Video Changes Everything Guido Jouret VP, Chief Technology Officer Emerging Technologies Group T

Total Video Strategy Vision / Strategy / Execution Strategy Vision Execution T Differentiator Play to Win Platform + Solutions optimized to simplify creation, sharing & use of video Value Proposition “ In Person” Experiences Breakthrough communication, collaboration and entertainment Video Systems End-to-End Provider of products, services, & ecosystem Revenue / Share

Agenda Vision Strategy Execution “In Person” Experiences Play to Win Platform + Solutions Existing Business: Current Trajectory and Accelerators Collaboration Areas Between Enterprise, SP, Consumer Additional Opportunities To Increase Share, Momentum, and Pull-through Accelerate Better Together Big Bets T

Vision “ In Person” Experiences M

Video Changes… Everything M Communication and Collaboration Interactive High- Definition Social Networking On-Demand 3D Entertainment Education Healthcare

IP Traffic Will Quintuple from 2006 to 2011… Source: Cisco Global IP Traffic Forecast, 2007 37% CAGR 2006-2011 Business Internet Business IP WAN Consumer Internet Consumer IPTV/CATV 1 Exabyte = 1,000,000,000,000,000,000 Bytes M

…Fueled by Video 1995: Web Overtakes Gopher, FTP 2000: Peer-to-peer Overtakes Web 2013: Video Content Overtakes Peer-to-Peer 2025: Video Communication Overtakes Video Content Source: Cisco Global IP Traffic Forecast, 2007 1995–2000 2000–2013 2013–2025 1993–1995 2025+ M Gopher, FTP WWW P2P Video Content Video Communication Dominant Traffic Type

1995: Web Overtakes Gopher, FTP

2000: Peer-to-peer Overtakes Web

2013: Video Content Overtakes Peer-to-Peer

2025: Video Communication Overtakes Video Content

The Internet Needs to Evolve 1985–1995 1995–2005 2005+ Technology Shift Business Value Social Value Technology Platform LANs Digital Automation Efficiency Internet Web 1.0 Transactions Personalization Web 2.0 Collaboration Participation ??? M Medianet

To Become Medianet © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential Future Now M Internet Becomes Universal Broadcast Medium Real-time Traffic Dominates Internet “Video Enabled” New Experiences Medianet

Strategy Play to Win T

Today’s Reality Complexity Interactivity Capacity n-display problem Too many formats Delivering new experiences Hard to find and share video Video is real-time, interactive and bursty Increased customer expectations Video storage Bandwidth Experience Fragmented solutions Hard to use User is control-plane T

n-display problem

Too many formats

Delivering new experiences

Hard to find and share video

Video is real-time, interactive and bursty

Increased customer expectations

Video storage

Bandwidth

Fragmented solutions

Hard to use

User is control-plane

Need: Platform + Solutions Solutions Accelerate platform adoption Create new end user experiences Generate new revenue opportunities Medianet MediaNet: Network as the Platform Enables and accelerates new video experiences Creates compelling end-to-end benefits Creates viable ecosystem Ecosystem T + +

Solutions

Accelerate platform adoption

Create new end user experiences

Generate new revenue opportunities

MediaNet: Network as the Platform

Enables and accelerates new video experiences

Creates compelling end-to-end benefits

Creates viable ecosystem

Our Strategy and Differentiation Pain Point Video Strategy/ Enabler Differentiates Perform ‘Video Processing’ and embrace the ‘IP for video’ (H264 SVC) Video Enable the Network Evolve routers and switches to support Medianet architecture Virtualize Content Device + Network integration Vertically integrated solutions Proprietary formats Over-the-Top Providers Content Aggregators Storage Providers Over-the-Top Providers Network Commoditization Interactivity Capacity Complexity Experience In person experiences Simplicity and usability Point solutions Complex integration T

Vertically integrated solutions

Proprietary formats

Over-the-Top Providers

Content Aggregators

Storage Providers

Over-the-Top Providers

Network Commoditization

Point solutions

Complex integration

Many Video Markets… Over $50 Billion by 2013 Sources: MRG, Infonetics, Wainhouse, Frost & Sullivan, IDC, IMC, ABI Research, Instat, Cisco Estimates TAM $B Consumer SP Business Set Top Box Video Surveillance IPTV and Video Infrastructure TelePresence and Video Communication Desktop Video and Digital Signage Content Storage and Services Video Enabled Home M 0 2 4 6 8 10 12 14 3–5x Pull Through

Execution Big Bets T

Re-invent Communication and Collaboration Silo’d Offerings Impersonal Experience Difficult to Record, Find, & Share Limited Scalability: Few-to-Few Enable Any-to-Any Communication & Collaboration Video-Enable UC, WebEx Public TelePresence Enterprise TV Recording Multimedia Search Issues Opportunities M Medianet Smartphone Desktop Video Web Collaboration

Silo’d Offerings

Impersonal Experience

Difficult to Record, Find, & Share

Limited Scalability: Few-to-Few

Enable Any-to-Any Communication & Collaboration

Video-Enable UC, WebEx

Public TelePresence

Enterprise TV

Recording

Multimedia Search

Re-invent Communication & Collaboration Video-enabled Solutions Now Future Experience $500M opportunity over 5 Years (at 18% share by 2013) M HD + Web UC HD PC Video Comms TelePresence Holodeck Videophone PC TelePresence 3D Haptics Mobile Mobile HD HD + Web UC HD 3D Media Processing Any-to-Any

Medianet Today’s Internet Won’t Cope Video Solutions Require Common Infrastructure Services Point Solution Providers Can’t Solve this Problem Endpoint-Aware Media-Aware Network Optimizes User Experience Multicast, Media Control Plane, Call-Admission Control, Security, All Built-In Issues Opportunities *Nemertes Research: The Internet Singularity Delayed, 2007 T 60-70% Shortage in Capacity in Core Internet Infrastructure by 2010*

Today’s Internet Won’t Cope

Video Solutions Require Common Infrastructure Services

Point Solution Providers Can’t Solve this Problem

Endpoint-Aware

Media-Aware

Network Optimizes User Experience

Multicast, Media Control Plane, Call-Admission Control, Security, All Built-In

Medianet Next-generation Routers, Switches, Middleware Medianet Increase Revenue Enable Video Solutions Improve User Experience Increase Share Medianet Router Medianet Switch Medianet Gateway Medianet Services T $1.2B opportunity over 5 Years (+4% CAGR)

Create Compelling Opportunity to Renovate Installed Base *Cisco estimate T New Video Solutions $130B+ Cisco Routing and Switching Installed Base* Accelerate Churn Increase Market Share

Video Strategy New Existing Product Existing New Markets Accelerate (New Growth) Medianet (Upgrades) Phys. Security TelePresence New Video Markets Exchange Next Gen Switches and Routers Reinvent Communication Collaboration Foundation + ATs Digital Media Big Bets (New Business)

Current Emerging Technologies Cisco TelePresence Virtual Business Meetings Physical Security Video Surveillance, Access Control, Communication and Interoperability Digital Media Systems Digital Signage and Desktop Video

Cisco TelePresence Complete Solutions Cisco Product Solution Services Planning and design Operate services Network Business to Business Software Scheduling Automated call launch Video concierge High Definition Video Switch Multi-point Endpoints Group and executive

Planning and design

Operate services

Business to Business

Scheduling

Automated call launch

Video concierge

Multi-point

Group and executive

TelePresence Public TelePresence CTS-3000, CTS-1000, CTS-Manager Broadened Product Suite Inter-Company TelePresence Multipoint TelePresence Multiplying the use case through inter-company TelePresence: exponential deals Product Suite: Larger rooms, smaller rooms, more new features As simple as a phone call, completely secure, multiple methods for customer needs Scale and Growth

Multiplying the use case through inter-company TelePresence: exponential deals

Product Suite: Larger rooms, smaller rooms, more new features

As simple as a phone call, completely secure, multiple methods for customer needs

Cisco TelePresence – Multi-Experience Business to Business Bangalore San Jose Business Meeting Kiosk Company Meeting

Cisco Digital Media Systems Today: Desktop Video and Digital Signage Near term: Enterprise TV channel streaming and business video integration with Cisco TelePresence, video surveillance, unified communications, etc. Long term: Additional applications, user generated video, mobile devices Video Collaboration Training and Corporate Events Integrated Video Playback Playback External Content Advertising and Safety Business Applications and Usage

Today: Desktop Video and Digital Signage

Near term: Enterprise TV channel streaming and business video integration with Cisco TelePresence, video surveillance, unified communications, etc.

Long term: Additional applications, user generated video, mobile devices

Cisco Digital Media System: Digital Signage and Desktop Video Comprehensive : One solution for desktop video and digital signage Scalable : To many thousands of users and signs Centralized : Web-based content management Integrated : With underlying network for optimal content delivery Comprehensive Solution for Creation, Management, and Access of Compelling Digital Media

Comprehensive : One solution for desktop video and digital signage

Scalable : To many thousands of users and signs

Centralized : Web-based content management

Integrated : With underlying network for optimal content delivery

Cisco Physical Security Today: Separate networks, Digital CCTV, Access, VCR to DVR Near Term: Hybrid to IP Video, DVRs to NVRs, Common IP Network Infrastructure Convergence Long Term: Sensor integration, Application Middleware, Intelligent Point of Sale, Networked Border Security Services New Services Hybrid and IP Video Surveillance and Monitoring Network/Application Convergence Open APIs, Integrated Security Mgr VS on ISR, HD Video, Access Control Applications and Platforms To do Business Process

Today: Separate networks, Digital CCTV, Access, VCR to DVR

Near Term: Hybrid to IP Video, DVRs to NVRs, Common IP Network Infrastructure Convergence

Long Term: Sensor integration, Application Middleware, Intelligent Point of Sale, Networked Border Security Services

Cisco Physical Security: Digital Video for Security Technology advances make digital video a reality Networking growth Storage costs declining Improved CMOS/CCD resolutions Video compression technologies Newly enabled technologies Facial recognition Video analytics Object classifications License plate recognition

Technology advances make digital video a reality

Networking growth

Storage costs declining

Improved CMOS/CCD resolutions

Video compression technologies

Newly enabled technologies

Facial recognition

Video analytics

Object classifications

License plate recognition

Enhancing the Network and Video Experience TRANSCODE ENCRYPT STREAM AD INSERTION ENHANCE QOS TRANSRATE PROTECT TRANSLATE MULTICAST COMPRESS INTELLIGENT VIDEO NETWORK NETWORK AS THE PLATFORM

H264 SVC transmission: Network optimizations Full resolution Multiple layers Many displays Multiple streams Upstream Congestion Management TB

Video-enable the network Many streams = 1 session Metadata as video control plane Intserv for QOS and bandwidth reservation Active speaker on line 1 Active speaker on line 2 Transcript: “Thanks for a great meeting” Impact Routers and video gateways enabled to optimize video transmission and playback Metadata enables application-level experience optimization and search TB

Many streams = 1 session

Metadata as video control plane

Intserv for QOS and bandwidth reservation

Impact

Routers and video gateways enabled to optimize video transmission and playback

Metadata enables application-level experience optimization and search

Content Virtualization Global namespace Content migrates to optimize playback P2P + CDN delivery mechanisms for streaming & prepositioning Metadata stored with video content (automatic indexing for search)

Global namespace

Content migrates to optimize playback

P2P + CDN delivery mechanisms for streaming & prepositioning

Metadata stored with video content (automatic indexing for search)