Comdex, Las Vegas, November 18
Cisco has invested 20 million dollars to train high school students to run networks. The students learn hands-on technology skills that make them employable whether or not they continue to college.
Cisco plans to spend millions more, expanding the program from 57 high schools in 11 states to the rest of North America. Europe and other continents will be added in the future, said John Chambers, CEO in a keynote address.
Cisco Systems supplies 80 percent of the routers that make up the backbone of the Internet, but is largely unknown except to the type of industry professional who attends Comdex. The company is developing a strategy to become a household name. This will help it stay competitive as the Internet becomes part of everyday life. Chambers prediced the Internet’s impact on the way we work, live, and learn.
“We are part of the Internet generation, and it is hard to stay ahead of changes. The Internet evolves in dog years, because seven years of development happen in one year.”
Countries who use the Internet to be more effective will determine the future of their economies. It used to be that the US had a four to five year advantage over the Japanese on Internet use. They have moved rapidly to close the gap, he said.
At work, Cisco used the Internet to gain a 50 percent increase in productivity. We saved 250 million dollars by using five applications. We had the biggest savings by improving customers support. Most customers had the same questions, so we automated the response system. Our support centers had three thousand calls a month, which was projected to grow to twelve thousand.
We couldn’t hire enough people for the growth. Now two-thirds of calls are handled on-line. Customer satisfaction has increased. We saved labor costs of a thousand engineers. Instead of putting the engineers into customer support, we used them in research and design, he said.
Only an engineer could become excited about the design of a network, Chambers said. We want the Internet to be as easy to use as the telephone. We forget that it has taken a hundred years for telephones to become so easy. It took partnerships and cooperation between companies and governments. Cisco forms partnerships between service providers like GTE, hardware vendors and Internet appliance vendors like Microsoft and Intel.
It used to take eight years to bring a car to market. Today, automakers want to produce it in one. This requires communication across the network to suppliers and manufacturers around the world.
There is a financial business shift as securities are purchased on-line. Brokers must become full service financial consultants, cross trained in banking and insurance. Insurance companies might also compete with banks and brokerages, selling stocks and other financial instruments, he said.
On-line shopping is increasing. Stores have to decide what they will add to the buying experience to compete. They have to develop on-line stores to supplement traditional ones. “Companies who don’t understand how to make the shopping experience more pleasurable won’t survive,” he said.
On-line shopping works best when people have a definite product in mind, such as a book, toy or automobile. Currently, about 90 percent of Internet commerce is concentrated in business to business sales, but that will change within months. Businesses will address issues like security that concern home shoppers. As people become accustomed to buying on-line at work, they will be more likely to shop on-line at home, he said.
Sixty percent of children are in daycare. Most parents rate the quality of daycare as low. With cameras, parents and grandparents can watch their children over the Internet. “I wish I could use similar technology to track my teenager,” he said.
For the way we learn, the network is vital. Most universities will tie the dorm rooms together to the Internet. Distance learning will be used for continuing education. In the U.S. we have 64 percent of schools with an Internet connection. We need to train the teachers to take advantage of it. Our education system is not preparing students for available jobs, he said.
In the U.S., the average hi-tech wage is 72 percent higher than other wages, yet companies are limited in their ability to grow by a shortage of qualified employees. We need to train our employees better, or lose our competitive advantage. Our university system is one of the best in the world, but elementary and secondary education is broken. Twenty nine percent of the students who go to college have to do remedial work, he said.
Business has to call for change. We have to push for testing so we can measure results. We have to give students a choice of schools. We have to tie results to rewards, he said. Other companies must support schools as Cisco has.
“When we wire the schools, it doesn’t do any good unless the schools have teachers trained to use the network,” he said.