January 8, 2004

Cisco Systems SVP, Office of the President, Howard Charney gave the keynote address at the recent Networkers Brazil 2003 conference, held in Sao Paulo from December 9 through 12. The four-day event, which was themed "The Power to Transform Business. Now," was one of the most important technology events in Latin America this year.

In his address, Charney discussed how and why Internet technology has gone from being optional to integral in just twenty years, and what this dramatic revolution suggests for the global build-out of the Internet. News@Cisco discussed these ideas with him recently.

How is the Internet revolution playing out in Latin America?

Howard Charney: The region is adapting new technologies to meet its unique needs. For example, in Brazil, there are already more new wireless voice subscribers than fixed-line.

Latin American banks lead the Western Hemisphere in offering retail banking via multiple devices - including wireless devices, PCs, set-top boxes and the telephone. In fact, 43 percent of Latin American banks offer multiple-device access, compared with only 26 percent in North America.

Many countries are poised for exponential growth, thanks to Internet-enabled productivity. For example, B2B transactions already account for the vast majority of Brazil's e-commerce activity - $5 .3 billion in 2001. eMarketer sees that jumping to almost $35 billion - while Forrester predicts even stronger growth, to nearly $60 billion - by 2004.

Can you give any specific examples of creative Internet applications from some of these Latin American businesses?

In the area of IP telephony, the Secretaria de Seguranga Publica do Estado in Sco Paulo has developed a "tele-hearing" application that saves money - and lives. Tele-hearing lets a judge interview a prisoner via a two-way video connection between the court and the prison - thus eliminating the need to transport prisoners, which is one of the most dangerous assignments a police officer can draw.

Documents can be submitted electronically during a hearing, and the prisoner and lawyer have a secure IP telephony connection for confidential communication. The application runs on Intragov, the state government's IP data network, which was built with Cisco equipment.

Before tele-hearings, transporting prisoners cost 15 million reals (roughly $5.1 million) a year. With this Internet application, prisoners' rights are respected, police officers are at less risk, costs are reduced and 7,000 officers are freed up to patrol the streets.

The Temaiken theme park just north of Buenos Aires, Argentina, is another example - this time of a wireless IP telephony installation. Temaiken is spread out over 34 hectares, with Cisco integrated voice, video and data architecture linking all the park buildings and mobile equipment.

By implementing an IP architecture, Temaiken realized tremendous cost savings and mobility. The buildings are linked efficiently with fiber optics, and staff can access the network using wireless equipment - so, for example, a veterinarian can call up an animal's medical records using a wireless touch screen.

The solution can grow as the park's needs grow, and it supports employee and visitor access control, point-of-sale, closed-circuit TV, interactive exhibits, temperature and humidity regulation, illumination, the park-wide music system and the valves on the park's pools. The wireless network even allows for observation of reclusive or ailing animals.

Why are so many businesses turning to the Internet?

Howard Charney: In Latin America, as well as around the world, many firms are in the early stages of deploying IP infrastructure and Web-based applications. We've already seen productivity gains for the overall economy, and it's widely believed that those gains are the rewards of significant IT investment in the 1990s and continuing IT investment today.

Productivity is important because it's tied to standards of living. Rapid productivity gains, collectively, can raise the standard of living for people around the world.

Another, related, factor is that the Internet drives down costs. In the United States, for example, an online retail transaction costs 35 cents - versus 90 cents for a faxed order and $2.50 for a phone call. A bank transaction with a teller costs about a dollar, about 50 cents by phone, 25 cents using ATM and just one penny on the Web.

What's in store for the future, as the Internet revolution continues?

Howard Charney: We're on the verge of remarkable breakthroughs in many areas. Within just four years Intel expects to pack more than one billion transistors on a single chip, for example. And nanotechnology, the science of constructing new materials atom by atom, should soon give us remarkable new substances that will revolutionize transportation, construction and distribution.

Specific predictions are difficult, but one thing is clear: the time will come when people around the world structure their activities around Internet technologies - and those technologies will be widely available, affordable and easy-to-use. Because like cars, semiconductors and other genuine technology revolutions, the Internet in its many manifestations is fast becoming an integral part of everyday life, everywhere.