Cisco sees government taking lead in technology

"Government is starting to lead in its implementation of technology to change process," John Chambers said.

Henrik De Gyor

Once a technology laggard, government is beginning to pioneer solutions that will make agencies more productive and help drive the overall economy, the chief executive officer of Cisco Systems Inc. said this morning.

John Chambers, speaking at the opening of the FOSE 2004 trade show in Washington, said: "Government is starting to lead in its implementation of technology to change process."

Chambers said the trend began about seven years ago and has begun to pick up speed, with the Defense Department being one of the principal innovators. He cited the department's network-centric operations initiative as an example of government leading the way in technology innovation.

Going forward, Chambers said government will remain one of the leaders in directing new solutions.

But Chambers warned that implementing new technologies without first addressing business processes could backfire on agencies and their integrators.

In 2003, Cisco conducted a study to measure the impact of technology on 300 organizations and found that network-enabled applications, plus the appropriate changes in business processes, could increase productivity up to five times. However, Chambers said, the order in which organizations approach technology implementation has a tremendous impact on success.

If groups deploy network-enabled applications before changing relevant business practices, costs could actually increase by up to 9 percent, according to Cisco's study. On the other hand, modifying business practices before deploying applications could reduce costs by up to 30 percent.

"There are some agencies ? that threw a lot of money at IT and didn't get productivity increases," Chambers said. "If you don't change process or you don't get buy-in from the organization to change ? you don't get the productivity increases."

Chambers said productivity gains over the past five years have been in individual functions. Over the next 10 years, he said, productivity gains will be derived from cross-functional improvements, particularly among government agencies. In the future, Chambers said agencies will communicate using IP telephony and video on demand.

"You can't afford the overhead of separate data, voice and video networks," Chamber said.

Secure, interoperable networks will be at the core of cross-function productivity, Chambers said.

"Security is an art," Chambers said. "We're only going to be one or two steps ahead of the hackers or rogue nations constantly."

As a result, networks need to become more intelligent, with security functions built into hardware, software and firmware.

"You've got to begin to move intelligence into the ports of the routers and switches that are able to look at the bit patterns going through them," and isolate attacks to a network device, Chambers said.

"Are we there? Absolutely not. Is there any such thing as a secure network? Absolutely not. ...The key is how do we stay ahead of what is an ever-evolving threat that, unfortunately, will not go away," Chambers said.

Cisco will be looking to government to help address networking challenges. Chambers said customers drive technology solutions and described an example where Cisco defied conventional wisdom and made a strategic decision based on customer input.

Chambers said that 10 years ago, most people expected asynchronous transfer mode networks to reach desktop computers. But Cisco customers, including the Boeing Co., were betting on fast Ethernet connections, and they would only do business with Cisco if it invested in that technology.

As a result, Chambers said, Cisco bought Crescendo Communications Inc. in 1993, an acquisition that generates roughly $8 billion for Cisco today.

Although fast Ethernet turned out to be the winner in networking personal computers, Chambers said it's too early to say whether Cisco's focus on an intelligent information network of separate interoperable networks will make the government more productive.

"Time will tell if it's the right way to go or not," he said.

FOSE is produced by PostNewsweek Tech Media, parent of Washington Technology.

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