Las Vegas Sun

March 29, 2024

Tech industry focusing on customers, justifying costs

Amid a weak economy, customers are running the show.

That was the word from technology industry heavyweights speaking Tuesday during the NetWorld+Interop event at the Las Vegas Convention Center.

"This industry is customer driven," said John Chambers, president and CEO of Cisco Systems Inc. "The major mistakes Cisco has made have happened when we lost sight of that."

In an effort to prevent future mistakes, Cisco has turned its attention to helping its customers increase their productivity. Chambers said productivity will ultimately drive an national economic rebound and a related rebound in the technology industry.

In his own speech to the NetWorld+Interop crowd, Sanjay Kumar, chairman and chief executive of Computer Associates, said technology companies have something to prove to their customers before such a rebound will take root.

"Customers want a good product and a fair value," he said. "We need to match not only the needs (customers) have today but be able to help manage their future needs. Companies need to step up. It's more than just making a sale and moving on."

Kumar and Chambers both proposed new innovations that would increase the productivity of both the work force and technology systems in an effort to produce greater benefits for customers amid a weak economy.

Cisco, Chambers said, has shifted the majority of its resources to developing "intelligent information networks" that are tailored to specific industries. With that move, the company has made inroads into new industries, including government and construction.

Chambers said the current trend in tailoring systems to underserved industries marks the ninth such directional change for Cisco in 15 years.

"Companies that don't do this are going to be left behind," he said.

Kumar said Computer Associates is focusing on systems that will cut down management time.

"We're looking for greater efficiencies in automating day-to-day issues," he said. "We need to let the IT staff manage the large issues."

Michael Marriott, executive vice president of the Las Vegas-based consulting firm IT Strategies, said such moves could answer the pleas of customers.

"There's a whole issue now of cost justification in technology," he said. "They want to utilize all of the technology they bought and implemented over the last four or five years. They also want to utilize it effectively."

In his speech, Kumar agreed.

"Many customers loath the idea of a large IT investment not only because of downward budget pressure, but because the purchases they made in the past did not deliver on their promises," he said.

Technology customers can't afford hollow promises these days, said Frank Yoder, president of Las Vegas-based Advanced Information Systems, a custom software company.

"There's been a lot of belt-tightening over the last two years," Yoder said. "We have to regroup as an industry. We're saying 'If you're not going to spend a lot of dollars, those that you do spend, let me help you spend them wisely."

Ultimately, the bottom line will decide the technology industry's winners and losers.

"If you don't prove yourself with that return on investment, you're not going to make it," Yoder said.

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