February 7, 2002

Charlie Giancarlo, SVP/GM of Technology Development, leads five of the twelve core and emerging technology groups at Cisco. One of these is the newly-formed Carrier Systems Group. With Cisco veteran Kambiz Hooshmand as Vice-President and General Manager, the Carrier Systems Group will focus on systems designed specifically for the needs of carriers.

We met with Charlie to hear more about the thinking behind the formation of this group and the plans for continuing to build Cisco's presence in the service provider market.

Q: Why are you dedicating a technology group to carrier systems now?
A: Carriers have always been an important customer group for Cisco, and one reason for creating the Carrier Systems Group was to focus some dedicated development and marketing on this segment of our business. Traditional carriers continue to constitute the vast majority of capital investment, as they upgrade their existing voice and data networks for greater efficiency and to support their evolution from narrowband to broadband service delivery. If we can help make the carriers successful, Cisco will be successful, too.

Another important reason was that bringing our carrier-oriented business units together enabled us to align efforts and sharpen our focus in some key technology areas, such as ATM, Frame Relay, remote access aggregation, DSL and voice switching systems, including VoIP and VoATM gateways. Doing that meant we could increase our own efficiency while improving our delivery of carrier-class systems to service providers.

Q: Is the Carrier Systems Group the only group addressing this set of customers?
A: Cisco has a number of other technology groups that offer aligned products and solutions for service providers, such as Optical Networking, Internet Routing, Network Edge Aggregation Routing, Internet Switching Services and Network Management Services.

Q: How does this fit with the traditional Cisco focus on IP?
A: Our focus at Cisco has always been on the customer. We recognize that our customers have a range of requirements and approaches to designing their networks and we offer a variety of technology systems to help them meet their objectives. The voice market is a good example of this. Traditional voice networks are evolving to take advantage of new technologies, both to reduce operational costs and to provide a foundation for meeting the future requirements of video, broadband, and Internet applications. Carrier customers demand high availability and feature richness in their networks. While many are choosing IP for this, many others will base it on ATM. The Carrier Systems Group will offer solutions that let the customer determine the mix and designs most suitable to their needs.

Q: What will the priorities be for this group?
A: The mission of this group is to provide carrier-class systems that enable service providers to offer new revenue-generating services and to increase profitability. Our priority will be to provide best in class systems that exhibit the highest reliability and lowest cost of operation for enhanced services.

Q: How will Cisco differentiate itself in this space?
A: Cisco has differentiated itself in the past on a number of different carrier systems. In the dial space, we were able to penetrate the market by providing the densest, most feature-rich dial access systems available. In the ATM and Frame Relay space, we provided the world's most reliable and feature-rich layer 2 networks, and then extended these networks into IP enhanced systems. Going forward, we plan on being the leader in voice switching and gateway systems and in data transport systems.

Kambiz has spent nearly two decades in the carrier space and in voice technologies. Through his work with both domestic and international carriers, he helped build some of the largest and highest-availability data networks in the world. He and his team bring a depth of experience that will be invaluable to our customers.

Q: From a technology standpoint, what do you think are the biggest issues facing carriers today?
A: There are numerous technology issues facing carriers today in an increasingly competitive environment. One of the most immediate is how to transform their businesses from being based primarily on basic voice services, as they are today, to being based on higher value services in the near future. A major issue is how carriers will transition their networks to include more next generation equipment while maintaining existing services and simultaneously reducing their operating costs.

Often, carriers like the density and performance capabilities of new products but are not able to use them because of the lack of software compatibility with existing services and systems. They may also be interested in products from start-up companies, but are concerned that those companies may not survive or about their ability to scale with the requirements of the carrier. All of these things are significant challenges for our customers.

However, at Cisco, we have the technologies and the resources to provide both the necessary systems and the support infrastructure to grow along with the services carriers want to offer. With the sharpened focus that the newly-formed Carrier Systems Group gives us, we'll be able to deliver the ATM and IP switching, access, and voice systems our carrier customers need.