Chambers: E-commerce to explode

LAS VEGAS -- The growing impact of information technology has pushed high-tech spending to 43 percent of all capital spending in the U.S., Cisco Systems Inc. President and CEO John Chambers said.

Hear Chambers on the surge in capital spending for the high-tech industry.

In his Comdex keynote Tuesday, Chambers said electronic online commerce will grow faster than most pundits suggest. The actual market in 2001 could be five times the current projections of $300 billion for that year.

Proper and timely use of the Internet will be key for businesses as they move forward, Chambers said.

A good example is Cisco, which claims a 10 percent yearly increase in profit and a 50 percent increase in productivity by using Internet technology inside the company. Chambers said good networks determine how quickly companies can get products to market and employees can get information.

"We all have the same challenge -- large and small companies are organized improperly and need to remove the layers and empower their workforce. Companies that know how to do this will move ahead. Employees without information will make dumb decisions."

Chambers also claimed $250 million in savings by selling products online, freeing his sales force, partners, and support staff to work with customers.

He predicted the Internet would drive a plethora of new business applications. For example, he said, businesses could provide one-stop financial information that include insurance and stock advice.

By the year 2000, he said, 25 percent of small businesses and 50 percent of medium-sized businesses will be online.

Chambers talks about how partnerships will fuel the Internet.

He compared the Internet to the industrial revolution, which determined which economies took off, where people migrated, and which skills were important.

He also called on business to demand improvements in U.S. education. "Business must lead the way and say that the way our young people are being treated is unacceptable.

"We need to push testing and compare results from state to state and country to country. All students should have choice, not just those that can afford it. We must also reward education for results. Otherwise, our businesses will move to other countries."