Ed Kozel, Cisco Systems Inc.’s (Nasdaq: CSCO)original CTO, has returned to take up a fulltime positionat his old employer, according to Light Reading sources on Cisco’sSan Jose campus.

Big deal? Nope. Huge.

Consider his track record: Kozel successfully masterminded Cisco’stechnology strategy during its sensational transition from pioneeringstartup to router juggernaut. (He quit the CTO role in 1998 to enjoy a sabbatical in Vienna, and then pursued a career as a VC, although he hung on to a seat on Cisco’s board of directors).

That storied period in Cisco’s history contrasts sharply with the company’s problematic present, as it struggles to morph itself from a provider ofenterprise networking products into a service provider solutions company: Beset by a host of new competitors, its stock valuation is wavering. Its optical networking strategy also has encountered hurdles; Cisco has yet to ship the optical switch it acquired when it bought Monterey, for example.

Given these challenges, observers think that Kozel’s return is timely.

"Look at how Sycamore Networks Inc. [Nasdaq: SCMR] has put together an end-to-end optical network vision.To me it looks much more complete than anything Cisco offers at the moment.The Cisco optical thing looks kind of rushed," says Scott Clavenna,president of PointEast Research and director of research for LightReading.

Kozel’s new job title is chief technology officer, service provider line ofbusiness, according to a Light Reading source at Cisco. He willreport to Kevin Kennedy, senior VP, service provider line of business atCisco (and also a buddy of Kozel).

“This is the first time that Cisco has created a CTO for a specific line ofbusiness,” says David Newman, president of Network Test. “That’s a verygood thing. It shows that they are taking the service provider marketseriously. They need to.”

According to Light Reading sources, Kozel will focus on Cisco’s IPstrategy -- and help gear it for battle with Juniper Networks Inc. (Nasdaq: JNPR), which has beenmaking increasing inroads into the high-performance router market. Hisexpertise also will help Cisco defend itself from the threat posed bynewer and increasingly dangerous-looking terabit router vendors, such asAvici Systems Inc. (Nasdaq: AVCI; Frankfurt: BVC7) and Pluris Inc..“In the past Cisco has pursued a strategy of buying competitors to get themout of the way. That’s not an option here, because buying another routervendor would be a huge admission of weakness in what is their core market,”says Newman.

Some industry watchers spy the hand of John Chambers, Cisco’s CEO, in thehire. “I would bet that John convinced him to come back due to the lack of atrue technical visionary at the company,” says a partner at a prominent VCfirm in Silicon Valley, who spoke anonymously. “Clearly, John is concernedabout recent defections at the executive level, and given the stock trend, heis being proactive in trying to reverse matters by bringing back some of theold guard.”

Others point out that Cisco has changed during Kozel’s absence. “There issome question as to whether Ed is up to the task. He's not a big companyguy, and he doesn't have the mind share of the exec staff that he once had,”says a source claiming familiarity with the situation. “On the other hand,one of his old internal adversaries, Don Listwin, has now gone.”(See Listwin's New Job Unveiled.)

Cisco declined to comment.

-- Stephen Saunders, US Editor, Light Reading http://www.lightreading.com