Light Reading

Is Cisco's Chambers Retiring in the Fall?

Mitch Wagner
6/11/2014
50%
50%

Cisco CEO John Chambers may be planning to announce his retirement soon, and may leave the networking technology giant in the fall.

Cisco Systems Inc. (Nasdaq: CSCO) is also embarking on a reorganization that will result in 20,000 people changing jobs inside the company, according to Silicon Valley chatter. The reorganization would be intended to reduce duplicate work. Many employees are developing the same technology for different business units; the reorganization would streamline those redundancies.

The 65-year-old Cisco chief is set to announce his retirement in July and step down in September, at the end of the fiscal year, said a source. The Rayno Report was more cautious, simply saying Chambers may retire as early as September.

Chambers had said two years ago that he might step down in two to four years. (See John Chambers IDs Potential Successors.)

If Chambers does go now, he'd be leaving with the company in better shape than it was two years ago, when Cisco was struggling. Chambers would now be able to boast of refocusing the company and getting a turnaround under way. Cisco shut down its Flip camera unit in 2011, and sold off Linksys last year, getting it out of the consumer business and focusing on B2B market. Cisco set its sights on the Internet of Things (or Internet of Everything, as Cisco calls it) and articulated an SDN strategy, launching its Application Centric Infrastructure (ACI), and bringing spin-in Insieme in-house. (See Cisco Flips on Consumer Business, Cisco Unloads Linksys Unit, Cisco Integrates Virtual, Physical Networks, For Cisco, Is 'SDN' Code for 'Crush VMware?', Cisco's ACI Gets Physical With SDN, and Chambers Caught in 90s Deja Vu).

A company spokesman declined to comment on the report, labeling it a rumor. But he did say that Cisco would provide at least six months' lead time on Chambers' retirement, making a July announcement of September retirement unlikely.

Chambers would likely announce his retirement on an earnings call, says 451 Group analyst Christian Renaud. The next earnings call is August, raising some doubt about the veracity of the July declaration rumor.

Chambers would announce the retirement "one or two quarters in advance," Renaud says. "Unless it's health-related -- and that would put the stock in a tailspin."

Cisco stock traded at $25.02 at 7:26 pm EDT Tuesday, up 0.08% in after hours trading.

Just prior to the Cisco Live conference last month we started hearing rumors that Chambers planned to announce his retirement then. That obviously didn't happen.

When Chambers announced his possible retirement two years ago, he named several potential successors: Gary Moore, chief operating officer; Robert Lloyd, executive VP of worldwide operations; Chuck Robbins, senior VP of the Americas; and Edzard Overbeek, senior VP of global services. Chambers and Lloyd, now president of development and sales, met with reporters together during a Q&A session at Cisco Live.

Chambers said in 2012 that Moore would take over the company if Chambers left abruptly -- which Chambers called the "hit by the bus scenario."

But one Silicon Valley source said Cisco's directors may look outside the company for a successor, perhaps bringing in a senior executive from IBM Corp. (NYSE: IBM) or Hewlett-Packard Co. (NYSE: HPQ) to beef up Cisco's services strategy.

At Cisco Live, Chambers predicted an upcoming period of "brutal, brutal consolidation" in the technology industry, with most of today's industry leaders falling. He specifically picked on HP and IBM, though he said Cisco's own future is not assured. (See Cisco's Chambers Predicts 'Brutal' Tech Consolidation.)

— Mitch Wagner, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profileFollow me on Facebook, West Coast Bureau Chief, Light Reading. Got a tip about SDN or NFV? Send it to wagner@lightreading.com.

(7)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
shashidhara
50%
50%
shashidhara,
User Rank: Light Beer
6/13/2014 | 4:58:16 AM
Cisco will miss Mr Chambers
He has been tremendous leader. Keeping cool and calm even during crisis time.

Cisco will definitely miss him, hope to see the fresh air continue to do good for the company
brookseven
50%
50%
brookseven,
User Rank: Light Sabre
6/12/2014 | 8:47:49 PM
Re: Insiders selling stock
Mitch,

Before you consider insider sales significant, you need to see if it is part of a regular selling plan that insulates folks from accusations of insider trading.  The way to look is to back in time and see if there are equivalent sales in earlier periods.  If there is, then it is a plan and essentially robotic selling without any knowledge.

seven

 
bosco_pcs
50%
50%
bosco_pcs,
User Rank: Light Sabre
6/12/2014 | 2:41:08 PM
Re: Why'd a fiercely competitive CEO want to go when the day of reckoning is near
Mitch :

 

Anything could happen but the list could practically apply to anyone.

 

To be fair, as Dan has pointed out, Mr. Chambers himself has made some vague reference. And the source of this round of rumors seems to come from Scott Ryanovich, who is a reputable industry watcher. That said, Chambers' retirement watch is almost like Apple's iTV circa 2 years ago. So devil's advocate seems to be warranted 
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
6/12/2014 | 11:54:34 AM
Insiders selling stock
9 different insiders have sold Cisco stock in the past 30 days. 
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
6/12/2014 | 11:53:44 AM
Re: Why'd a fiercely competitive CEO want to go when the day of reckoning is near
bosco_pcs: That's a valid question. Arguably, the best time for a CEO to retire is not when the company is turning from failing to successful. The best time would be after the company has turned the corner. 

However, I can think of several reasons why Chambers might be thinking now is the time to retire:

- Any of us might develop health problems that could threaten our ability to work. 

- Another opportunity that he needs to jump on now. President John Chambers, anyone?

- Maybe he's thinking there's always a reason to NOT retire. 
DOShea
50%
50%
DOShea,
User Rank: Blogger
6/11/2014 | 5:05:30 PM
Re: Why'd a fiercely competitive CEO want to go when the day of reckoning is near
If he follows through, he's just sticking to his own previously announced plan, so maybe not a big surprise. But I agree, for as much as he has been lately tallying Cisco's challenges and the market's dangers (consolidation so "brutal he said it twice...), this seems like the sort of time Chambers relishes--when he can go into the nearest phone booth (dated reference, I know, stay with me) and change out of his gray suit into another indestructible (he thinks) gray suit to save the day.
bosco_pcs
50%
50%
bosco_pcs,
User Rank: Light Sabre
6/11/2014 | 2:30:10 PM
Why'd a fiercely competitive CEO want to go when the day of reckoning is near
That's the question I posted to Scott on Twitter when I read his blog post by way of someone's else tweet. While the stock has behaved best since the financial crisis began 5 years ago, it is not really the best relative to the old four horsemen. So, unless the board has an issue, does it fit Mr Chambers's persona dated back to his Wang days?
Flash Poll
From The Founder
Network architects aiming to upgrade their networks to support agile, open, virtualized services in the 21st century need to consider new criteria when choosing between technology suppliers.
Live Streaming Video
BTE 2015 Sponsor Keynote: HP
Dr. Prodip Sen, CTO, Network Functions Virtualization, HP
LRTV Custom TV
Red Hat Demo

7|2|15   |   10:53   |   (0) comments


Red Hat's Nicolas Lemieux demonstrates how Red Hat is driving innovation through open source communities.
LRTV Custom TV
Red Hat's Approach to OpenStack Adoption

7|2|15   |   5:17   |   (0) comments


Red Hat's Radhesh Balakrishnan outlines his company's open source strategy for both enterprises and telcos.
LRTV Custom TV
The New IP Goes Mobile With vEPC

7|2|15   |   1:12   |   (0) comments


Heavy Reading's Gabriel Brown discusses results of a Light Reading survey sponsored by Brocade that shows a clear commitment by mobile operators to move quickly to virtual EPC deployment.
LRTV Custom TV
Making Business Sense of SDN

7|2|15   |   1:42   |   (0) comments


Results of a Brocade-sponsored survey show that CSPs have a clear sense of SDN use cases but are wrestling with the business case. Sterling Perrin of Heavy Reading looks behind the numbers.
LRTV Custom TV
NFV Will Be Here Sooner Than You Think

7|2|15   |   2:22   |   (0) comments


Forget the usual ten-year cycle for new technologies – NFV will be a core part of CSP networks in five years, based on results of a Brocade-sponsored survey, says Heavy Reading's Caroline Chappell.
LRTV Custom TV
The New IP Gains Traction With CSPs

7|2|15   |   1:42   |   (0) comments


Roz Roseboro of Heavy Reading analyzes results of a Light Reading survey sponsored by Brocade showing that CSPs are getting serious about making the transition to the New IP era.
LRTV Custom TV
It's (Real) Time for Analytics

7|2|15   |   1:42   |   (0) comments


Heavy Reading's Jim Hodges looks at how CSPs say they plan to use analytics to deploy new services in real time as part of The New IP, based on results of a survey sponsored by Brocade.
LRTV Documentaries
IoT in Action

6|30|15   |   1:39   |   (8) comments


Two co-workers discuss the benefits of IoT technology.
LRTV Interviews
Ericsson Opens Up on OPNFV

6|30|15   |   14:16   |   (2) comments


Martin Bäckström, VP and head of industry area Datacom at Ericsson, talks to Light Reading founder and CEO Steve Saunders about the emergence of OPNFV, the importance of standards and Ericsson's OPNFV plans.
LRTV Custom TV
NetNumber Founder Discusses NFV/SDN Impact on SP Networks

6|26|15   |   4:15   |   (0) comments


NetNumber Founder Doug Ranalli examines why SPs need a new network infrastructure for service agility. While NFV and SDN are the tools, the old ways of thinking about signaling control are inhibitors. Doug provides his recommendations.
LRTV Custom TV
Orchestrating NFV vCPE Services Across Multivendor Networks

6|26|15   |   5:46   |   (0) comments


Nirav Modi provides an overview of vCPE, the fastest-growing NFV use case, showing how Cyan's Blue Planet orchestrates vCPE services across a multivendor infrastructure to rapidly deliver new managed services for business customers.
LRTV Custom TV
ZTE at LTE Summit Amsterdam 2015

6|26|15   |     |   (0) comments


As one of the leading global telecommunications providers, ZTE presented its cutting-edge technology at LTE World Summit 2015 in Amsterdam. On display at ZTE's booth were the latest R&D achievements in wireless, 5G development, HetNet, deep convergence of FDD and TDD, and RCS/IMD/iSDN/vCN.
Upcoming Live Events
September 16-17, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 6, 2015, The Westin Peachtree Plaza, Atlanta, GA
October 6, 2015, Westin Peachtree Plaza, Atlanta, GA
October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
November 5, 2015, Hilton Santa Clara, Santa Clara, CA
All Upcoming Live Events
Infographics
Hot Topics
Who's Feeding Fiber to LinkNYC Hotspots?
Mari Silbey, Senior Editor, Cable/Video, 6/29/2015
What's a Gigabit Good For?
Carol Wilson, Editor-at-large, 7/1/2015
Colt to Jettison Ailing IT Business
Iain Morris, News Editor, 6/30/2015
Eurobites: Activist Investor Takes Stake in AlcaLu
Paul Rainford, Assistant Editor, Europe, 6/30/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Casa Systems has been going from strength to strength over the last couple of years. In 2013, it became the first vendor to ship an integrated CCAP device -- the ...
Cedrik Neike, SVP of Global Service Provider, Service Delivery, at Cisco, talks to Light Reading founder and CEO Steve Saunders about solving service provider customer problems in a virtualized, DevOps world, including multivendor support and the future of network procurement.
Cats with Phones