RealTime IT News

Cisco's CEO Sees VoIP as IT Catalyst

As the lifespan of traditional PBX phone systems run their course, expect enterprises networks to accelerate their adoption of Voice over IP , Cisco's CEO John Chambers said Wednesday.

"IP telephony is one of those telecom services that, architecturally, has already been determined," Chambers said at the network equipment giant's annual analyst conference.

But what remains to be seen is how quickly business customers will move their voice and data onto one network, and which products and services they will need to manage those networks.

Although IT decision-makers are gaining confidence in the economy, many are still wary of spending on large projects. But further evidence of recovery in the economy could spur them toward an investment in VoIP, he said.

In addition to VoIP, Chambers said customers will also likely be spending on storage, thanks to a slew of new federal regulations that call for improved record keeping by businesses.

Cisco is a relatively late entry to the storage sector, but it believes the business could be a billion-dollar revenue category within five years. Chambers said this quarter's storage revenues have already met last quarter's, which were disappointing.

The San Jose, Calif., company did make some news in its traditional router market today.

The company announced upgrades to its 7600 and 12000 series core and edge routing products. The enhancements are aimed at helping large service providers streamline their IP networks and deliver new Internet protocol services.

The products, which will compete with offerings from Juniper Networks , will be available next month ; pricing varies, depending on systems and options.

Comcast is one of the early adopters of the new gear. The nation's largest cable provider is preparing its network to handle converged high-speed Internet, video on demand and Voice over Internet Protocol .

Comcast isn't alone. Earlier this week Time Warner Cable said it will expand its VoIP service into 17 new markets, a move that shows the technology is moving out of the testing stage and into general use.

Analysts attending the Cisco event don't expect the company to update its financial guidance, or announce many products.

"We expect management commentary during Cisco's Analyst Day to remain positive about the tone of business and the improving economic environment," SG Cowen's Christin Amacost wrote in a note to investors. "We continue to believe the company is poised to return to double-digit growth in (fiscal 2004 and 2005)."

Cisco officials are slated to provide updates on its other advanced technology efforts, such as home networking (through its Linksys subsidiary), security, wireless LANs and optical products, during break-out sessions later today and tomorrow.