Cisco's Emerging Collaboration Strategy

More than just a way to eliminate some face to face meetings, collaboration technology ranging from wikis to pricey telepresence systems will reignite productivity, says John Chambers.


By Richard Martin, InformationWeek
Jan. 28, 2008

If you want to catch a glimpse of the future of knowledge work in the 21st century, a good place to start is a small family homestead outside Germantown, Ill., 40 miles east of St. Louis. That's where Craig Huegens, director of architecture for networks, data centers, and unified communication services at Cisco Systems, lives and works.

When Huegens moved there from Northern California in December 2000, it was for the most basic of reasons: He wanted his newborn son to grow up around family, who now live just five miles down the road. Nevertheless, it was something of a revolutionary concept: Huegens was Cisco's first full-time IT telecommuter.

Back then, he got by using e-mail and Internet Relay Chat, a primordial form of instant messaging. It took some accommodation on the part of both Huegens and his colleagues back in San Jose, but they made it work. And over the last seven years Huegens has become the spear point for the philosophy and technology at the center of Cisco's biggest strategic shift since the tech bubble burst in 2001 -- "Cisco 3.0," as CEO and chairman John Chambers likes to call it.

Cisco 1.0 was all about getting people connected by selling truckloads of routers and switches, and it made the company, founded in 1984 by a small group of computer scientists out of Stanford University, one of the fastest-growing in American business history. Cisco 2.0, Chambers says, was cen- tered on business process change--using all that hardware and, of course, a few truckloads of new gear like IP telephones--to drive innovation and productivity gains.

Cisco 3.0 employs even more hardware and software to transform business models, and Chambers, with characteristic evangelical fervor, says it will fundamentally change the nature of work, enabling productivity growth to soar back into the realms last seen in the economic surge of the late 1990s. "We believe that productivity can grow not at 1% or 2%, but 3% to 5% for the sustainable future," says Chambers in an interview in his office in Cisco's San Jose headquarters.

That's an audacious vision, and it will be driven, Chambers maintains, by the type of collaborative, Web 2.0 technology that now keeps Huegens in touch with his team in San Jose: interactive Web forums like wikis and blogs; IM; interactive "teamspaces" mounted on WebEx, which Cisco acquired in March for $3.2 billion; and, above all, videoconferencing and its big brother, telepresence--a life-size, high-def, multiple-screen system for face-to-face meetings among users in multiple locations.

Videoconferencing, of course, has been touted more than a few times over the past decade as the means to transform boring meetings, slash travel budgets, and create a new multibillion-dollar industry. It never quite happened. The question is, is Cisco's latest initiative just Videoconferencing 2.0, or is it really something revolutionary?

WALKING THE WALK
The new emphasis on intensely collaborative technologies at Cisco, a company that epitomizes the catchphrase "eating our own dog food," ups the ante for CIO Rebecca Jacoby, who assumed that post just over a year ago and has been the point person for rolling out telepresence and other new-age tools to the demanding in-house customers at Cisco.

Jacoby, who's been at Cisco for 13 years but is a self-described nontechie (she came up through the manufacturing ranks), takes over at an interesting time. Not only is she Cisco's first female CIO, succeeding the semilegendary Brad Boston, now senior VP of the Global Government Solutions Group, she is also helping to lead Cisco through a transformation as radical as any in the company's 24-year history. To do so, Jacoby says, Cisco is making itself the test bed for the next generation of collaboration tools.

When Chambers first talked to Jacoby about taking on the CIO job, she wasn't sure she really wanted the spotlight that goes with being the chief IT exec for one of the world's most powerful and venerated IT companies. The prospect of transforming the entire company, however, "was irresistible to me," she says.

Jacoby realized that the conventional role of IT--acquiring and deploying new technologies and educating employees on using them--was now, at least in part, flipped. "When you talk about the collaboration tools out there, they're not necessarily initiated by IT," she says. "They're coming from the consumer space, and we're just creating a road map. That's the first thing we do, as opposed to being either an inhibitor or a controller."

Much of what Jacoby talks about is hardly earth-shattering--she has become an enthusiastic user of video blogs, or vlogs, she says--but its pervasive use at a company of Cisco's size, and age, is probably unusual. With a globalized workforce of highly connected, tech-savvy users, the adoption and learning flow both ways, to and from Cisco's IT group. Jacoby calls it "creating an environment of directed participation," in which the tools already being used by Cisco employees are adapted, refined, and sharpened to drive innovation and growth. "Our biggest challenge," she says, "is just keeping up with where these ideas are going and seeing how we can participate in how they are shaped and focused."

Among the initiatives Jacoby and her team have undertaken: creating an online "communications center of excellence," where new collaboration tools from wikis to vlogs to telepresence can be deployed, tested, and refined. Video, she says, is "phenomenally effective," particularly in communicating with employees outside the United States.

Equally powerful has been Cisco's I-Zone wiki, a company-wide forum for new business ideas launched not by IT but by the Emerging Technologies Group, headed by Marthin DeBeer. Live for 18 months, the wiki has produced 600 ideas for potential $1 billion-per-annum-size ventures (the minimum level for Cisco to get behind a new business), suggested by the company's 61,000-plus employees. "They're not all good, but even the bad ones may spur a good idea," DeBeer says. According to Cisco, 10,000 employees have participated on the wiki.

Reflecting Chambers' mantra that to lead the next phase of the Internet Cisco must constantly reinvent its own processes, the focus on collaboration has also spurred a reorg of the company's hierarchy. Beginning in the painful 2001 meltdown, when Cisco posted a net loss of $1 billion, Chambers led a shift from the usual product, sales and marketing, and other functional groups toward a more horizontal, less command-and-control structure of "councils," "boards," and "task forces."

"The councils focus on $10 billion-plus opportunities, the boards on $1 billion opportunities, and the task forces are the implementation of any of the above," Chambers says. It sounds like a somewhat communistic way of reshaping a $35 billion-a-year company, but for Chambers this new structure is key to the company's regeneration. "The first few years were pretty painful," Chambers admits. "It's like anything you do--usually it's not the technology that's your limiting factor, it's people, and getting them to change from, instead of command and control, to collaboration." Cisco, however, makes its living leading technology changes, and the key to Cisco 3.0 will be the most sophisticated and expensive: telepresence.

INNOVATION BY DESIGN
DeBeer's executive assistant, Margaret Hooshmand, can be found almost every day outside his office in San Jose. Only she's not there. She's at the Cisco office in Richardson, Texas, and she bilocates via telepresence to the cubicle adjoining DeBeer's office. You can walk by (in San Jose) and chat with her any time, and if you don't remind yourself, you'll forget to ask her how the weather is in central Texas.

Telepresence was the first new product to emerge from DeBeer's Emerging Technologies Group, and it ramped up in record time, from the hiring of the first engineer in February 2005 to the shipping of the first external system in December 2006. Among the design principles, or "Telepresence Rules," DeBeer's team devised were, "People will always appear life-size" and "To initiate a meeting you have to do just one thing," for example, press a button on the handset.

Hooshmand's in two places at once

Today, in Building 10 on Cisco's campus, where Chambers, DeBeer, and other execs have their offices, the second floor is like a telepresence never-never land, with rooms dedicated to different themes--baseball sports bar, golf, and so on. Around the world the company has deployed 160 TelePresence 3000 systems (the three-screen version), along with dozens more of the single-screen 1000s in offices like Jacoby's.

The system weighs in at just over a ton and requires a room at least 15 by 19 feet. It uses the Cisco MCS 7800 series server and the 7970G IP phone, running SIP over a 6-Mbps or better connection for the ultrahigh-def, 1080p version. There are three 65-inch HD plasma displays and an internal Gigabit Ethernet switch, which means if you look behind the curtain, as it were, you'll see that the whole thing runs through a single Ethernet cable. It's a superb chunk of technology.

It's also damned expensive. A single-room Cisco TelePresence 3000 unit goes for about $300,000, and since having one telepresence room is like rowing half a canoe, a full dual-room system, including furniture and other overhead, runs in the range of three-quarters of a million bucks. Which raises the obvious question: Who's going to buy these things?

The short answer: C-level execs who want to demonstrate their techno-progressivism--and their deep pockets. "Telepresence is not going to be purchased by the same people as traditional videoconferencing," says Ira Weinstein, a senior analyst at Wainhouse Research. "Telepresence is an executive purchase that comes down from the C-level and is pushed down through the ranks." Think of it as the corporate Lear Jet for a new sensibility.

Consumer products company Procter & Gamble has purchased about 15 Cisco TelePresence units and plans to deploy a total of 48 by April 1. The directive to invest in high-end collaboration technology, says Laurie Heltsey, director of global business services, came from the top. CEO A.G. Lafley challenged P&G managers 2-1/2 years ago to make the company "the most collaborative in the world," Heltsey says. At the same time, CIO Filippo Passerini "is very supportive of video as an enabling technology in many different business scenarios." So much so, in fact, he's been part of Cisco events hawking the technology.

Cisco TelePresence is seen as an especially valuable tool for P&G when collaborating with suppliers, partners, and retailers. "We do have some business-specific processes that are very well-suited for video," Heltsey says, "instances where you need your eyes for a visual review of some subject or item."

That sounds mighty powerful -- as long as the partner at the other end has a Cisco TelePresence room of its own. Despite Chambers' insistence on the potential for the technology to transform intracompany relations, the fact remains that there's no fully interoperable telepresence system in the world today, from Cisco, Hewlett-Packard, Polycom, or any other high-end videoconferencing vendor.

Cisco recently announced that its TelePresence units would work with existing standards-based videoconferencing systems, including SIP, H.323, and those supporting high-quality sound with G.711 audio codecs and high-quality video with H.264 video codecs. But those are legacy desktop systems, not other telepresence ones. "It's not like you can pick up a phone, whether it's a Motorola or a Cisco device or whatever, and still connect regardless of which service provider you use," says Nora Freedman, senior analyst for enterprise networks at IDC. "It's still very much you can only dial internally and connect among peers and colleagues." Cisco says it will interoperate with devices from Polycom, Tandberg, Sony, Aethra, VCON, PictureTel, VTEL, Huawei, and Microsoft.

One sticking point: establishing quality of service across carrier networks, particularly internationally. It's one thing to get Verizon and AT&T to connect for a telepresence session. It's quite another to get Verizon to work with BT in London and China Telecom in Shanghai. Much of Chambers' spiel around telepresence has to do with holding multiple meetings on multiple continents in a single day, so that's a serious drawback, albeit less than requiring each participant to shell out for a high-end Cisco system.

Partly, though, it's a Cisco thing. The world's largest provider of networking infrastructure isn't suddenly going to start providing fully open, interoperable, standards-based telepresence systems, even if that's what embracing the wild, wild Web 2.0 frontier entails.

"Cisco is betting on a proprietary approach," says Michelle Damrow, head of product marketing for Polycom's telepresence group. "We think standards-based communications will win eventually."

Indeed, Cisco faces strong competition in this nascent market, from the likes of HP, which introduced its Halo telepresence system before the Cisco product launched, and videoconferencing leader Polycom, which offers a high-end telepresence system with merged, seamless displays, as opposed to Cisco's three-separate-screens approach. Damrow notes Polycom is betting on a standards-based system that will interoperate with any standards-based video codex on the market today. And while HP's Halo is a closed architecture, à la Cisco TelePresence, HP is working with Tandberg and other vendors to introduce some degree of "family and friends" style interconnection.

Even if Cisco sells a few dozen TelePresence units to every P&G-size company in the United States, you've still got a relatively small business by Cisco standards. Where will the growth--and the business-model revolution envisioned by Chambers--come for Cisco 3.0?

The answer, as you might expect, is that Cisco believes its installed base, its brand power, and its marketing muscle will push enough TelePresence units into the market to allow it to become the de facto standard. Telepresence itself, says Chambers, will be offered as an on-demand managed service, at off-site locations for companies that can't or don't want to invest in their own systems. And when interoperability among multiple vendors does come, it will be on Cisco's terms, not industry-imposed.

If that's not quite Web 2.0 enough for you, well, welcome to John Chambers' world. Cisco 3.0: Coming soon to a three-screen, high-definition, surround-sound theater near you.