Howard Charney on Cisco, Growth, and Cloud Computing

Howard CharneyWe had an opportunity to ask Howard Charney, from the Office of the President at Cisco, a few questions before he speaks at the upcoming Innotech Austin conference.

In an August 11 article in the Wall Street Journal, John Chambers, your company’s chief executive officer, said your company was going to add 2,000 more jobs. In these uncertain economic times, how has Cisco been able to expand its business operations?

Well, first off, Cisco has a focus on operational excellence and productivity. We entered the downturn in a very strong position and that has given us the opportunity to strengthen our position in our core and adjacent markets. But we’re also fortunate that Cisco’s products and services are fundamental to business operations and consumer
online activities worldwide.

With a bigger focus on platforms in the “Cloud” by companies like yours, what are your expectations for this in the next year to 18 months?

The “Cloud” is an example of how quickly this industry evolves. Five years ago, almost no one was talking about cloud – but today it is increasingly strategic for a broad range of industries, for academia, for governments. The “Cloud” is a fairly disruptive model and it will take people time to understand how best to adapt to it and benefit from it. Some of that will be inertia: I have my data siloed on my own servers, thank you very much, and I don’t want to risk changing that. But the benefits are likely to become impossible to ignore, at least for organizations that want to remain competitive. Cloud services will expand exponentially as the industry develops cloud standards and infrastructure, and we all grasp the interplay between private and public clouds, and the perceived barriers – such as pricing models, and concerns about reliability and security – are addressed effectively.

Through the years, CISCO has grown because of its ability to partner with other companies, including your former company, Grand Junction. As you continue your growth, what types of partnerships are you looking for with other companies?

I should make the distinction between partnerships and acquisitions. Cisco has many great partners and distributors and resellers and they are fundamental to our business model. But we also acquire companies with technology that’s strategic to our business. That’s how I joined the company – when Cisco acquired Grand Junction Networks back in 1995. Grand Junction developed fast Ethernet and low-cost switching, and after Cisco bought my company in 1995 I helped build that segment, within Cisco, into a more than $2.4 billion business. Linksys and Scientific Atlanta and Flip and now Tandberg are other examples of strategic businesses that Cisco identified and successfully integrated into its portfolio. Going forward, we’ll continue to go to market with our many partners. We’ll look for innovative companies and technologies that expand our presence in our core and adjacent markets. And we’ll continue to develop technology in-house, too, by the way. We spend more than $5 billion every year on our own R&D (research and development).

Is there anything else you wish to add about your talk at Innotech?

I tend to be an optimist – and I see a really bright future ahead, not just for Cisco or Texas or the United States but for communities and countries around the world. We are entering a phase of the information revolution where the capabilities we’ve all been talking about for the past 30 years are suddenly really viable. Thanks to broadband… thanks to virtualization and the cloud… thanks to the new undersea cable that recently went into service in Africa… thanks to tiny, smart, wireless devices… a whole new spectrum of possibilities is opening up in energy, and education, and healthcare, and other areas. And I believe that that’s going to improve the quality of people’s lives in ways we are only just beginning to understand.

About Bryan Menell

Bryan is the Managing Editor for AustinStartup and the CEO of Mahana. He is a co-founder of Capital Factory, an investor and advisor, and runs the popular Austin Tech Happy Hour with his wife.

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