Cisco's Chambers: Improving Economy To Spur Sales In IP Telephony, Storage

"With the average PBX being nine years old, most enterprises will be forced to change over their systems in the next year, and many of them will choose to go with IP," Chambers said Wednesday in a keynote address at the company's annual analyst conference in Santa Clara, Calif. "IP telephony is one of those applications that is probably in many accounts, architecturally, has already been decided, and we're ready to meet that need."

To do this, Chambers noted that industry experts and channel partners can expect to see Cisco partnering with larger companies to drive new products and managed services in this area. He added that as Cisco business customers make sense of their budgets and technological needs, two key questions for the future will be how quickly they will move their voice and data onto one network, and which products and services they will use to manage the networks they adopt.

In the meantime, Chambers predicted that another area in which customers will likely be spending is storage, and said that Cisco plans to meet these needs with a variety of new solutions. Though Cisco entered the storage sector only earlier this year, the San Jose, Calif.-based network equipment company believes the business line could be a billion-dollar revenue category within five years.

Already, this quarter's storage revenue has surpassed last quarter's, which Chambers labeled as "disappointing." Still, Chambers admitted that developing technology in this segment could be "bumpy," given the presence of established competitors in the marketplace.

"When we move into a new marketplace, we try to be realistic," he explained. "Storage is an important [market], but my feeling is that if we hit half of the six advanced technologies, we'll be in good shape."

Wednesday's speeches at the Santa Clara Convention Center weren't all about the future. Following the Chambers keynote, Mike Volpi, senior vice president and general manager of Cisco's routing technology group, focused on the present by announcing a spate of new offerings in the company's traditionally strong router space.

In particular, Volpi announced upgrades to Cisco's 7600 and 12000 series core and edge routing products. The enhancements are aimed at helping large service providers streamline their IP networks and deliver new Internet Protocol services.

"Our customers have changed their priorities to creating revenue and increasing efficiencies," Volpi said. "The key is to create a seamless network system with a high level of intelligence so nobody worries how they get to where they're going."

These new products, which will compete most directly with offerings from Juniper Networks, will be available next month.