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Cisco Moves Into IT And Communications Market

December 9, 2009

Cisco, the computer switching colossus, announced it is changing from the Internet’s “plumber” to a platform and provider of products for online work and leisure, AFP reported.

The company’s Chief Executive John Chambers said in a presentation to financial analysts at Cisco’s headquarters in San Jose, California, that there is a window of opportunity where the network will become the key enabler of IT and of communications.

“That is where we can become the Number One IT and communications company,” he said.

Cisco is known for specializing in the Internet’s “plumbing,” or routers and switches for computing networks.

However, it is now transforming to capitalize on trends such as online video and software offered as services “in the cloud.”

“We were in the right spot at the right time. The network is the platform for the IT of the future,” Chambers said.

The company has made several acquisitions in 2009, most recently the $44.5 million takeover of Hong Kong-based DVN Holdings Ltd, a leading maker of boxes for delivering digital television broadcasts.

Cisco also acquired the Web security company ScanSafe, based in San Francisco and London, for around $183 million and wireless equipment maker Starent Networks for $2.9 billion.

The company also bought Pure Digital Technologies in March, which makes the hot-selling Flip Video camcorder, and it purchased Tidal Software Inc. in April.

Last week, Cisco announced it would go ahead with its $3.4-billion-dollar takeover of Norwegian video conferencing company Tandberg.

Chambers told analysts the company’s focus was purely on market transitions as it moves into new markets acquiring and then keeping the talent.

But as Cisco shifts from being a plumber into rival in markets such as tele-presence and smart energy grids, Chambers said he expects some partners such as technology titans IBM and Hewlett-Packard to become competitors.

“If you haven’t got good competitors you are not in good markets with growth. We don’t react to what competitors do. We read the market. To move into new markets you have to acquire, keep the people and bring out next-generation products,” Chambers said.

He added that in the coming year, video and collaboration such as taking social-networks into businesses would be a major move that the company plans to make.

“Collaboration platforms have to be CEO idiot proof. It has got to be easy to come together,” Chambers said.

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