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Arming Cisco's Commission Driven Mercenaries

August 15, 2006 | HSL

Mothers, hide your daughters. Cisco's meat-eating carnivorous sales dogs, technical gunslingers and commission driven mercenaries have pulled into Vegas ...

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Cisco's 2006 global sales conference is being held in Las Vegas this week and the 15,000-plus strong Cisco salesforce has a lot to celebrate. According to Bloomberg's coverage of Cisco's fourth quarter conference call and results:

* Net income was $1.54 billion, or 25 cents a share. Excluding some costs, profit of 30 cents exceeded the 28- cent estimate of J.P. Morgan Securities Inc. analyst Ehud Gelblum. Sales jumped 21 percent to $7.98 billion, topping the average estimate in a Thomson survey.

* Moreover, the average of 28 different analyst's estimates puts continued growth at 15 percent in the coming year. John Chambers, Cisco's CEO, is betting on 15-20 percent.

* And if that wasn't enough to light up Las Vegas into the wee hours, we haven't even touched on the biggie:
Cisco is about to roll out Telepresence to the troops.

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In honor of the occasion, the Lab wanted to help pump up the volume a notch at the conference and explain to the rookies why telepresence is going to be the "Killer App" for the entire networking industry.

The HPL's Top 5 Reasons why Telepresence is the Killer App for the Entire Networking Industry

Reason # 5 - No other widely applicable application uses as much bandwidth as telepresence/effective visual collaboration.
Individual corporate group systems average from 1.5MB-45MB per room, and an organization might have multiple rooms in a single facility. Telepresence executive and desktop solutions use between 384K and 1.54Mbps + to each desktop.

Reason # 4 - Telepresence demands quality ... not just quantity.
Because real-time video is delay-and-jitter intolerant, not just any old bandwidth will do. Carriers and the enterprise are both going to need to upgrade their networks to support true QoS at high bandwidths. That is going to mean new and improved "Big Iron" in the core and big smiles at Cisco, Juniper, and others.

Reason #3 - Telepresence is a big ticket application that requires a lot of networking gear.
Telepresence group systems and distance learning environments can run $100,000 - $500,000 per room and include lots of IP gizmos: switches, premise routers, equipment racks, network drops at each position, and dozens of IP addressable devices from camera to codecs to audio mixers.

Reason #2 - Telepresence has a strong hard/soft dollar ROI in avoided travel
For the majority of the Global Fortune 5000 with distributed workforces, Telepresence offers a one-year or less ROI in avoided travel, productivity, time-to-market advantage, and business effectiveness. Even better, the ROI of telepresence GROWS EXPONENTIALLY as other sites join effective visual collaboration networks and companies begin using their systems for Inter-company business with vendors, partners, and customers globally. This market will expand rapidly to smaller companies, SMEs, law firms, advertising agencies, consulting, public accountancy, etc.

Reason #1 - Telepresence and effective visual collaboration networks are primed to grow exponentially!
Right now there are less than 40 companies deploying less than 300 telepresence group systems on a planet that has 500,000 traditional videoconferencing endpoints that nobody likes and 25,000 executive aircraft that represent the next best alternative to effective face-to-face collaboration.

Traditional videoconferencing never made it across the chasm as a preferred communications medium for a number of reasons: poor quality of end-user experience, the costs and weaknesses of ISDN, firewall issues between organizations, network quality, expense of bandwidth. Telepresence (& circa 2006 network quality) have effectively addressed these issues, and the quality of the telepresence experience continues to improve. Telepresence has already demonstrated usage 5-10 times the usage of traditional videoconferencing systems. More importantly, as organizations join effective visual collaboration networks that provide a "business-class consistency-of-quality" between all locations, each node has the ability to create "content" (Meetings, Distance Learning, Training, Certification, etc.) that can be "subscribed to" by others on the network. Telepresence and Effective Visual Collaboration Networks are "group forming networks / social networks" with the capacity to grow even faster (Reed's Law) than non-group forming networks (Metcalfe's Law) Get ready to see this dynamic further accelerated by economic and geopolitical events in the coming years as well. Telepresence is going to the moon... Hold on for one wild ride....

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Five Very Sharp HPL Arrows For A Cisco Sales Rep's Telepresence Quiver

To help make the hardest job at Cisco a little easier, the Lab has put together five very sharp HPL arrows for your telepresence quiver to help you educate end-users, telecommunications managers, C-level executives, and Board Members on the usage, ROI, and future of telepresence:

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Arrow #5 - Fire up your channel partners!

Here is an HPL Article for your partners on why the channel is going to LOVE Telepresence:

Cisco's Channel Partners Should Be Beginning to Salivate and Drool Over Telepresence Right About Now

Get 'em Fired Up! They are going to help you drive adoption and exponential growth!

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Arrow #4 - High oil prices and consumer price inflation is sending the cost of physical travel skyrocketing
Here is an article for Chief Financial Officers, Controllers, and Corporate Travel managers on recent cost increases for airfares, hotels, landing fees, transportation taxes, fuel surcharges, and virtually every other expense associated with physical travel:

The ROI of Telepresence Soars on Skyrocketing Airfare, Hotel, and Fuel Prices

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Arrow #3 - Physical Travel is becoming less convenient
It's more and more inconvenient for employees, and it's going to get worse - In our recent paper: Telepresence, Effective Visual Collaboration and the Future of Business at the Speed of Light we predicted:

Expanded war in the Middle East would likely arouse increased terrorism directed towards U.S. airlines and citizens abroad. This would result in tighter security at airports, imposing additional costs in lost productivity and the potential reluctance of key personnel to engage in business travel to certain regions. The net result to both domestic and international business: Higher physical travel costs in both ticket prices and lost productivity.

The day after the paper was released commercial air travel in the UK and the US ground to a halt due to the terror threat against transatlantic air travel. The restrictions that followed and and the potential of even more draconian measures don't bode well for productivity or information security while "in-transit" not to mention the quality-of-life issue for weary road warriors. Given the rising cost and growing inconvenience of commerical air travel it is growing incumbent on senior executives to begin to seriously evaluate alternatives to physical travel and have a business continuity strategy should commercial air travel continue to deteriorate or become prohibitively expensive.

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Arrow #2 - The Human Productivity Lab is here to help (Cisco and all the other telepresence industry participants!)
The HPL is going to continue to educate end-users, academia, the media, the trade press, telecommunications managers, senior executives, and board members on the usage, ROI, and benefits of telepresence and effective visual collaboration.

In the coming year, we'll also expand our coverage to Presence and Unified Communications and conduct a C-level conference and the ultimate TelePresence and Virtual Reality exhibition and playground at the University of San Diego on June 4th, 5th, and 6th.
More info at www.TelePresenceWorld.com

The Lab's website is the #1 destination on the internet for news, research, and analysis on the emerging telepresence industry and we make it easy for you to subscribe to the Lab's coverage via E-Mail OR RSS.

The Lab's newsletter, The Art of Productivity, also follows the telepresence industry and provides "News You Can Use" to improve your personal effectiveness.

The Lab's Telepresence Consulting Practice can help with every aspect of your client's telepresence strategy from realistic ROI modeling to RFP/RFI development, to designing HPL "pro-modified" telepresence environments for specialty applications such as multi-location research and development, telepresence entertainment and publicly available telepresence.

The Lab can even help you stay warm and cozy in an increasingly virtual world!

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Arrow #1 - Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light- Warning: For Big Game Hunters Only!
Written specifically for Global 5000 senior executives and board members the paper outlines the business case, benefits, usage, and ROI of telepresence. The paper addresses the issues of most importance to C-level decision makers and the economic and geopolitical forces that are accelerating the adoption of telepresence and effective visual collaboration solutions. It's the most comprehensive paper ever published on the topic-- the only thing missing is information on Cisco. (It was kind of hard to get any 411 with the TBU flying super stealth at Mach 2 ) So it will be up to each of you to compliment the paper and educate some very interested senior executives on Cisco's new offering. One of you guys or gals should start with the HPL because we can't wait to see what's been cooking in the Cisco kitchen!

Congrats to the whole Cisco salesforce, sales management team, sales engineers, product managers, marketing and public relations teams, project managers, implementation managers, senior executives, and channel partners on a superb quarter and fiscal year!

Enjoy the conference, Vegas, your new telepresence toys, and the full body cavity search in the airport before the flight home.

Good Hunting! - HSL

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