Cisco chief executive John Chambers has said the company’s strategy is to grow into more of a software company.
Chambers said Cisco simply wanted to begin to develop software as a business, instead of deconstructing its traditional IOS operating software and selling specific features as individual packages, as was understood from last year's Networkers conference roundtable.
“We have the view that we have to become a software company,” Chambers said during a conference with reporters this week. “But we’re not breaking IOS into segments.”
Last year Chambers said the company needed to evolve its software strategy in order to alleviate customer confusion, foster choice and not have software sales tightly coupled with hardware. This was interpreted as a plan to decouple IOS from hardware and sell it as separate packages.
Chambers has more recently said that was a misunderstanding. He also said WebEx, its recent $3.2bn (£1.6bn) acquisition that bolstered its unified communications, collaboration and Web 2.0 portfolio, presented a business model that had the potential to allow Cisco to expand beyond its traditional markets.
“The impact is in expanding into areas we would not have gone into otherwise,” Chambers said.
Last month, Cisco said it planned to release software jointly developed with IBM as part of an expansion of their existing alliance around telecommunications network management and service assurance.
On other matters, Chambers said the US definition of broadband needed to start at 100MB to 1Gbits/s rather than the kilobit rates now considered lowest tier service.
"That's dial-up in Asia," he said of the kilobit rates offered as broadband in the United States. He said 100MB to 1Gbits/s service needed to be broadly offered in the United States in the next five to 10 years.
Chambers also said spending in the US enterprise market, which has been challenging for Cisco in recent quarters, was reaching a point where the company would have a “soft landing". Cisco reports fourth quarter and full year results in a couple of weeks.
He said Cisco could play a “huge role” in green IT and data centre initiatives, one of its 19 priorities for the next year as the network became the enabler of power conservation in the data centre, home and other areas.
Cisco also had an internal initiative underway to transform its relationship with customers, Chambers said. As an example, he said customers are asking Cisco to expand its consulting and professional services expertise.