Cisco predicts Web boom

Estimates of the amount of business that will be done on the internet have been very conservative and could surpass $1,500 billion by the year 2002.

Speaking at Gartner Group's annual US Symposium before an audience of 10,000 IT managers, vendors and analysts, John Chambers, chief executive of Cisco, said the potential savings to be made by companies would force the pace.

He claimed Cisco had saved $500 million last year through its Web applications.

'By 2002, the estimates of $200 billion to $300 billion of e-commerce business will be probably off by five to ten-fold and the majority share will have swung from business-to-business to business-to-consumer,' Chambers added.

Gartner estimated business-to-consumer e-commerce will not be more than 50 per cent of the total market until 2004.

Chambers revealed that Cisco was working with Microsoft on technology to improve voice-over IP but would not give details.

Joseph Baylock, director of research at Gartner, pointed out that some Cisco products had a price premium in the market of as much as 25 per cent higher than competitors.

Chambers responded: 'We are seeing some very aggressive pricing in the LAN switching market, for example, of as much as 60 to 70 per cent discounts and we won't do it. It is only a short-term strategy because you can't make money at that price level, which means these firms are not investing in R&D.'