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Growing into Market Adjacencies

December 9, 2008 - 0 Comments

I am at our C-scape Industry analyst conference today. The in-person event is at the Fairmont in San Jose, while this year we are also bringing it over the network to those who could not travel for the event. The role of an industry analyst is critical during this period of economic turbulence. Cisco uses times like this to invest into adjacent markets, looking for markets that may have been stagnant on technology innovation and where the innovations we can bring enable customer value with the key value propositions today being extending the lifecycle of capital assets the customer already has, deferring significant new capital aset outlays for a period of years, and thus reducing and deferring incremental operational expenses. A good example of this is with our Unified Fabric. Our IT groups implementation has showed a 30% increase in server workload capacity in a flat power budget. If you assume 12-15% CAGR on server workloads this is about a 24 month life cycle extension. On a sizable multi-megawatt data cneter the savings in CAPEX avoidance and deferral as well as OPEX reduction is measured in the tens of millions of dollars. Not a bad return.So as to why I like industry analysts- when Cisco entered the Unified Communications market the technology world was in a turmoil, the IT departments were not sure where to spend or what to spend on, and an insightful group of analysts and consultants saw the potential for savings with IP telephony. That period of growth, during a downturn, while our competition was defocused, was critical to our success in that market. History does sometimes repeat itself, and this week we will be discussing our next set of strategies to embrace new adjacencies, build customer value through innovation in product, software,and services, and drive customer and shareholder value through sustainable growth in new markets.dg

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