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The John Chambers Era Is Ending at Cisco

Craig Matsumoto
9/18/2017
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Most of us who follow Cisco, and certainly most of the people working there, have never known the company without John Chambers at the helm, either as CEO or more recently as chairman. So today's announcement that Chambers will not seek re-election as chairman in December truly marks the end of an era.

Granted, it's not as big a step as when Chuck Robbins took over as CEO two years ago. At that point, Chambers was replaced as the face and voice of Cisco Systems Inc. (Nasdaq: CSCO). The company and the media took time to gush about how Chambers's 20-year tenure saw the company grow to nearly $50 billion in annual revenue. (See Cisco's Robbins to Replace Chambers as CEO and Robbins Succeeds Chambers as Cisco Changes CEOs.)

At 68, Chambers is now letting go entirely. Robbins is expected to be named chairman at the shareholder meeting in December. (See Cisco's John Chambers Retiring Even More.)

It's significant because Chambers's personality shaped Cisco and defined the way it was perceived in the world. He loves playing the salesman. When he gives a keynote, he ad-libs half of it while strolling through the audience, making eye contact with as many people as possible.

In so many cases, a company's culture trickles down from the top, in good ways and bad, and I think Cisco is a prime example. Engineering is certainly important to Cisco, but stories from the inside during the Chambers tenure described a sales-focused organization, one where products and divisions are pitted against one another in a model resembling economic markets.

And then there's the lawsuit against Arista Networks Inc. Cisco might have legitimate grievances, but I think the lawsuit is personal, driven by Chambers' hot-blooded competitiveness. It's fueled by the presence of a former Cisco executive (Arista CEO Jayshree Ullal) and the fact that Arista successfully carved into some of Cisco's prime customers -- not only Microsoft, but also the financial sector.

Chambers won't vanish into the ether on January 1. Like John Morgridge before him, he'll be around as chairman emeritus (read: retired guy who shows up at events). But Cisco will really be Robbins's company as of next year. He has a difficult task, moving Cisco toward a software-centric culture, and the company's seven consecutive quarters of declining year-on-year revenues show what kind of struggle he faces. Chambers got out at a good time.

— Craig Matsumoto, Editor-in-Chief, Light Reading

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danielcawrey
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danielcawrey,
User Rank: Light Sabre
9/18/2017 | 12:45:28 PM
Changes
The company has to change, and this is a good time for that shift to happen. 

Cisco did well in a world that is now fading. Into the fore comes cloud, NFV, SDN and so much more. It seems time for things to change. 
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
9/18/2017 | 12:40:37 PM
Sentimental
Your take is more sentimental than mine. Chambers seemed like he was gone a few months after he stepped aside as CEO, and Robbins has made his mark. 

In retrospect, Chambers orchestrated the changing of the guard well. 

Cisco seems to be going through hard times at this point. Seven straight quarters of revenue decline. How long will investors stand for it?
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