Optical/IP Networks

Cisco's Reorg: What It Means

So what's up with the big changes in Cisco Systems Inc.'s(Nasdaq: CSCO) top management team?

Well, lots. Cisco on Tuesday night craftily announced a reorganization of the top management in its technology division, as well as appointing Charlie Giancarlo as the third CTO in Cisco's history (see Cisco Reorgs, Names Giancarlo CTO) -- at exactly the same time as Juniper was announcing its second-quarter earnings (see Juniper Surprises With Q2).

It's a big move for Giancarlo, because he's not just assuming a new role as CTO -- the promotion is effecting big changes in the reporting structure. Giancarlo is now perceived as the big Number 2 to the boss, Cisco CEO John Chambers, to whom he now reports. Before, he reported to Mario Mazzola, senior VP and chief development officer.

In other words... Giancarlo's moving up, big time.

Being been handed one of the most visible roles in the networking and telecom industries should put to rest rumors that Giancarlo was weighing opportunities at Broadcom Corp. (Nasdaq: BRCM) and other companies.

Giancarlo has held a number of broad management roles at Cisco, but he has never held a CTO title before, nor has he been considered the top technologist in any particular discipline -- a sign that Cisco views the CTO role as more of a marketing role than it did in years past. Sources say that Giancarlo is know for his skills in marketing and handling relations with big customers, and several sources say Cisco is defining the CTO role in terms of customer relations.

In 1999, Giancarlo was given charge of Cisco's vast Small-to-Medium Business (SMB) line of business. In 2001, he took charge of four of the 11 technology groups that reported to Mario Mazzola as Cisco went through one of its largest reorganizations ever.

"Charlie has been a big contributor to the technology and business strategy for more than 10 years with Cisco," says Cisco spokesman George Paris. Paris says Giancarlo will be more "externally focused," meeting with big customers and expressing Cisco's technology vision. Mazzola, on the other hand, will have more of a day-to-day involvement with Cisco's development and engineering groups.

Like his predecessors, Giancarlo will have to lead Cisco's "visionary" camp, acting as counterweight to the "pragmatic" side that focuses on quarter-to-quarter results, says Frank Dzubeck, president of Communications Network Architects. "He can be extremely challenging and extremely persuasive in his arguments."

Giancarlo's predecessors, by the way, were Ed Kozel, who was Cisco's CTO from 1990 to 1998, and Judy Estrin, who held the post from 1998 to 2000.

In addition to his CTO responsibilities, Giancarlo will continue as president of Cisco's Linksys division, and he'll assume responsibility for the company's global government solutions group.

Table 1: Cisco's Technology Groups
Aug-01 July-04 Cisco's Billion Dollar Markets*
Access Data Center, Storage, Switching, and Wireless IP Telephony
Aggregation Internet Networked Homes
Cisco IOS Mid-range & Stackable Switching Optical Networking
Core Routing Network Management Security
Ethernet Access Optical and Broadband Transport Storage
Internet Switching and Services Routing Wireless LANs
Network Management Services Security
Source: Cisco

* These are technology areas that Cisco says it expects to attain $1 billion mark.

Cisco's technology group also went through several other changes, some announced, some kept quiet, and some unknown.

In the kept quiet or unknown department:
  • Cisco has acknowledged that Larry Birenbaum, senior VP of Cisco's Ethernet access group, has taken a leave of absence. His title, for now, hasn't changed, but there's no word on when he'll return to the company.
  • It is unknown what's in the cards for Roland Acra, the Procket CEO who has stated that he won't stay with Cisco for long after Cisco's acquisition of the company is complete. Would the shuffling in Cisco's upper ranks change his mind?
Here are the other changes Cisco announced this week:

  • Jayshree Ullal, former head of Cisco's optical networking group, was given charge of the company's newly formed security technology group. She'll continue to report to Mazzola.
  • Luca Cafiero, another of Cisco's employees who came out of Crescendo, has been tapped to lead Cisco's new data center, storage, switching, and wireless technology group, which also reports to Mazzola (see Crescendo Corps Soars at Cisco).
  • VP Tony Bates has won sole responsibility for Cisco's carrier core multiservice business unit, which does… well, not quite sure yet. Anyway, the group reports to Prem Jain and Mike Volpi.
  • VP Kathy Hill is now in charge of the new mid-range and stackable switching technology group, which reports to Mazzola. No word on whether a long-range and unstackable switching group is also in the works.
  • Kambiz Hooshmand, VP and general manager, is now leading Cisco's optical and broadband transport technology group, which also reports to Mazzola.
All changes announced are effective August 1.

So is that the end of Cisco's deck shuffling? Probably not. Some observers say Chambers has just gotten started, as he suits up Cisco with a more mature corporate look to prepare for new growth areas. "I think there's more to come," he says. "This is just a start."

— Phil Harvey, News Editor, Light Reading

( Craig Matsumoto, Senior Editor, Light Reading, contributed to this article)

edgecore 12/5/2012 | 1:26:57 AM
re: Cisco's Reorg: What It Means Doesn't Cerent/Cisco have something like 30,000 ONS 15454's out there? Does that not add up to close to $1B for optical?

inlight 12/5/2012 | 1:26:56 AM
re: Cisco's Reorg: What It Means $1B market means so much sales in a year-by-year, not total sales from the introduction of the product. :)

Mr. Mutt 12/5/2012 | 1:26:51 AM
re: Cisco's Reorg: What It Means Sad. $1B market for Cisco use to mean sales in a QUARTER! Now it's annual...My how things have changed.
Dindon 12/5/2012 | 1:26:47 AM
re: Cisco's Reorg: What It Means what about top executive that Cisco is loosing? Any confirmation to where and why they are going?
CiscoSystems15454 12/5/2012 | 1:26:43 AM
re: Cisco's Reorg: What It Means I remember when "Money Green" Polo Type Shirts were passed out to employees in certain areas of the Optical Transport Business Unit that stated "To $1 Billion....At Light Speed" noting the fact that $1 Billion worth of 15454's were sold. Soon afterwards the perks or free shirts, hats and meals were soon gone alongwith "Key Cerent Executive Management" such as CEO Carl Russo, VP of Engineering Ajaib Bhadare, and VP of Sales Terry (Forgot his last name). I wonder why Jayshree Ullal was "moved" from Optical to Security. What's up with Ron Martin, what's he done lately? Anyone have any info on Kambiz Hooshmand and what he is going to do to take the Optical divison to where it once was high aloft on the Cisco Platter?

Only time will tell my friends.....
mainline 12/5/2012 | 1:26:41 AM
re: Cisco's Reorg: What It Means From what I have seen, Cisco optical is still rising.

#1 in US SONET Market in 2003 by Dell 'Oro
Over 45,000 units deployed
The competition is failing...Nortel and Lucent...
The second tier is struggling...Fuji and Ciena

Let see how the market shakes out over the next year. It may be a $1B market for Cisco.

tsunami 12/5/2012 | 1:25:57 AM
re: Cisco's Reorg: What It Means I heard Ron Martin has moved back to Texas from Petaluma -- maybe he know's something is about to happen?
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