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Cisco (NASDAQ:CSCO) CEO John Chambers hinted that his company may be
on the hunt for more acquisitions, saying that Cisco already has
entered 30 adjacent markets to its core networking infrastructure
market, and plans to be in 50 adjacent markets within 18 months.

“The next generation of communications is about video,” Chambers said. “It’s about a connected life experience.”

Chambers said that the way to enter new markets is through
acquisitions, like Cisco’s purchase of Linksys a few years back, and
its recent buy of the company behind the consumer Flip video camera.
Chambers made the statements during his keynote address at the Cisco
Partner Summit in Boston today, which focused on the opportunities for
Cisco and its solution provider channel partners in the future,
particularly around video and other collaboration technologies.

While Chambers conceded that the current economic environment was among
the toughest times end customers have ever seen, Cisco has faced
economic downturns again and again – and has gained market share in the
process – by balancing innovation with discipline and process,
according to Chambers.

During the 2001 downturn Cisco cut 25 percent of expenses, Chambers
said. “We had no choice but to take out headcount and salaries
expenses,” he said. “This time is different.”

This time Cisco took out $1.5 billion in expenses without the big cuts
to salaries and headcounts, and that’s what gave the company the
capability to enter those 30 market adjacencies, he said.  Those
adjacencies have included market expansions to emerging countries, Web
2.0 technologies, collaboration, unified communications and
telepresence.  Others are smart grid, smart connected communities,
virtual healthcare, safety and security, and consumer.

Video and collaboration will be the underlying infrastructure for these market adjacencies.

“Telepresence is the flagship,” Chambers said. “It allows customers to
get what Web 2.0 is about. Behind that is a depth of opportunities to
go rapidly in unique ways with Web 2.0 across entire companies.”

Chambers presided over a demonstration that used telepresence as the
platform to demonstrate a series of other products from unified
communications to a partner application to help nurses locate
healthcare assets such as wheelchairs within a facility.

Within Cisco itself Chambers says the company conducts 4,700
telepresence meetings a week.  The company changed the format of
its recent sales meeting to a virtual one. The meeting, which used to
bring in 17,000 people and cost $4,307 per person now costs $437 per

“This is the greatest opportunity of our lifetime,” Chambers said, completely changing the way we do things.