Jones, Site Editor, Unstrung

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