THE FRIDAY INTERVIEW - Barry O'Sullivan, senior vice president, Cisco:MORE THAN 8,000km of land and sea separate rural Galway and San Jose in the heart of Silicon Valley. Furbo, gateway to the Connemara Gaeltacht, is a long way from San Jose economically and socially, but one senior executive of US tech firm Cisco bridges that gap every day thanks to his own firm's video-conferencing technology.
Barry O’Sullivan is senior vice-president of Cisco’s voice technology group, a unit of 2,000 people which turned around over $2 billion (€1.4 billion) last year.
A Cork man, he has 25 years’ experience in the technology industry – first with Nortel Networks in Galway and subsequently in postings around the globe with the Canadian firm, including a seven-year stint in Silicon Valley.
Having joined Cisco in 2002, he made the decision last summer to move back to Galway from Palo Alto. Although O’Sullivan cites family reasons for the move – his wife, who he worked with at Nortel, is a Galway woman – Cisco has a research and development facility in Galway, which was established in 2006 following a long courtship by IDA Ireland. It now employs 130 people.
“We are very pleased with the progress and the calibre of people we have been able to get in,” says O’Sullivan. “One of the advantages we have in Ireland is a group of seasoned technical managers who have grown up in the industry. It’s easy to build a team of people around them.”
This is in contrast to emerging economies which have lots of graduates and very few experienced managers, he adds.
He can’t speak highly enough of the support received from IDA Ireland, even down to “behind the scenes” work on restoring Aer Lingus’s direct Shannon-Heathrow flights, the lack of which was a major headache for Cisco.
Despite concerns over the cost of doing business in Ireland, O’Sullivan says the Irish RD centre is about half the cost of a similar facility in the US – though the figures have changed somewhat due to recent currency fluctuations and the contribution of IDA employment grants.
He plays down the Obama administration’s recent moves to clamp down on US firms reducing their tax bills through the use of overseas subsidiaries.
“Being honest, for us, tax was not a consideration at all,” says O’Sullivan. “It was mainly about the availability of skills in the right time zone and at the right cost. We are doing real work here for a global market.”
Although documents circulated at a White House briefing on the matter singled out Ireland, along with Bermuda and the Netherlands, O’Sullivan says Ireland’s currency is still strong in Silicon Valley. “It is regarded as the technology hub for Europe, and it is not regarded in general in Silicon Valley as a tax haven,” says O’Sullivan. “I don’t think people even think about it.”
Although the Galway centre – which develops software, ensures Cisco products interoperate with Microsoft’s and is researching how social networking can be used in a business context – is on his doorstep, O’Sullivan spends most of his working week in his home office. Thanks to Údarás na Gaeltachta’s deal with Airspeed Telecom to deliver wireless broadband in his area, he is able to use Cisco’s high-definition TelePresence conferencing suite to stay in touch with his team which is strung out around the world, primarily in the US, Ireland, India and China.
Although Cisco is happy enough that one of its top men is based on Ireland’s western seaboard, O’Sullivan says the availability and quality of high-speed broadband in rural Ireland is an issue.
“It’s a significant problem and an area where quality is more important than quantity,” says O’Sullivan, before questioning the merits of the Government’s national broadband scheme based on a third-generation mobile platform. “ It’s all very well putting 3G everywhere, but if all you can do over 3G is browse the web then that’s not enough. We’ve gone for reach and getting some level of service to everybody.”
While O’Sullivan’s direct reports are mostly on the technical side – product managers, engineers, etc. – with selling handled by regional sales teams, he has responsibility for the unit’s profit-and-loss account. As a result, he spends about a third of his time on the road, and much of that is in front of customers, trying to get a feel for where they see the economy going, what is influencing their purchases, and what they are looking for technology to do for them.
When he meets The Irish Times, O’Sullivan is holding court in a private room in the Residence members’ club on St Stephen’s Green, Dublin, where he has been meeting with a selection of Cisco’s Irish customers. “That helps me make the decisions about where we should be investing our RD money,” says O’Sullivan. “I couldn’t do the job without that because otherwise you would be stuck in an ivory tower.”
He says it is one of the things “drilled into you” at Cisco; to consider what the customer would do at all times. Although the world is in the grip of recession, executives on this side of the Atlantic seem to have a more gloomy outlook than their US counterparts.
“When I come back here, the glass is always half empty. I feel like I should pour a bit in,” he laughs. “That’s just a cultural thing – we get too excited on the way up and too depressed on the way down.”
In common with many commentators, O’Sullivan believes the worst is past for the US economy, but is not getting carried away by the first signs of recovery.
“For the first time we feel we have a bit of a foundation beneath us,” he says, referring to Cisco’s recent performance.
“During our most recent quarter things didn’t deteriorate during the quarter, and we feel there is some firm ground there. Things aren’t getting worse and that usually happens before things get better, but who knows what’s going to happen.”
Perversely, O’Sullivan’s division seems to be benefiting from the recession. Customers are making investments to reduce costs and technologies such as video-conferencing enable them to save on travel by holding meetings virtually. Cisco now holds over 4,700 TelePresence meetings a week and reduced its annual travel bill from $750 million to $350 million in a single year by practising what it preaches.
Revenues from TelePresence are up 170 per cent year-on-year, says O’Sullivan, while Cisco is number one in the market for telephony systems based on voice over internet protocol (VoIP), with 30 per cent market share.
“The thing about Cisco is you are allowed to take chances, you are allowed to take risks, you are allowed to fail,” enthuses O’Sullivan. “We look for things that are changing in the market, like if telephony is going to IP, we’ll make a bet on that. If we think video is going to be a big play, we’ll bet on that.
“We make lots of bets on things that don’t work out, but we don’t talk about them afterwards,” laughs O’Sullivan.
Video is the current big bet for the company that made its fortune selling the “black box” routers and switches that run the internet and telecoms networks.
Even for the notoriously acquisitive Cisco (which has snapped up over 150 companies in its 25-year history), the $590 million purchase of Pure Digital, maker of the web-friendly Flip camcorder, seemed surprising, but O’Sullivan says it is part of Cisco’s plan to play in all areas of networking and communications.
“Video in general is going to be at the centre of everything, not just for Cisco but for the way people communicate.”
O’Sullivan was one of the founder members of the Irish Technology Leadership Group, an association of Irish and Irish-American executives in Silicon Valley that fosters promising Irish tech firms. He believes the three key ingredients of the valley’s success – the availability of skills, venture capital and a world-class university – are emerging in Ireland, and it is time for a change in Government policy. He suggests policy should change to support “foreign venture investment” rather than the foreign direct investment model that has served us well to date.
The State should incentivise the supply of skills and capital and then “get out of the way”, says O’Sullivan. “We shouldn’t be worried in Ireland about attracting the next Cisco, Google or Facebook. We should be worried about the next Cisco, Google or Facebook coming out of Ireland. That’s the missing piece.”
On the Record
Name:Barry O'Sullivan.
Job:senior vice-president with Cisco.
Age:47.
Family:married with four children.
Hobbies:a loyal Cork GAA supporter, O'Sullivan is a member of the Furbo club where he helps train the under-eights. The rest of his free time is taken up with family.
Something you might expect:After 25 years globe- trotting for North American multinationals, he occasionally lapses into a mid-Atlantic drawl.
Something you might not expect:claims he barely knew how a transistor worked when he graduated from college.
