Cisco banks on mobile office for growth

Ben Klayman

CHICAGO: Networking giant Cisco Systems Inc. will introduce improved

mobile-office technologies at the COMDEX US computer show in Las Vegas this

week, as it moves to capitalize on a market where it sees huge growth potential.

The San Jose, California-based company, which makes gear that helps power the

Internet, believes there is rapid growth in technologies that provide customers

high-speed Internet access, including routers, digital subscriber lines, virtual

private networks, security hardware and software, and wireless local area

network (LAN) products.

The virtual office will be wherever the customer is, said Charlie Giancarlo,

Cisco senior vice president of technology development. "It allows someone

to be really as productive when they're on the road, or at home or at a customer

site, as they are when they're sitting at their desk," he told Reuters.

Giancarlo said the "mobile office" approach, which Cisco started a

year ago and is now expanding, combines a set of technologies and programs, as

well as partnerships with such companies as International Business Machine Corp.

While the market for such technologies is relatively small now, the growth is

potentially explosive, he said. Cisco has mobile-office technology in about

1,500 public spaces around the world, including airports, hotels and convention

centers, five times what it was last year.

The ultimate market is hundreds of thousands of locations, said Giancarlo,

who believes annual growth could continue at that pace for the next several

years.

For example, the market for 802.11 wireless networking gear, a wireless LAN

standard, is now about $1.5 billion a year, with the market growing at 50 per

cent a year, he said. Cisco will show off the next generation of that standard

at Comdex, where the networking company also will show its expanded lineup of

products for wireless LAN security.

At the current locations with mobile networking gear, total revenues spent by

companies on installation is already $200 million or more, Giancarlo said.

Cisco was expected to announce a deal this week with Fairmount Hotels &

Resorts Inc. to equip all of the luxury hotel chain's properties with secure

high-speed Internet access, using Cisco network infrastructure.

Cisco already has arrangements with Starwood Hotels & Resorts Worldwide

Inc. and the coffee shop giant Starbucks Corp. Up to now, growth has been

constrained because companies were not convinced there was much consumer demand,

Giancarlo said.

"There's been a chicken-and-egg problem," he said. "Hotels

were slow to put in the technology because there weren't a lot of mobile

professionals that had so-called virtual private network technology."

Now, people take their wireless printed circuit cards on the road so they can

get connected online quickly wherever they are, and more hotels are adding

ethernet docks, Giancarlo said.

(C) Reuters Limited.