2011 Top Ten: Cisco News Bites

It's been a complicated year for Cisco Systems Inc. (Nasdaq: CSCO). The company began to look vulnerable and shaky, and it even had to lay off people (although the numbers didn't match CEO John Chambers's personal definition of "layoff").

Here's our summary of the drama. Did we miss anything? Is the ranking just plain wrong? Let us know on the message boards.

10. Repatriation
With about $40 billion hoarded overseas, Cisco has been a big champion of a tax holiday for repatriated funds. CEO John Chambers even pitched the idea on 60 Minutes in March.

9. Five core priorities
Let's say them all together: 1) routing, switching and services; 2) collaboration; 3) data center virtualization and cloud; 4) video; and 5) architectures for business transformation.

These get recited at every Cisco presentation nowadays. It's Cisco's penance for overextending into things like consumer electronics (see below).

8. Set-Tops
Should Cisco keep selling set-top boxes? The question came up as the layoffs and product cuts began. Cisco says the answer is yes, but not everybody agrees.

7. Signs of a comeback -- maybe
Cisco officials would probably like this to be No. 1, as the company really is showing signs of recovering. It's regaining share in core markets, at least temporarily: Check out the numbers from Infonetics Research Inc. Cisco seems confident enough to go back on offense, anyway.

6. Optical revival
CoreOptics lives! As does the ONS 15454. Optical networking will be a hot topic in 2012, thanks to 100Gbit/s networks, and Cisco won't be left out.

5. Market share/competition
While Cisco scouted for more "adjacencies," competitors started nibbling at its switch and router market share, using high-end merchant chips as their ammo. Cisco seemed less invulnerable than in the past, and that prodded the company into making some big changes.

4. Layoffs
Arguably, this was the most important news at Cisco this year. But it didn't come with the outcry (from outsiders, anyway) that the next two items did.

3. Boards-and-councils: gone
Analysts hated the boards-and-councils structure, and they didn't like the idea that Cisco was using it to discover even more market adjacencies. The boards-and-councils aren't dead, but they're severely cut back. Not a lot of tears were shed over that decision.

2. Flip
Was it really the second-most-important thing Cisco did in 2011? Probably not. Is it the one thing on this list that people will still talk about five years from now? Absolutely.

1. Key people leaving
Executives are always moving from one competitor to another, and Cisco has had some interesting pickups lately. But overall, it looks like Cisco has a losing record on the season.

The shuffling isn't done. On Dec. 16, Business Insider confirmed that John McCool, head of Cisco's switching business, was moving to an executive position in sales -- a puzzling change for the man running, as BI put it, the most important business at Cisco. More change is ahead in 2012, no doubt.

— Craig Matsumoto, West Coast Editor, Light Reading