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July 22, 2010

Q&A with Phil Smith, vice president and CEO, Cisco UK & Ireland

CBR talks to Cisco's UK boss about the economy and the drive for sustainability

By Vinod

How is a company as big as Cisco doing in this very uncertain market? Is there still opportunity for you?
Very much so. We’re all reading the same analyses about the economy and it seems to change from day to day – my favourite recent prediction was that we are headed for a saxophone-shaped recession, whatever one of those is! But the genuine reality is that we are doing well, particularly so in the UK, where we had the best growth rate in all of Europe and our performance was singled out on the results conference call.

Phil Smith, Cisco UK CEO

How is that – how can Cisco be doing well in such a tight market, when the CIO is being tasked to cut costs constantly?
Across Europe, yes there are some fragilities but people are still doing business and still servicing customers and I see tremendous potential in things like smart grids, 2012 here in the UK, the Cloud, for more growth still. I see it as a constant swing between two drivers: innovation and productivity. At the moment, yes, the emphasis is on the latter, on drives to greater operational efficiency, which typically manifests itself as cost-cutting. But you also have to innovate, be that looking for new ways to communicate or work with customers. The market for technology like ours is being driven by companies who haven’t lost sight of the fact that they need to do both.

Can you give us an example?
One very obvious one is the very common, widespread productivity drive around reducing travel that has also ended up being innovative many organisations have been pursuing. You want to chop opex so you look to curb corporate travel through use of conferencing technology and it’s a way to make real impact; we ourselves have cut that overhead down from $750m to $250m, for instance, and we’ve helped Tesco do something similar, a 40-50% reduction in travel spend.

Maybe more CIOs should be looking to be recognised by launching similar things? Or is there job to keep the lights on, as the cliché has it?
I think the heyday of the CIO was back in the peak of the eCommerce boom and they’ve got a lot more subdued in recent times, when the emphasis has been, yes, on cost-control. I’d like to see that change back a bit. I was very disappointed when I was at a CIO roundtable on sustainability recently and of 16 guys in the room only one had been involved in the discussion about that at board level – the other 15 had just been handed it as another job to do. That’s crazy, surely, when there and in so many other places it’s technology that is the only way to deliver things like sustainability.

So what are you saying to the CIO?
I’m saying that as the market changes and we see more and more of a service model come to the fore, symbolised by what we’re all calling cloud right now, with all the consolidation and virtualisation going on, your job is to strike the right balance, and it will be constantly changing, between those innovation and productivity drivers. At the same time, be open to how the wider world is changing too – the key term here I think is growing and growing diversity, in all aspects of that, from technology provisioning models to the kind of resources both human and energy you’re going to need. So yes, focus on productivity – but don’t neglect innovation. And if you can do both at the same time, you’re really winning for you and your organisation.

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