140 Management Information Systems

CASE 33
Cisco SYSTEMS: TELEPRESENCE AND THE FUTURE OF CoLABORATION
t you want to catch a glimpse of the future of knowledge work in the twenty-first century, a good place to start is a
Ismall family homestead outside Germantown, linois, 40 miles east of St. Louis. That's where
of architecture for networks, data centers, and unified communication services at
Craig Huegens, director
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
newborn son to grow up around family, who now live just five miles down the road. his
Nevertheless, it was something of a
revolutionary concept because 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
seven years,
colleagues back in San Jose, but they made it work. Over the last
Huegens has become the spearpoint for the philosophy and technology at the center of
strategic shift since the tech bubble burst in 2001-"Cisco 3.0," as CEO and chairman Cisco's biggest
Cisco 1.0 was all about John Chambers likes to call it.
getting people connected by selling truckloads of routers and switches, and it
company, founded in 1984 by a small group of made the
American business history. Cisco 2.0, computer scientists out of Stanford University, one of the
Chambers
says, was centered on business process change-using all that hardware fastest-growing in
course, a few truckloads of new and, of
gear, like information processing
Cisco 3.0 employs even more hardware telephones-to drive innovation and productivity gains.
and software to transform business
evangelical fervor, says it will fundamentally models, and Chambers, with characteristic
last seen in the economic change the nature of work, enabling productivity
surge of the late 1990s. "We believe that growth to soar back into the realms
3 percent to 5
percent for the sustainable future," says Chambers productivity can grow not at 1 percent or 2 percent, but
That's an audacious vision, and it in an interview in his office in
Cisco's San Jose
now
will be driven, Chambers
keeps Huegens in touch with his team in San Jose: maintains, by the type of collaborative, Web 2.0 headquarters.
mounted on WebEx (which Cisco interactive Web forums like wikis and technology that
acquired in March for $3.2 billion); and above blogs; IM; interactive "teamspaces"
telepresence, which is a life-size, high-def, all, videoconferencing and its
big brother,
The question is: Is Cisco's
latest initiative just
multiple-screen system forface-to-face meetings among users in multiple
The new
emphasis on intensely collaborative Videoconferencing 2.0, or is it really something locations
own dog food," technologies at Cisco, a revolutionary?
ups the ante for CIO Rebecca company that
for rolling out Jacoby. She assumed that post just over a epitomizes the catchphrase "eating our
telepresence and other new-age tools to the year ago and has been the point
Jacoby, who's been at Cisco for 13 demanding in-house customers at Cisco. person
takes over at an years but is a self-described
nontechie (she came up
interesting time. Not only is she Cisco's first through the manufacturing ranks),
vice president of the Global
Government Solutions Group, she is also female CIO, succeeding the semilegendary Brad Boston, now senior
any in the company's
24-year history. To do so, Jacoby says, Cisco is helping to lead Cisco
through a transformatiorn as radical as
collaboration tools. Like many Cisco making itself the test bed for the
office in San Jose. Since it executives today, Jacoby has a next
generation of
began to roll single-screen
out the immersive conferencing technology in late telepresence unit in a small back
room off her
rooms in 160 of its
offices worldwide. 2006, Cisco has deployed
When Chambers first talked to telepresence
with being the chief IT Jacoby about taking on the CIO job, she wasn't sure she really wanted the
executive for one of the world's
the entire company, most powerful and
venerated IT companies. The spotlight that goes
however, "was irresistible to me," she prospect of
deploying new technologies and educating says. Jacoby realized that the
conventional role of
transtorming
the collaboration tools out employees using them-was now, at least in
on IT-acquiring ana
there,
Much of what Jacoby talks they' re
not necessarily initiated part, flipped. "When you talk abou
about is hardly
by IT," she says.
she says-but its earth-shattering-she
penvasive use at a company of Cisco's size and has become an
enthusiastic user of video blogs, or
connected, tech-sawy users, the adoption age is probably unusual. With a viog
environment of directed
and learning flow both
ways, to and from Cisco's IT
globalized workforce of higny
participation," in which the tools already being used group. Jacoby calls it "creating
sharpened to drive innovation and growth. "Our biggest by Cisco employees are adapted, retinea,
and seeing how we can challenge," she a
participate in how they are shaped and focused."says, "is just keeping up with where these ideas are 9
One of the initiatives Jacoby and her team
have undertaken is to create an
where new collaboration tools-from wikis to online "communications center of
vlogs to telepresence-can be
deployed, tested, and refined. Video, shesay'
excellern
"phenomenally effective," particularly when communicating with
Equally powerful has been Cisco's -Zone wiki, a companywideemployees outside the United States.
forum for new business
Emerging Technologies Group, headed by Marthin DeBeer. Live for 18 ideas launched not by IT but oythe
months, the wiki has produced 600 ideas potential
for
 e-Business Systems 141

billion-dollar-per-annum-size ventures (the minimum level for Cisco to get behind a new business), suggested by the company's
more than 61,000 employees.
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 reorganization 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 towarda more horizontal, less command-and-control structure of "councils, boards, and task forces."
"Thecouncisfocus on $10 bilion-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 sormewhat 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. "r'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.
DeBeers executive assistant, Margaret Hooshmand, can be found almost every day outside his office in San Jose. Only she's not
really there, she's at the Cisco office in Richardson, Texas, and she bilocates via telepresence to the cubicle adjoining DeBeers
office. You can walk by (in San Jose) and chat with her any time, and if you don't remind yourself, you'! 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 hiring the first engineer in February 2005 to shipping 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.
f 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
piece of technology.
"Cisco is betting on a proprietary approach," says Michelle Damrow, head of product marketing for competitor 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
from 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.
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. When interoperability among multiple vendors does come, it will be on Cisco's
terms, not industry-imposed.
if thats 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.
Source: Adapted from Richard Martin, "Cisco's Emerging Collaboration Strategy," InformationWeek, January 28, 2008.

Case Study Questions

1. What are the main business benefits of the collaboration technologies described in the case?
2. How do these go beyond saving on corporate travel? Provide several specific examples.
3. Michelle Damrow of Polycom notes Cisco is betting on a proprietary standard for its TelePresence product, while competitors
are going with interoperability. Do you agree with Cisco's strategy? Why or why not? Defend your answer.
4. Think about the -Zone wiki described in the case, Cisco's forum for new business ideas, and its seeming success in that re
gard. Why do you think that is the case? Do these technologies foster creativity, provide an opportunity to communicate al-
ready existing ideas, or both? Defend your answer.

Real World Activities

1. Go online and search the Internet for commercial offerings that compete with Cisco's TelePresence products, such as those
noted in the case. Prepare a report comparing and contrasting their features and specifications, and justify your selection.
wOuld it matter whether the purchasing company was large or small?
2.
Put yourself in the place of newly hired Cisco employee. How comfortable would you feel working on a team distritbuted
a
across the globe, using the technologies described in the case? What would be the major challenges you would face? Break
into small groups with your classmates to discuss these issues, and explore the reasons behind any conflicting viewpoints.