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Cómo aumentar la productividad a través de Internet (inglés)
Texto de la conferencia de Howard Charney en Networkers Brasil 2001, sobre la manera como Internet permite aumentar la productividad en las empresas y los trabajadores. Material en inglés.
OBTAINING PRODUCTIVITY FROM THE INTERNET
Cisco Systems Senior Vice President Howard Charney
As presented at Networkers Brazil
November 8, 2001
Bom Dia. I'm delighted to be here this morning to talk about the Internet. And, as you saw in the opening video, how the Internet is changing the way we work, live, play and learn.
Now, some might argue that the Internet bubble has burst. Capital spending by telecom companies has dropped five percent this year -and may decline as much as 20 percent in 2002. The same is true in worldwide spending on semiconductors, which is predicted to fall 26% this year. This is important for the viability of the Internet because, as Intel Chairman Andy Grove says, "the Internet runs on silicon."
However, it's important to keep these figures in perspective... and, as business leaders, to look to the future. While the semiconductor industry is down this year, it's expected to begin a slow recovery and grow about 13% in 2002. Worldwide investment in information technology continues to boom, growing from $1.1 trillion this year to an expected $1.44 trillion in 2004.
Although world economies are challenging today, the fact remains that the Internet continues to proliferate at a rapid pace. There are some 523 million Internet users worldwide today... with three-quarters of a billion predicted to be online in 2003. Latin America's online population is expected to soar, from 21 million last year to 77 million in 2005. And as the Internet becomes more pervasive, so do applications such as e-commerce. Trillions of dollars cross the Internet each year in the form of e-commerce. On-line sales around the world are predicted to grow from $635 billion today... to $1.9 trillion by 2003.
These numbers are even more noteworthy here in Brazil. According to a new report by eMarketer, Brazil will continue its dominance of the Internet in Latin America as its more than 10 million users represent 40% of the region's Internet users. E-commerce is expected to mushroom from $2.47 billion last year to $430 billion in 2003. And the growth will most likely be even greater when the government deregulates the telecom market next year.
As you can see, we're actually in the midst of a very exciting time in the evolution of the Internet. The Internet is becoming pervasive around the globe. And as the Internet becomes a more common tool for enterprises, governments and other organizations, we've been able to identify a very tangible benefit of the Internet. Productivity.
The link between the Internet and increased productivity is a topic of debate among economists around the world. However, I would side with the historical evidence that correlates the two.
In the United States, for example, if you look at productivity, or worker output per hour, over time, you can see a steady increase with two significant breaks-one in the mid-70s and one in the early 80s. There are several explanations for the blip in the 70s, including higher energy costs and lagging investment. The slowdown in the early 80s is a bigger mystery. As computers improved and became ubiquitous in the 1970s and 1980s, economists waited to see productivity rise. But it did not. In fact, MIT economist Robert Solow said, "We see the computer age everywhere except in the productivity statistics."
One popular explanation is that all the high-speed computers required greater interconnectivity before they could really boost the nations' productivity. And guess what happened when the Internet began to emerge in the 90s providing that missing link? Productivity went up.
The connectivity of the Internet paves the way for significant boosts in worker productivity. The Internet makes information available faster and cheaper-which means workers can make faster, better business decisions. The Internet also offers significant productivity gains in business-to-business commerce. For example, large companies like Ford Motor Company, Hallmark, Intel, Raytheon and Whirlpool are reducing inventories by more than 40% and lowering logistics costs by as much as 20% by moving their supply chains online.
There are a number of studies that substantiate the claim that productivity gains are linked to the Internet. The Federal Reserve Bank of New York claims that the industries that invested the most in information technology in the early 90s experienced the greatest productivity gains during the late 90s. And PriceWaterhouseCoopers reports that companies using the Web as part of their business in 2000 experienced 2.7 times higher productivity than those that did not.
So you're probably wondering, 'how can my organization reap these benefits?'
Obtaining productivity from the Internet can actually be accomplished in four stages.
The foundation of these stages is, of course, the Internet itself. And concurrent with the growing use of the Internet comes an application that has become such a standard communication tool, we take it for granted. I'm talking about e-mail. It's estimated that by 2005, 35 billion e-mails will cross the Internet every day.
And while it's the most rudimentary form of Internet communication, e-mail can make a significant contribution to productivity. In fact, e-mail in the workplace saves employers about $9,000 and more than 300 hours per employee each year, according to Ferris Research.
So e-mail utilization can be thought of as Stage Zero in obtaining increased productivity from the Internet. The "real" or modern stages are: Information ... Interaction ... Collaboration... and Transformation.
And there are three dimensions to these four stages. The first dimension is how many parties are communicating. That is, is it an exchange between one person and another... or are numerous parties involved? The second dimension is whether transactions occurred or not. With transaction, I mean some form of reciprocal activity such as the sale of a product or an exchange of ideas. And the third dimension is the richness of experience. Meaning, is it simple text... graphics... or the quality of a full-motion movie?
So let me walk you through this framework.
Stage one, Information, is using the Web to get information. It's one-to-many communication... as opposed to email, which is typically one-to-one. There is no transaction involved. And the richness of experience is basic, limited to text and color graphics-with some sites offering video for viewers with broadband access.
Stage 2, or Interaction, is defined by e-commerce, or using the Web to buy and sell things... and e-service: using the Web to deliver customer services.
In this stage, the interaction is similar to Stage One in that it takes place between one and many people. It's highly transactional. And like Stage One, the richness of experience is generally fairly low-with some sites offering colorful graphics and JPEG photos.
We talked earlier about the enormous growth of e-commerce. Let's take a minute and talk about e-service. Today, e-service generally means getting answers to questions and conducting transactions online. In the future, e-service will be even more compelling.
For example, how about integrating a business Web site and a customer service call center? And let's take that a step farther: let's combine the Web, telephony, and live video. Now, it actually has a name. It's called Web-enabled 'computer telephony integration.' Let me show you an imaginary example of how it might work using a non-technology product.
Say you see an ad on the Web for something that you're interested in, but you have a question. You click on the page and instantly you're in communication with a customer service representative who will help you. Let me show you how this works.
Actually, I'm shopping to get my nephew a birthday present. And, like most nine-year olds, he's a huge fan of Harry Potter. He's read all the books ... twice ... and he collects everything that has to do with Harry Potter and the Hogwarts School. And believe me, there's a lot to collect!
I do recall I bought him a couple of gifts before from this very Web site, but I can't remember exactly what it was I got for him. They probably have some records of what I already bought. So, I could write an e-mail message to this address and maybe they'd get back to me in a day or two. But I have a problem: his birthday is in two days. Which means I just can't wait!
Now, I could dial the toll-free number, but why push me away from this great design and interactivity to be on-hold listening to elevator music?
This takes e-service to a new level. It certainly beats driving to a store and waiting in line. When I click, she's right there ready to help me. I hardly have to explain myself. She has my purchasing history and my secure credit card information-which speeds the process along.
Unlike the earlier stages, Stage 3 establishes a basis for electronic collaboration because it's about many to many communications and transactions. Because it uses more sophisticated applications that tap into voice, video and data, the richness of experience can vary from medium to high.
Stage 3 applications can include instant messaging... virtual meetings and video conferencing... and digital design. For example, CATIA is an online design tool used to build planes... design golf clubs... and design cars. The collaborative software automates the entire engineering and manufacturing design phase. It not only lets workers "visualize" the vehicle being built in 3-D, but the Web-based software can also be used to simulate the plant, the processes, the tooling, even the people involved.
Another premier example of digital collaboration is e-learning. With e-learning, content is created in modules and delivered to students in various formats over the Web. Students can listen to live broadcasts or Videos on Demand, which are stored in a network library. They can participate in live, virtual classrooms. They can even "learn by doing" in virtual labs.
One of the most exciting aspects of Cisco's e-learning software is a tool called prescriptive learning. Prescriptive learning is to e-learning what an individual tutor is to lecture-based learning. It's the ability to adapt course content to the individual student's comprehension and learning level. Students are given online assessment tests. And, based on an individual's score, the system identifies areas of deficiency and prescribes the appropriate courses.
One of the amazing aspects of e-learning is that it can provide such a personal learning experience... even to students in the most remote parts of the world. For example, five Indians from the Arhuacas, Arzanias and Kogui tribes who lives in the Sierra Nevada de Santa Marta in Colombia are currently taking online courses to learn how to design, build and maintain computer networks. These men and women are coffee harvesters and live in a village with no electricity. They come down from the Sierra Nevada once a week to take courses online through the Cisco Networking Academy- a program that currently enrolls more than 20,000 Latin American students. The Colombian students communicate with their teachers and classmates by e-mail. And they hope to use their Internet expertise to help develop the community where they live.
Now let's move on to the fourth and final stage of obtaining productivity from the Internet. This stage is called Transformation.
Achieving Transformation is much like the Buddhist concept of reaching Nirvana - it's not easily done and, once you get there, you have to keep working to stay there. In the Internet world, getting to Transformation requires a high-speed IP network, which lets you use the Web in every imaginable aspect of your operations. Sales... customer service... employee benefits... the supply chain... and sharing information internally and externally. In Transformation, Web-based applications are integral to everything you do. It's many to many communications. It's highly transactional. And the richness of experience is very high. The communication is dynamic... smooth... and captures graphics, photos, videos, and live interactions.
An excellent example of a company that's being transformed by using the Internet is CEMEX, one of the largest cement companies in the world and headquartered in Monterey, Mexico. Working in the challenging and often unpredictable global construction industry, CEMEX wanted to find a new way of conducting business. One that provides flexibility and efficiency. And they're using the Internet to accomplish this goal. By integrating Web-based tools across its business, CEMEX has been able to reduce the standard three-hour ready-to-mix concrete delivery window to 20 minutes. They will save between six and eleven million dollars from e-procurement this year. By the end of 2001, CEMEX aims to have more than 50% of its platforms supported by the Internet. And they expect to see a 100% return on investment within three years of implementation.
It's important to point out that there's one practical reality for reaching the most advanced Internet state of Transformation. It requires massive bandwidth... and broadband connections. Connections that are orders of magnitude faster than dial.
Broadband deployment is increasing around the world-but not at a rate that will satisfy the world's insatiable appetite. The number of broadband subscribers worldwide will grow from 21 million this year to nearly 84 million by 2005-which is just a small percent of the hundreds of millions that are already online.
Bandwidth-intensive data traffic has already surpassed voice traffic on the public network. Businesses and consumers continue to push for high-speed data services, such as DSL, cable modem, audio and video Web casts, and Virtual Private Networks. This relentless increase in bandwidth demand is challenging traditional systems, such as circuit-based networks and even SONET and ATM networks.
The reason people are clamoring for more bandwidth is because it brings you into three-dimensional, "always on," real-time Internet communications. It opens up a new world of Internet applications that touch our everyday lives. For example, just two months ago, a doctor in New York used "telesurgery" to remove the gallbladder of a patient in Strasbourg, France. Using a fiber-optic broadband connection, a one-second transmission delay was reduced to less than 0.15 seconds on the 4,000-mile telecommunications link. The operation was complete in 45 minutes... and the patient has made a full recovery.
Another example is e-government -a very important initiative for Brazil. Today, a number of governments are making incredible strides. For example, 75% of Australians file their taxes online. Tens of millions of Brazilians voted electronically in the 2000 elections. In the Czech Republic, 80% of customs declarations are submitted electronically. In France, medium and large businesses are required to pay taxes online. These are very exciting accomplishments-but they're all in Stage 3. Broadband connections can bring e-government to the highest level, Stage 4. Citizens in rural areas could attend government meetings via Web casting. They could download training courses for a variety of government services-such as how to apply for a business license. As we saw earlier in the Harry Potter demo, government employees could provide real-time customer service to citizens no matter if they were home, at work, or traveling -as long as they had a broadband connection.
The call for bandwidth-intensive, rich Internet applications is what brings me to the final portion of my speech. For my remaining time, I'd like to share with you the areas where Cisco is focusing its future. We've identified 11 technology areas that are the future of networking. We've even organized our company around these areas because we believe they will provide the transport speeds, bandwidth capacity and network intelligence that's required for creating an Internet that's as accessible... as easy to use... and as high quality as flipping a light switch today.
These areas are remote access... aggregation... core routing... local Ethernet access... IOS software... ... Internet switching and services... network-management services... optical... storage... voice-over-IP... and wireless.
Let me take a look at a few of these technologies that have particular relevance for Brazil and the rest of Latin America.
First, let's talk about Voice-over-IP. Just a few years ago, people laughed when companies like Cisco were talking about transmitting high-quality voice calls over the Internet... instead of a traditional circuit switched infrastructure.
In just a few short years, a revolution is building. Individuals spent 200 million minutes using IP telephony in 1998. 2.5 billion minutes in 1999. And the number is predicted to jump to 635 billion minutes by 2006.
A Voice-over-IP network carries voice calls at a lower cost than a switched circuit telephone network because IP telephony networks make better use of available bandwidth. In a circuit-switched network, a dedicated 64 kilobits-per-second end-to-end circuit is used for every call. In a packet Voice-over-IP environment, many more voice calls can be transmitted for the same amount of bandwidth space-which results in lower costs. These cost-savings can be significant. Cisco estimates that a company of 1,000 people can realize a 136% return on investment over three years with IP telephony.
The cost-savings are also significant for service providers. In Mexico, for instance,
I-Next, the data division of Operadora Protel, has recently expanded its packet voice IP services to six cities in Mexico and is currently carrying approximately 5 million minutes of voice traffic monthly. They now intend to expand to 35 cities in the next six to 12 months. I-Next originally installed a Voice-over-IP network to reduce long-distance costs. And within the first two months of turning up service, they achieved cost savings of $145,000 each month. Now they're also using the IP telephony network to offer customers enhanced services such as dedicated Internet access, wholesale dial and virtual private networks.
The biggest cost-savings of all came with the 90,000-mile toll free IP telephony call placed from space earlier this year. In February, Cisco installed a 10BaseT Ethernet Local Area Network on a space shuttle headed for a 10-day voyage. The network included an IBM laptop installed with Cisco SoftPhone software, a headset, and links to NASA's private satellite via an onboard Internet router. This IP telephony network enabled Astronaut Marsha S. Ivens to place the first-ever phone call from space to the lead flight director in NASA's Mission Control Center on February 10.
While cost-savings is key, an even bigger advantage of Voice-over-IP is the ability to add new, standardized features simply and quickly across an entire organization. As well as the ability to add new voice services, such as integrated calendaring and conferencing, voice recognition, directory-enabled services, find me capabilities, and Unified Messaging.
Probably the biggest communications headache people face today is the overload from these different messaging systems. Unified messaging uses an integrated interface to bring all those messaging systems together.
Unified messaging is just beginning to be deployed--but it's expected to see rapid adoption as it becomes fully available because it makes so much sense.
In fact, according to the market research firm Ovum, there will be more than 170 million unified messaging subscribers by the year 2006. And IDC estimates there will be some 16 million unified messaging users in the enterprise setting alone in the same time frame.
However, unified messaging is the first phase. What we're really after is an entire unified communications environment. One that not only allows you to examine your incoming messages but allows you to communicate and take action in a very sensible way--no matter where you might be.
Unified communications leverages all the communications possibilities created by the convergence of voice and data on a single IP-based network. Indeed, one day unified communications may well replace dial tone. That is, someday you'll be able to pick up the phone and be automatically connected to your unified mailbox from anywhere, whether it's Rio Grande or Rio de Janeiro. A sort of communications portal to the world.
Many of you probably travel with a laptop or some sort of e-mail capable organizer. But what happens when you're on the road and someone sends your office a fax after hours? There's no one at the office to forward it to you. For that matter, you may not even know that you have an important fax waiting for you.
Since a fax is already a bit map, and inherently digital, why shouldn't you just be able to access it?
This common problem is easily solved with unified messaging. Simply pick up a phone ... dial into your unified inbox... and you will be immediately notified of any important faxes, voice messages or e-mails.
Or, you can plug in your laptop, open your e-mail inbox and dial into the system. Simply open your e-mail inbox and you can view and manage all your messages. You can print, forward and save the fax and e-mail messages... and even listen to your voicemails. Or click on an e-mail message with the voicemail icon and the text will be read over your laptop speakers.
Web-based Unified Communications can help people be more productive and efficient with their time. In fact, a recent study by the research firm Cahners In-Stat found that using a single mailbox for voice and e-mail can save the typical professional 30 minutes a day.
Unified Messaging is clearly a technology that can make life more manageable. But what happens if you live in an apartment complex or you're staying in a hotel that doesn't provide high-speed Internet access?
This brings me to the second emerging technology I'd like to talk about, the wireless Internet.
Wireless Internet technology is a complex combination of IP packet-based networks and Radio Frequency transmission. While there are several categories of wireless Internet technology, the only one I'm going to address this morning is Wireless LANs.
The Wireless LAN market is expected to more than double in just three years, growing from $1.2 billion in 2000 to $2.7 billion in 2003. For "on the go" Internet access, Cisco is installing 802.11 local area network technology in airports and airline lounges, including both airports in Sao Paulo. In hotels, including in the Transamerica Sao Paulo, where this event is being held. And even in a number of Starbuck's coffee houses. Many companies are also using Wireless LANs on their corporate campuses. For example, Microsoft is using a Wireless LAN so employees can have instant access to the Internet wherever they may be on the corporate campus-whether it's a conference room, the cafeteria or the parking lot. Sage Research has found that employees using Wireless LANs are connected 1-3/4 more hours per day... which in turn enables the typical user to be as much as 22% more productive.
Most likely, productivity will be even greater as wireless technology evolves from products supporting the 802.11 standard in the 2.4 GHz band with 11 Mbps of capacity today... to solutions with 50 Mbps or more of capacity in the 5GHz band in the future.
Wireless LANs are an excellent solution to provide cost-effective, high-speed Internet access in hotels, multi-tenant buildings and airports.
However, let’s take a moment and talk about wiring. Many of these types of older structures typically have antiquated wiring. Completely rewiring an older building with fiber optics or cable can be prohibitively expensive. An ideal solution is a new broadband access technology called Long Reach Ethernet. This technology can boost the low-quality speed of existing wiring to between 5 and 15 Megabits per second for a reach of up to 4,000 feet.
It's one thing to talk about these exciting technologies; it's another to see them in action. So, at this point, I'd like to call a member of Cisco's Executive Demo Team, Dan Lieberman, up on stage to show us how the Wireless LAN technology and Long Reach Ethernet can work.
Wireless LANs and Long Reach Ethernet are very exciting and cost-effective technologies that can help service providers and businesses leap-frog legacy equipment and wiring... and bring modern high-speed broadband access to older buildings.
Another emerging technology area that makes a lot of sense for Brazil and Latin America is content networking, which Keith Fox demonstrated for you in yesterday’s keynote. Content networking has to do with the efficient delivery of Web content. With a content network, content is replicated at the "edge" of the network. This means content isn't consuming core bandwidth and clogging traffic at central network links and on servers. Ultimately, the network load is eased... and Internet users receive their content more quickly.
I assume we've all experienced the frustration of sitting in front of the computer, waiting endlessly for something to download... or receiving cryptic error messages. If that's what is happening today, imagine the headaches that lie ahead as Internet traffic doubles every 180 days and the global Internet population grows to nearly a billion users by 2005? The current model of users tapping into central sites one at a time simply won't work. It can't scale.
The best solution is localizing traffic, or enabling content requests to be fulfilled locally. This is achieved with content delivery networks.
Content delivery networks are comprised of five elements. First is the geographic distribution of the content-delivery nodes, which ideally are dispersed worldwide on multiple networks. Second is content replication, or the automatic replication of content on multiple content-delivery nodes. Third is caching. That is, the storing of content on the delivery nodes. The fourth element is redirection, or the process for redirecting content requests to the most efficient delivery nodes. A process that's determined by a number of factors, such as the proximity between the network sending the request and the network where the requested content resides and the network load status. And, finally, the fifth element is load balancing. Load balancing is the ability of the network to distribute traffic over available network ports. This increases the use of network segments, thus increasing effective network bandwidth.
Content Delivery Networks are an optimal solution for Internet communications between countries-say the United States and Brazil. Currently, if 1,000 Internet users in Sao Paulo hit a US web site, such as CNN News, then each request is fulfilled one by one. That's 2,000 intercontinental communications. Wouldn't it be much more efficient to have that US content cached locally in Sao Paulo... allowing each of those 1,000 requests originating in Brazil to be answered locally?
Efficient content distribution can improve Internet speed and lower operation costs-which is a big reason why content delivery networks are becoming popular with service providers.
For enterprises, content delivery networks enable schools, businesses, and government agencies to improve learning, communications and productivity by delivering rich media. Specifically, content delivery network applications include distance learning among remote student centers... delivery of CAD/CAM drawings, MRI files and other large images... and live and on-demand broadcasts, such as corporate events and annual meetings.
One of the most popular applications for content delivery networks is corporate training. In fact, Cisco uses e-learning to train its 38,000 employees around the globe -a practice that saves Cisco more than $1 million a year in training costs.
Optical networking is another high-growth opportunity because it can theoretically deliver more bandwidth than the world could ever use.
DWDM equipment acts as a capacity multiplier in adding more data channels to existing optical fibers. Not only are there now 160 new channels for information to travel across each optical fiber with DWDM, but technical advances are increasing the speed at which bits flow along those 160 channels. Up until recently, expensive equipment was required to convert optical signals to electrical signals so they could maintain their signal to noise ratio as they traveled long distances. New equipment eliminates the need for these optical-to-electrical conversions altogether.
DWDM technology has a number of benefits for enterprises. DWDM technology allows segmentation of optical wavelengths, enabling organizations to assign wavelengths to different connections, as opposed to its own fiber pair. And Metro DWDM can multiply, by a factor of 16 or 32, the traffic that can be transported across a single fiber pair. This means that throughput on a fiber pair, typically on the order of 2.5 to 10 gbps, can now be increased to between 76 gbps and 320 gbps.
Metro DWDM is uniquely matched to meet the high bandwidth, low latency requirements for storage-which brings me to the last technology market I'd like to discuss. Storage Networking
A recent U.C. Berkeley study estimates that the amount of data created on Earth will likely double for the foreseeable future. It has taken 300,000 years for humans to accumulate 12 exabytes, or billion gigabytes, of information. And it will take just 2.5 more years to create the next 12 exabytes.
So where do you put it? The answer is storage networking.
Over the past few years, two distinct approaches to storage networking have emerged based on different sets of technologies, protocols and standards. While they address different needs, both capture the essence of traditional storage and networking convergence.
The Network Attached Storage solution addresses workgroup, or PC-computing environments. PC data comes from workgroup applications, such as word processing, spread sheets, and specialized research databases such as genetic data or weather models. In this model, storage devices are directly attached to the enterprise's network, or servers.
Storage Area Networking, on the other hand, serves the needs of enterprises and large organizations. This encompasses bandwidth-intensive applications that support everyday business and operations needs such as Customer Relationship Management, supply chain management and transaction processing. It also encompasses externally networked storage needs driven by web page delivery, e-commerce, rich media-on-demand and cross-enterprise applications.
These storage networking technologies combined with the advances in networking and optical technology will yield lower costs, faster speeds and more storage space for enterprises and service providers. Continued technology trends in disk storage, where magnetic recording densities have been doubling approximately every 12 months for more than a decade, could lead to a price of a penny per megabyte, compared to 30 or 40 cents today. And, with the continued build-out of the optical network, which by some forecasts is expected to be at 20 billion miles of fiber by 2005, along with the improvements in routers and networking equipment, the bandwidth increase in the next five years could be nearly a million-fold.
Further, tying these storage networks to the Internet-which will be the next important wave in storage networking-will provide greater ubiquity and lower costs.
What's happening with storage and IP is symbolic of what's happening with many of the high-growth technologies we've discussed this morning. Optical is boosting capacity for the Internet. Long Reach Ethernet is bringing the benefits of wireless LANs to a wide new spectrum of users. Technologies are melding. And, together, they are going to bring us into a "new era" of Internet communications. One in which the Internet makes our lives easier and more manageable. Where you can get the information you want anytime, anywhere. And one in which enterprises and other organizations can be more efficient and productive -a benefit that will only continue to improve as optical, wireless and other new technologies become more widely deployed and help us overcome today's bandwidth limitations.
The Internet is truly changing the way we work, live, play and learn. And despite the challenges in today's economies, the Internet is growing at a rapid pace... and it's here to stay.
The only question is, "Are You Ready?"
OBTAINING PRODUCTIVITY FROM THE INTERNET
Cisco Systems Senior Vice President Howard Charney
As presented at Networkers Brazil
November 8, 2001
Bom Dia. I'm delighted to be here this morning to talk about the Internet. And, as you saw in the opening video, how the Internet is changing the way we work, live, play and learn.
Now, some might argue that the Internet bubble has burst. Capital spending by telecom companies has dropped five percent this year -and may decline as much as 20 percent in 2002. The same is true in worldwide spending on semiconductors, which is predicted to fall 26% this year. This is important for the viability of the Internet because, as Intel Chairman Andy Grove says, "the Internet runs on silicon."
However, it's important to keep these figures in perspective... and, as business leaders, to look to the future. While the semiconductor industry is down this year, it's expected to begin a slow recovery and grow about 13% in 2002. Worldwide investment in information technology continues to boom, growing from $1.1 trillion this year to an expected $1.44 trillion in 2004.
Although world economies are challenging today, the fact remains that the Internet continues to proliferate at a rapid pace. There are some 523 million Internet users worldwide today... with three-quarters of a billion predicted to be online in 2003. Latin America's online population is expected to soar, from 21 million last year to 77 million in 2005. And as the Internet becomes more pervasive, so do applications such as e-commerce. Trillions of dollars cross the Internet each year in the form of e-commerce. On-line sales around the world are predicted to grow from $635 billion today... to $1.9 trillion by 2003.
These numbers are even more noteworthy here in Brazil. According to a new report by eMarketer, Brazil will continue its dominance of the Internet in Latin America as its more than 10 million users represent 40% of the region's Internet users. E-commerce is expected to mushroom from $2.47 billion last year to $430 billion in 2003. And the growth will most likely be even greater when the government deregulates the telecom market next year.
As you can see, we're actually in the midst of a very exciting time in the evolution of the Internet. The Internet is becoming pervasive around the globe. And as the Internet becomes a more common tool for enterprises, governments and other organizations, we've been able to identify a very tangible benefit of the Internet. Productivity.
The link between the Internet and increased productivity is a topic of debate among economists around the world. However, I would side with the historical evidence that correlates the two.
In the United States, for example, if you look at productivity, or worker output per hour, over time, you can see a steady increase with two significant breaks-one in the mid-70s and one in the early 80s. There are several explanations for the blip in the 70s, including higher energy costs and lagging investment. The slowdown in the early 80s is a bigger mystery. As computers improved and became ubiquitous in the 1970s and 1980s, economists waited to see productivity rise. But it did not. In fact, MIT economist Robert Solow said, "We see the computer age everywhere except in the productivity statistics."
One popular explanation is that all the high-speed computers required greater interconnectivity before they could really boost the nations' productivity. And guess what happened when the Internet began to emerge in the 90s providing that missing link? Productivity went up.
The connectivity of the Internet paves the way for significant boosts in worker productivity. The Internet makes information available faster and cheaper-which means workers can make faster, better business decisions. The Internet also offers significant productivity gains in business-to-business commerce. For example, large companies like Ford Motor Company, Hallmark, Intel, Raytheon and Whirlpool are reducing inventories by more than 40% and lowering logistics costs by as much as 20% by moving their supply chains online.
There are a number of studies that substantiate the claim that productivity gains are linked to the Internet. The Federal Reserve Bank of New York claims that the industries that invested the most in information technology in the early 90s experienced the greatest productivity gains during the late 90s. And PriceWaterhouseCoopers reports that companies using the Web as part of their business in 2000 experienced 2.7 times higher productivity than those that did not.
So you're probably wondering, 'how can my organization reap these benefits?'
Obtaining productivity from the Internet can actually be accomplished in four stages.
The foundation of these stages is, of course, the Internet itself. And concurrent with the growing use of the Internet comes an application that has become such a standard communication tool, we take it for granted. I'm talking about e-mail. It's estimated that by 2005, 35 billion e-mails will cross the Internet every day.
And while it's the most rudimentary form of Internet communication, e-mail can make a significant contribution to productivity. In fact, e-mail in the workplace saves employers about $9,000 and more than 300 hours per employee each year, according to Ferris Research.
So e-mail utilization can be thought of as Stage Zero in obtaining increased productivity from the Internet. The "real" or modern stages are: Information ... Interaction ... Collaboration... and Transformation.
And there are three dimensions to these four stages. The first dimension is how many parties are communicating. That is, is it an exchange between one person and another... or are numerous parties involved? The second dimension is whether transactions occurred or not. With transaction, I mean some form of reciprocal activity such as the sale of a product or an exchange of ideas. And the third dimension is the richness of experience. Meaning, is it simple text... graphics... or the quality of a full-motion movie?
So let me walk you through this framework.
Stage one, Information, is using the Web to get information. It's one-to-many communication... as opposed to email, which is typically one-to-one. There is no transaction involved. And the richness of experience is basic, limited to text and color graphics-with some sites offering video for viewers with broadband access.
Stage 2, or Interaction, is defined by e-commerce, or using the Web to buy and sell things... and e-service: using the Web to deliver customer services.
In this stage, the interaction is similar to Stage One in that it takes place between one and many people. It's highly transactional. And like Stage One, the richness of experience is generally fairly low-with some sites offering colorful graphics and JPEG photos.
We talked earlier about the enormous growth of e-commerce. Let's take a minute and talk about e-service. Today, e-service generally means getting answers to questions and conducting transactions online. In the future, e-service will be even more compelling.
For example, how about integrating a business Web site and a customer service call center? And let's take that a step farther: let's combine the Web, telephony, and live video. Now, it actually has a name. It's called Web-enabled 'computer telephony integration.' Let me show you an imaginary example of how it might work using a non-technology product.
Say you see an ad on the Web for something that you're interested in, but you have a question. You click on the page and instantly you're in communication with a customer service representative who will help you. Let me show you how this works.
Actually, I'm shopping to get my nephew a birthday present. And, like most nine-year olds, he's a huge fan of Harry Potter. He's read all the books ... twice ... and he collects everything that has to do with Harry Potter and the Hogwarts School. And believe me, there's a lot to collect!
I do recall I bought him a couple of gifts before from this very Web site, but I can't remember exactly what it was I got for him. They probably have some records of what I already bought. So, I could write an e-mail message to this address and maybe they'd get back to me in a day or two. But I have a problem: his birthday is in two days. Which means I just can't wait!
Now, I could dial the toll-free number, but why push me away from this great design and interactivity to be on-hold listening to elevator music?
This takes e-service to a new level. It certainly beats driving to a store and waiting in line. When I click, she's right there ready to help me. I hardly have to explain myself. She has my purchasing history and my secure credit card information-which speeds the process along.
Unlike the earlier stages, Stage 3 establishes a basis for electronic collaboration because it's about many to many communications and transactions. Because it uses more sophisticated applications that tap into voice, video and data, the richness of experience can vary from medium to high.
Stage 3 applications can include instant messaging... virtual meetings and video conferencing... and digital design. For example, CATIA is an online design tool used to build planes... design golf clubs... and design cars. The collaborative software automates the entire engineering and manufacturing design phase. It not only lets workers "visualize" the vehicle being built in 3-D, but the Web-based software can also be used to simulate the plant, the processes, the tooling, even the people involved.
Another premier example of digital collaboration is e-learning. With e-learning, content is created in modules and delivered to students in various formats over the Web. Students can listen to live broadcasts or Videos on Demand, which are stored in a network library. They can participate in live, virtual classrooms. They can even "learn by doing" in virtual labs.
One of the most exciting aspects of Cisco's e-learning software is a tool called prescriptive learning. Prescriptive learning is to e-learning what an individual tutor is to lecture-based learning. It's the ability to adapt course content to the individual student's comprehension and learning level. Students are given online assessment tests. And, based on an individual's score, the system identifies areas of deficiency and prescribes the appropriate courses.
One of the amazing aspects of e-learning is that it can provide such a personal learning experience... even to students in the most remote parts of the world. For example, five Indians from the Arhuacas, Arzanias and Kogui tribes who lives in the Sierra Nevada de Santa Marta in Colombia are currently taking online courses to learn how to design, build and maintain computer networks. These men and women are coffee harvesters and live in a village with no electricity. They come down from the Sierra Nevada once a week to take courses online through the Cisco Networking Academy- a program that currently enrolls more than 20,000 Latin American students. The Colombian students communicate with their teachers and classmates by e-mail. And they hope to use their Internet expertise to help develop the community where they live.
Now let's move on to the fourth and final stage of obtaining productivity from the Internet. This stage is called Transformation.
Achieving Transformation is much like the Buddhist concept of reaching Nirvana - it's not easily done and, once you get there, you have to keep working to stay there. In the Internet world, getting to Transformation requires a high-speed IP network, which lets you use the Web in every imaginable aspect of your operations. Sales... customer service... employee benefits... the supply chain... and sharing information internally and externally. In Transformation, Web-based applications are integral to everything you do. It's many to many communications. It's highly transactional. And the richness of experience is very high. The communication is dynamic... smooth... and captures graphics, photos, videos, and live interactions.
An excellent example of a company that's being transformed by using the Internet is CEMEX, one of the largest cement companies in the world and headquartered in Monterey, Mexico. Working in the challenging and often unpredictable global construction industry, CEMEX wanted to find a new way of conducting business. One that provides flexibility and efficiency. And they're using the Internet to accomplish this goal. By integrating Web-based tools across its business, CEMEX has been able to reduce the standard three-hour ready-to-mix concrete delivery window to 20 minutes. They will save between six and eleven million dollars from e-procurement this year. By the end of 2001, CEMEX aims to have more than 50% of its platforms supported by the Internet. And they expect to see a 100% return on investment within three years of implementation.
It's important to point out that there's one practical reality for reaching the most advanced Internet state of Transformation. It requires massive bandwidth... and broadband connections. Connections that are orders of magnitude faster than dial.
Broadband deployment is increasing around the world-but not at a rate that will satisfy the world's insatiable appetite. The number of broadband subscribers worldwide will grow from 21 million this year to nearly 84 million by 2005-which is just a small percent of the hundreds of millions that are already online.
Bandwidth-intensive data traffic has already surpassed voice traffic on the public network. Businesses and consumers continue to push for high-speed data services, such as DSL, cable modem, audio and video Web casts, and Virtual Private Networks. This relentless increase in bandwidth demand is challenging traditional systems, such as circuit-based networks and even SONET and ATM networks.
The reason people are clamoring for more bandwidth is because it brings you into three-dimensional, "always on," real-time Internet communications. It opens up a new world of Internet applications that touch our everyday lives. For example, just two months ago, a doctor in New York used "telesurgery" to remove the gallbladder of a patient in Strasbourg, France. Using a fiber-optic broadband connection, a one-second transmission delay was reduced to less than 0.15 seconds on the 4,000-mile telecommunications link. The operation was complete in 45 minutes... and the patient has made a full recovery.
Another example is e-government -a very important initiative for Brazil. Today, a number of governments are making incredible strides. For example, 75% of Australians file their taxes online. Tens of millions of Brazilians voted electronically in the 2000 elections. In the Czech Republic, 80% of customs declarations are submitted electronically. In France, medium and large businesses are required to pay taxes online. These are very exciting accomplishments-but they're all in Stage 3. Broadband connections can bring e-government to the highest level, Stage 4. Citizens in rural areas could attend government meetings via Web casting. They could download training courses for a variety of government services-such as how to apply for a business license. As we saw earlier in the Harry Potter demo, government employees could provide real-time customer service to citizens no matter if they were home, at work, or traveling -as long as they had a broadband connection.
The call for bandwidth-intensive, rich Internet applications is what brings me to the final portion of my speech. For my remaining time, I'd like to share with you the areas where Cisco is focusing its future. We've identified 11 technology areas that are the future of networking. We've even organized our company around these areas because we believe they will provide the transport speeds, bandwidth capacity and network intelligence that's required for creating an Internet that's as accessible... as easy to use... and as high quality as flipping a light switch today.
These areas are remote access... aggregation... core routing... local Ethernet access... IOS software... ... Internet switching and services... network-management services... optical... storage... voice-over-IP... and wireless.
Let me take a look at a few of these technologies that have particular relevance for Brazil and the rest of Latin America.
First, let's talk about Voice-over-IP. Just a few years ago, people laughed when companies like Cisco were talking about transmitting high-quality voice calls over the Internet... instead of a traditional circuit switched infrastructure.
In just a few short years, a revolution is building. Individuals spent 200 million minutes using IP telephony in 1998. 2.5 billion minutes in 1999. And the number is predicted to jump to 635 billion minutes by 2006.
A Voice-over-IP network carries voice calls at a lower cost than a switched circuit telephone network because IP telephony networks make better use of available bandwidth. In a circuit-switched network, a dedicated 64 kilobits-per-second end-to-end circuit is used for every call. In a packet Voice-over-IP environment, many more voice calls can be transmitted for the same amount of bandwidth space-which results in lower costs. These cost-savings can be significant. Cisco estimates that a company of 1,000 people can realize a 136% return on investment over three years with IP telephony.
The cost-savings are also significant for service providers. In Mexico, for instance,
I-Next, the data division of Operadora Protel, has recently expanded its packet voice IP services to six cities in Mexico and is currently carrying approximately 5 million minutes of voice traffic monthly. They now intend to expand to 35 cities in the next six to 12 months. I-Next originally installed a Voice-over-IP network to reduce long-distance costs. And within the first two months of turning up service, they achieved cost savings of $145,000 each month. Now they're also using the IP telephony network to offer customers enhanced services such as dedicated Internet access, wholesale dial and virtual private networks.
The biggest cost-savings of all came with the 90,000-mile toll free IP telephony call placed from space earlier this year. In February, Cisco installed a 10BaseT Ethernet Local Area Network on a space shuttle headed for a 10-day voyage. The network included an IBM laptop installed with Cisco SoftPhone software, a headset, and links to NASA's private satellite via an onboard Internet router. This IP telephony network enabled Astronaut Marsha S. Ivens to place the first-ever phone call from space to the lead flight director in NASA's Mission Control Center on February 10.
While cost-savings is key, an even bigger advantage of Voice-over-IP is the ability to add new, standardized features simply and quickly across an entire organization. As well as the ability to add new voice services, such as integrated calendaring and conferencing, voice recognition, directory-enabled services, find me capabilities, and Unified Messaging.
Probably the biggest communications headache people face today is the overload from these different messaging systems. Unified messaging uses an integrated interface to bring all those messaging systems together.
Unified messaging is just beginning to be deployed--but it's expected to see rapid adoption as it becomes fully available because it makes so much sense.
In fact, according to the market research firm Ovum, there will be more than 170 million unified messaging subscribers by the year 2006. And IDC estimates there will be some 16 million unified messaging users in the enterprise setting alone in the same time frame.
However, unified messaging is the first phase. What we're really after is an entire unified communications environment. One that not only allows you to examine your incoming messages but allows you to communicate and take action in a very sensible way--no matter where you might be.
Unified communications leverages all the communications possibilities created by the convergence of voice and data on a single IP-based network. Indeed, one day unified communications may well replace dial tone. That is, someday you'll be able to pick up the phone and be automatically connected to your unified mailbox from anywhere, whether it's Rio Grande or Rio de Janeiro. A sort of communications portal to the world.
Many of you probably travel with a laptop or some sort of e-mail capable organizer. But what happens when you're on the road and someone sends your office a fax after hours? There's no one at the office to forward it to you. For that matter, you may not even know that you have an important fax waiting for you.
Since a fax is already a bit map, and inherently digital, why shouldn't you just be able to access it?
This common problem is easily solved with unified messaging. Simply pick up a phone ... dial into your unified inbox... and you will be immediately notified of any important faxes, voice messages or e-mails.
Or, you can plug in your laptop, open your e-mail inbox and dial into the system. Simply open your e-mail inbox and you can view and manage all your messages. You can print, forward and save the fax and e-mail messages... and even listen to your voicemails. Or click on an e-mail message with the voicemail icon and the text will be read over your laptop speakers.
Web-based Unified Communications can help people be more productive and efficient with their time. In fact, a recent study by the research firm Cahners In-Stat found that using a single mailbox for voice and e-mail can save the typical professional 30 minutes a day.
Unified Messaging is clearly a technology that can make life more manageable. But what happens if you live in an apartment complex or you're staying in a hotel that doesn't provide high-speed Internet access?
This brings me to the second emerging technology I'd like to talk about, the wireless Internet.
Wireless Internet technology is a complex combination of IP packet-based networks and Radio Frequency transmission. While there are several categories of wireless Internet technology, the only one I'm going to address this morning is Wireless LANs.
The Wireless LAN market is expected to more than double in just three years, growing from $1.2 billion in 2000 to $2.7 billion in 2003. For "on the go" Internet access, Cisco is installing 802.11 local area network technology in airports and airline lounges, including both airports in Sao Paulo. In hotels, including in the Transamerica Sao Paulo, where this event is being held. And even in a number of Starbuck's coffee houses. Many companies are also using Wireless LANs on their corporate campuses. For example, Microsoft is using a Wireless LAN so employees can have instant access to the Internet wherever they may be on the corporate campus-whether it's a conference room, the cafeteria or the parking lot. Sage Research has found that employees using Wireless LANs are connected 1-3/4 more hours per day... which in turn enables the typical user to be as much as 22% more productive.
Most likely, productivity will be even greater as wireless technology evolves from products supporting the 802.11 standard in the 2.4 GHz band with 11 Mbps of capacity today... to solutions with 50 Mbps or more of capacity in the 5GHz band in the future.
Wireless LANs are an excellent solution to provide cost-effective, high-speed Internet access in hotels, multi-tenant buildings and airports.
However, let’s take a moment and talk about wiring. Many of these types of older structures typically have antiquated wiring. Completely rewiring an older building with fiber optics or cable can be prohibitively expensive. An ideal solution is a new broadband access technology called Long Reach Ethernet. This technology can boost the low-quality speed of existing wiring to between 5 and 15 Megabits per second for a reach of up to 4,000 feet.
It's one thing to talk about these exciting technologies; it's another to see them in action. So, at this point, I'd like to call a member of Cisco's Executive Demo Team, Dan Lieberman, up on stage to show us how the Wireless LAN technology and Long Reach Ethernet can work.
Wireless LANs and Long Reach Ethernet are very exciting and cost-effective technologies that can help service providers and businesses leap-frog legacy equipment and wiring... and bring modern high-speed broadband access to older buildings.
Another emerging technology area that makes a lot of sense for Brazil and Latin America is content networking, which Keith Fox demonstrated for you in yesterday’s keynote. Content networking has to do with the efficient delivery of Web content. With a content network, content is replicated at the "edge" of the network. This means content isn't consuming core bandwidth and clogging traffic at central network links and on servers. Ultimately, the network load is eased... and Internet users receive their content more quickly.
I assume we've all experienced the frustration of sitting in front of the computer, waiting endlessly for something to download... or receiving cryptic error messages. If that's what is happening today, imagine the headaches that lie ahead as Internet traffic doubles every 180 days and the global Internet population grows to nearly a billion users by 2005? The current model of users tapping into central sites one at a time simply won't work. It can't scale.
The best solution is localizing traffic, or enabling content requests to be fulfilled locally. This is achieved with content delivery networks.
Content delivery networks are comprised of five elements. First is the geographic distribution of the content-delivery nodes, which ideally are dispersed worldwide on multiple networks. Second is content replication, or the automatic replication of content on multiple content-delivery nodes. Third is caching. That is, the storing of content on the delivery nodes. The fourth element is redirection, or the process for redirecting content requests to the most efficient delivery nodes. A process that's determined by a number of factors, such as the proximity between the network sending the request and the network where the requested content resides and the network load status. And, finally, the fifth element is load balancing. Load balancing is the ability of the network to distribute traffic over available network ports. This increases the use of network segments, thus increasing effective network bandwidth.
Content Delivery Networks are an optimal solution for Internet communications between countries-say the United States and Brazil. Currently, if 1,000 Internet users in Sao Paulo hit a US web site, such as CNN News, then each request is fulfilled one by one. That's 2,000 intercontinental communications. Wouldn't it be much more efficient to have that US content cached locally in Sao Paulo... allowing each of those 1,000 requests originating in Brazil to be answered locally?
Efficient content distribution can improve Internet speed and lower operation costs-which is a big reason why content delivery networks are becoming popular with service providers.
For enterprises, content delivery networks enable schools, businesses, and government agencies to improve learning, communications and productivity by delivering rich media. Specifically, content delivery network applications include distance learning among remote student centers... delivery of CAD/CAM drawings, MRI files and other large images... and live and on-demand broadcasts, such as corporate events and annual meetings.
One of the most popular applications for content delivery networks is corporate training. In fact, Cisco uses e-learning to train its 38,000 employees around the globe -a practice that saves Cisco more than $1 million a year in training costs.
Optical networking is another high-growth opportunity because it can theoretically deliver more bandwidth than the world could ever use.
DWDM equipment acts as a capacity multiplier in adding more data channels to existing optical fibers. Not only are there now 160 new channels for information to travel across each optical fiber with DWDM, but technical advances are increasing the speed at which bits flow along those 160 channels. Up until recently, expensive equipment was required to convert optical signals to electrical signals so they could maintain their signal to noise ratio as they traveled long distances. New equipment eliminates the need for these optical-to-electrical conversions altogether.
DWDM technology has a number of benefits for enterprises. DWDM technology allows segmentation of optical wavelengths, enabling organizations to assign wavelengths to different connections, as opposed to its own fiber pair. And Metro DWDM can multiply, by a factor of 16 or 32, the traffic that can be transported across a single fiber pair. This means that throughput on a fiber pair, typically on the order of 2.5 to 10 gbps, can now be increased to between 76 gbps and 320 gbps.
Metro DWDM is uniquely matched to meet the high bandwidth, low latency requirements for storage-which brings me to the last technology market I'd like to discuss. Storage Networking
A recent U.C. Berkeley study estimates that the amount of data created on Earth will likely double for the foreseeable future. It has taken 300,000 years for humans to accumulate 12 exabytes, or billion gigabytes, of information. And it will take just 2.5 more years to create the next 12 exabytes.
So where do you put it? The answer is storage networking.
Over the past few years, two distinct approaches to storage networking have emerged based on different sets of technologies, protocols and standards. While they address different needs, both capture the essence of traditional storage and networking convergence.
The Network Attached Storage solution addresses workgroup, or PC-computing environments. PC data comes from workgroup applications, such as word processing, spread sheets, and specialized research databases such as genetic data or weather models. In this model, storage devices are directly attached to the enterprise's network, or servers.
Storage Area Networking, on the other hand, serves the needs of enterprises and large organizations. This encompasses bandwidth-intensive applications that support everyday business and operations needs such as Customer Relationship Management, supply chain management and transaction processing. It also encompasses externally networked storage needs driven by web page delivery, e-commerce, rich media-on-demand and cross-enterprise applications.
These storage networking technologies combined with the advances in networking and optical technology will yield lower costs, faster speeds and more storage space for enterprises and service providers. Continued technology trends in disk storage, where magnetic recording densities have been doubling approximately every 12 months for more than a decade, could lead to a price of a penny per megabyte, compared to 30 or 40 cents today. And, with the continued build-out of the optical network, which by some forecasts is expected to be at 20 billion miles of fiber by 2005, along with the improvements in routers and networking equipment, the bandwidth increase in the next five years could be nearly a million-fold.
Further, tying these storage networks to the Internet-which will be the next important wave in storage networking-will provide greater ubiquity and lower costs.
What's happening with storage and IP is symbolic of what's happening with many of the high-growth technologies we've discussed this morning. Optical is boosting capacity for the Internet. Long Reach Ethernet is bringing the benefits of wireless LANs to a wide new spectrum of users. Technologies are melding. And, together, they are going to bring us into a "new era" of Internet communications. One in which the Internet makes our lives easier and more manageable. Where you can get the information you want anytime, anywhere. And one in which enterprises and other organizations can be more efficient and productive -a benefit that will only continue to improve as optical, wireless and other new technologies become more widely deployed and help us overcome today's bandwidth limitations.
The Internet is truly changing the way we work, live, play and learn. And despite the challenges in today's economies, the Internet is growing at a rapid pace... and it's here to stay.
The only question is, "Are You Ready?"
Todas las marcas y logotipos que aparecen en este sitio pertenecen a sus legítimos propietarios.
El resto,© 2002-2006 Antonio Cortés (Dr Zippie antonio#antoniocortes.com ) .