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The telecommunications industry is just beginning to get its arms around the impact IP is having on networks, services and business trends, said John Chambers, president and CEO of Cisco Systems, when delivering Tuesday afternoon's keynote address.

CEOs the world over have several network-related issues on their minds: getting the speed and flexibility they need from their communications networks so they can quickly change the way they do business; cutting costs; and getting a larger share of their customers' wallets.

In the '80s networks helped businesses focus on their supply chains. During the following 15 years networks were all about enabling transactions. The next ten years will focus on facilitating interactions between businesses and their customers and supply-chain reps, Chambers said. As a result, productivity will be driven at a much faster pace. While the network enables these interactions, their impact goes "way beyond communications" he said.

"Many people believe that if you put in the network and applications, 'they' will come," said Chambers. "They are disappointed to learn that if you don't change your processes at the same time, you do not realize the productivity you were expecting. You only get one-tenth the productivity gain if you don't do both in combination," he said.

To win market share in the IP era, companies must show their customers how to personalize their services and gain control of them as they upgrade their communications systems and networks. It's also important for service providers to realize that the sweet spot in the market going forward is with small businesses that cannot afford their own IT staffs. The fastest growing business opportunity will be with commercial businesses rather than with enterprises, he added.

Making the new environment resilient, integrated and adaptive is crucial. Networks will have to be able to determine who you are, what device you are using and what you are authorized to do. They also must be aware of where you are allowed to use a service and how much you are going to pay for it, Chambers said.

Service providers and equipment manufacturers must also move network security to the top of their list of action items.

"Security problems will slow down this industry more so than anything else," he said. "Security is an architectural play because each element needs to be protected as well as self-defending."