For Cisco, a Canadian's global aspirations

Giant computer-network equipment maker Cisco Systems Inc. CSCO-Q recently hit a rough patch, as its huge and lucrative U.S. government business declined, its stock price slumped, and its foray into consumer products suffered a setback. However the company is promising to get back on stride, taking advantage of new opportunities in fast-growing developing countries just as India and China.

Result of the expansion of U.S.

As a result of the expansion of U.S. debt, federal, state and local spending is all pursuant to this agreement pressure right now. Cisco spent years building our position in the public sector, [and] that business was booming a couple of quarters ago. Last quarter it was down 15 per cent. That’s a very major reversal that offsets the other positive things that are happening in some of our [other] markets.

We took a risk on the Flip, and its connections to the network technologies we were delivering. The challenge, we found out, was managing distribution – the retail presence. It is a place where Cisco doesn’t have the influence in terms of shelf space or consumer advertising.

[It was a] lesson learned for the company, however we do all in all think that connections in the home – for smart energy controllers, for a [system] where your phone runs over WiFi instead of over the wireless network – are in spite of everything very interesting consumer issues. Henceforth I think you will se us working more with the telecommunications industry to link our technologies to their broadband connections to the home. The logical [consumer] distribution and branding power resides with some of our telecommunications partners.

The interesting thing about India is that innovation is consumed in very different ways than it is here [in North America]. The price points are different, and in some areas cost structures are very low. We are working, for instance, on the virtual delivery of doctor’s visits, using some of our video innovation, at a price that we would not believe for health care in the West. I have no doubt some of those innovations will at that time come back into the more developed markets in Europe and North America, as will the innovative delivery models.

Underlying plan of mass urbanization

China is very different because there is an underlying plan of mass urbanization. You see entire cities of 10 or 20 million people being constructed in years. It makes your head spin. There is a massive amount of possibility to build new urban infrastructure in ways we hadn’t thought possible. We have seen networking innovation deployed to underpin the delivery of educational services, health-care services, and transportation services.

They embrace the construct that everything should be connected, and that all of those connections will lead to more sustainable, environmentally capable urban living. [There are] very large opportunities at a scale few other places in the world experience. Clearly Cisco intends to participate in [delivering] those networks.

And now we to tell the truth have Chinese [telecommunication equipment] competitors that are looking at expanding around the world. So we believe that henceforth we’ll see some our strongest competition coming from Chinese companies.

Nortel, I think, didn’t understand the importance of adjusting to a market transition. The market was moving to IP [Internet Protocol] and I think the company just had too much embedded in the way its innovation was successful, and they missed the transition. Newbridge was a different scenario. [They had] an issue of scale and global capabilities. Selling the company to [French telecom giant] Alcatel was a way to answer that dilemma.

Market transition

Once you miss a market transition, it gets very difficult. Markets are very unforgiving. You have to anticipate those transitions, and you have to act on them three to five years ahead of them coming to the marketplace. We anticipated the transitions that are occurring right now in cloud computing, five years ago. We have technologies that seem purpose-built for cloud computing, both for private clouds as then as for large public clouds.

Video has transformed the consumer experience, it has in effect changed social networking and social tools, and it is changing what we expect to see on our mobile devices. It will change the experience of entertainment on any number of pieces of glass from a television to a tablet to a mobile phone. Video was the killer application that in fact [prompted] user-created content, and it is the application in other words creating new mobile experiences and mobile applications. It will as well transform how collaboration is done in business.

How we work in Canada

If you look at how we work in Canada, we usually have to [deal with] big markets and individual smaller markets. We respect the vast differences in a large and complex geography which is in a class by itself to Canada. There’s an ability to create some form of consensus of opinions, and that as a rule works very then in an international business.

Canadians are as well very open to the way in which European businesses think, and we are as a rule well received in Asian culture. Canadians are often perceived as good collaborators, and if you look at the basic requirement today for global business, collaboration underlies everything. The perspectives that we grow up with here, that we experience in university here, that we see from our political systems here, usually serve global businesses then.