Estimates of the amount of business that will be done on the Internet have been very conservative claims John Chambers, chief executive of Cisco, who believes that by 2002 ecommerce could pass $1,500 billion or more.
Speaking at Gartner Group?s annual US Symposium, before an audience of 10,000 IT managers, vendors and analysts, Chambers said the potential savings would force the pace. He claims Cisco saved $500 million last year through its Web applications.
?By 2002 I think the estimates of $200-300 billion ecommerce are probably off by five to 10 fold, and the majority share will have swung from business to business to business to consumer,? he claimed.
Gartner estimates that business to consumer ecommerce will not be more than 50 per cent of the total until 2004.
His own company, Chambers revealed, was working with Microsoft on technology to improve voice over IP but would not give details.
Joseph Baylock, director of research at Gartner, pointed out that some Cisco products had a price premium in the market, as much as 25 per cent higher than competitors. In September he had begun advising users to negotiate accordingly.
?We are seeing some very aggressive pricing in the LAN switching market for example. As much as 60-70 per cent discounts and we won?t do it. It is only a short term strategy because you can?t make money at that price level and that means these companies are not investing in research and development,? responded Chambers.
He also believes the pressure to keep up with the ecommerce revolution would keep companies investing in network and Internet products throughout next year. The Year 2000 was already part of users? budgets and so he did not expect a big impact on revenue next year because of Y2K diverting spending.
Cisco is more worried about Asia, particularly Japan where Cisco has significant business and investments. Chambers said the slow down had been worse than expected but would continue to invest there and take advantage of the fact that service providers had to keep investing in infrastructure even during recessions.
Not to be downhearted, he offered an upbeat description of Cisco?s business in some of the worst hit regions: ?If countries are in recession we may be growing in negative terms.?
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