Cisco systems: telepresence and the future of collaboration

Please provide 4 answers to the 4 questions at the end after reading this case:

Cisco Systems: Telepresence and the Future of Collaboration

If you want to catch a glimpse of the future of knowledge


work in the twenty-first century, a good place to start is a


small family homestead outside Germantown, Illinois,


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 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 colleagues


back in San Jose, but they made it work. Over the last


seven years, Huegens has become the spearpoint 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 fastestgrowing


in American business history. Cisco 2.0, Chambers


says, was centered on business process change—using all


that hardware and, of course, a few truckloads of new gear,


like information processing 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 percent


or 2 percent, but 3 percent to 5 percent 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, which is a lifesize,


high-def, multiple-screen system for face-to-face


meetings among users in multiple locations. The question is:


Is Cisco’s latest initiative just Videoconferencing 2.0, or is it


really something revolutionary?


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. She 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 selfdescribed


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 vice president 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.


Like many Cisco executives today, Jacoby has a single-screen


telepresence unit in a small back room off her office in San


Jose. Since it began to roll out the immersive conferencing


technology in late 2006, Cisco has deployed telepresence


rooms in 160 of its offices worldwide.


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 executive 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.


Much of what Jacoby talks about is hardly earthshattering—


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.”


One of the initiatives Jacoby and her team have undertaken


is to create 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 when communicating


with employees outside the United States.


Equally powerful has been Cisco’s I-Zone wiki, a companywide


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 one-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’s 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 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:




DeBeer’s 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


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 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 lifesize”


and “To initiate a meeting you have to do just one


thing,” for example, press a button on the handset.


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 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 standardsbased


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 that’s not quite Web 2.0 enough for you, well, welcome



to John Chambers’s world.Cisco 3.0: Coming soonto a threescreen,




high-definition, surround-sound theater near you.


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 I-Zone wiki described in the case,




Cisco’s forum for new business ideas, and its seeming


success in that regard. Why do you think that is the


case? Do these technologies foster creativity, provide an


opportunity to communicate already existing ideas, or


both? Defend your answer.