Cisco Network Setup Scores for ‘Magic’ Johnson

SAN JOSE, Calif. — For pro basketball legend Earvin “Magic” Johnson, the new game in
town is unified communications.

The former Los Angeles Lakers superstar met with a group of reporters Friday via a
video conference to discuss how his sprawling Magic
Johnson Enterprises
(MJE) has deployed a range of Cisco products in its unified
communications line aimed at small to midsized business (SMB).

For networking giant Cisco, it was an opportunity to show off a high-profile user of
its SMB unified communications products, which Johnson and his employees use the
technology to help run MJE’s businesses and investments nationwide, from video meetings
to call-center integration.

From Los Angeles, Johnson spoke via videoconference with a group of sports and tech
press located in Boston, New York and Cisco’s headquarters here in San Jose. In
particular, the event enabled Cisco to show off its
high-end TelePresence videoconferencing system

But the meeting marked a departure from the norm for MJE, which typically uses
standard Webcams to do video calls from their desktop and notebook systems, along with
Cisco’s WebEx Connect to share documents and comments online in real time.

Johnson, who holds the position of CEO at MJE, said the company’s technology, which
also includes a consolidated voice, data and wireless network, along with
videoconferencing and CRM tools that have been deployed for about eight months — and
which have proven invaluable, he said.

“I can tell you it’s saved us a lot of money in plane flights and hotels,” he said. “I
know over time it will save us millions of dollars and also man-hours. My whole strategy
in ’08 was that we had to … make sure we used our time better. I’m very happy and I’m
seeing it with my employees. And you can never underestimate a happy employee.

“And we’re still just scratching the surface of what this can do,” he added.

Video Meetings and Call Center Integration

Simplifying communication and cutting travel costs is a key necessity for MJE, which
owns and operates businesses in 22 states and 91 cities. In addition to companies that
Johnson owns outright, MJE also operates several franchise locations of chains like
Starbucks, while overseeing a charitable foundation as well as an investment fund. Most
recently, Johnson created Magic Workforce solutions, a staffing services company he
launched in September.

Johnson said his business philosophy has been to meet underserved demand, particularly
in urban markets that lacked Starbucks and 24 Hour Fitness centers until his company
started franchises there.

That approach is paying off, he said: The fourteen 24 Hour Fitness centers he owns
average $11,000 a month in revenue, versus a national average of about $9,500, according
to Johnson.

But keeping MJE’s various businesses running smoothly requires some innovative uses of
unified communications technology. The company’s conferencing network, installed by Cisco
channel partner Straight Up Technologies, is designed for some 40-plus MJE employees
across the country. The system also plays a valuable role in handling incoming support
calls from customers.

The setup includes a Virtual Private Network (VPN), IP communications software, Caller
ID and other communication features.

An earlier version of MJE’s system lacked Caller ID, so the process of managing
incoming calls had been less efficient. The current system, however, is tied to a
Microsoft Customer Relationship Management (CRM) system, so the call center can readily
reference a customer’s earlier record to better direct and handle incoming calls.

Page 2: The right and wrong times for videoconferencing

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Being able to better manage his holdings is one key reason Johnson moved so quickly to
integrate videoconferencing into MJE’s operations. For instance, Johnson said he was
particularly happy to be able to conduct business from his home, first thing in the
morning, via videoconferencing.

But that’s not to say he’s ready to move to video for all of his business

“When you have an initial meeting with a company, you have to do it in person to get
the deal done,” he said. “That’s how you get a better feel for the company. The follow-up
meetings, now you don’t have to get on a plane anymore.”

He also said he would never fire an employee in a video meeting and any disciplinary
action by him or his regional managers should be done in person.

“Unless it’s a crisis,” he said. “I haven’t had to use it in that regard.”

How “Magic” of an Endorsement?

Cisco wouldn’t say how much, if anything, MJE spent on the setup. A spokesperson would
only say the deal was part of Cisco’s larger partnership with the NBA, to which it’s a
technology supplier. It’s also not saying whether Johnson had been compensated for his
appearance on Cisco’s behalf.

The company issued a press release today touting its relationship with Johnson and
MJE, but it also did not confirm whether the basketball great would appear in ads or do
other promotional work for the company, nor whether MJE expects to continue investing in
its unified communications infrastructure.

The statement did say the two plan to continue working together “to further transform
the company’s small business operations.”

Just how effective Magic Johnson would be as a technology pitchman isn’t clear.

“I would imagine the results would be mixed,” Phil Taylor, a senior writer for
Sports Illustrated, told “People’s tastes in some areas
are influenced by athletes, but I’m not sure when it comes to their business, they have a
great deal of faith in someone who isn’t as well known in that field.

Martin Reynolds, an analyst with Gartner, agreed that small-business owners are
looking for proven solutions rather than flashy endorsements.

“What SMB’s need is stuff that works,” Gartner analyst Martin Reynolds told “A Magic Johnson might get their attention, but then it’s up to
Cisco and its channel partners to show there’s a real value to them.”

Still, Taylor added that Johnson’s growing businesses do make for a compelling

“He’s one of the few pro athletes that was serious about becoming a businessman when
he retired,” Taylor said. “Most of them buy into a restaurant or something, but he’s
become a real business mogul.”

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