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Cisco spends 4.5 B$ annually on R&D. We also do acquisitions. The perception in the media is often that Cisco”buys its way into innovation”. While it is true that acquisitions are a key part of our overall strategy (124 acquisitions to-date, about one every three weeks), there’s more to Cisco’s innovation than the Borg model (“œresistance is futile-you will be assimilated”) (for you non-Trekkies, see: Wikipedia:Borg). Many of Cisco’s most successful products and technologies have come from internal development: the CRS-1 (90 Terabit router), the Integrated Services Router, MPLS (the technology at the heart of all next-generation IP wide-area networks). About two-thirds of all products sold by Cisco were produced through internal development.Cisco divides its products into three families: Foundation Technologies (FT) (routing & switching), Advanced Technologies (AT) (Wireless, Optical, Security, Unified Communications, etc.), and Emerging Technologies (ET) (TelePresence, Digital Media & Signage, Physical Security, and IP Interoperability Communications Systems).Each of these groups works continuously at making its products”faster, cheaper, better.” The three categories represent a product-maturity continuum: new markets are incubated as ETs, as they grow they become ATs, and as they mature they transition into FTs.Cisco’s Emerging Technology group is responsible for incubating new businesses. Headed by Marthin de Beer, we are growing one new Emerging Technology business unit every three months. We have four that are selling products right now (see the list above) and we have five others that are still building their offerings. For a description of our team’s process, read about it in the Harvard Business Review.Where do we get ideas for new businesses? We are big fans of the”Wisdom of Crowds” and we have an open Wiki (that we call Idea Zone or I-Zone for short) inside Cisco that lets anyone contribute new business ideas. This is working well for us (hundreds of ideas have been narrowed down to 16 potential business opportunities-in the past few months). I-Zone has been working so well that we decided to create a version that would be open to anyone outside Cisco and we decided to organize a contest (i.e. Cisco I-Prize) to invite people to participate.In short, Innovation is alive and well at Cisco. We try to get ideas any way we can and use those ideas to improve existing products as well as start new businesses. See you soon at the Cisco I-Prize site.

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