Cisco Starts Spring Cleaning

3:20 PM It's like finding things in the garage that you know you should throw out, but you just don't

Craig Matsumoto, Editor-in-Chief, Light Reading

April 6, 2011

2 Min Read
Cisco Starts Spring Cleaning

3:20 PM -- After dabbling in so many "adjacencies," Cisco Systems Inc. (Nasdaq: CSCO) sounds as if it's ready to streamline, based on CEO John Chambers's memo this week. (See Cisco Signals Major Restructuring.)

It's not that surprising, after seeing Cisco get nasty surprises in businesses both old (switches) and new (consumer). I should have seen this coming. (See Consumers Clobber Cisco and Is Cisco Spread Too Thinly?)

Taken from my Wednesday pre-coffee notes, here's a swipe at what Cisco should, might or won't cut.

  • Flip and Umi should both go. It's unclear to me why Cisco has to be the one to put video on consumers' hands. Other companies will do it better, and their traffic will still traverse Cisco routers.

  • Servers could go but won't. Data center virtualization and the cloud are a top priority for Cisco, and it's going to be a huge battle. But do you really need the servers? (See AlcaLu Wants the Data Center, Too, Brocade Responds to Juniper's QFabric, How Q-ute! Juniper's QFabric Rethinks the Data Center and Cisco Dreams of Data Center Unity.)

  • Optical networking. I'm convinced Cisco would have sold this business five or six years ago had the price been right. Cisco's refreshed its optical plans with the CPT, but maybe that should be the company's last stab at this overcrowded market. (See Sources: Cisco Rejects Optical Bids.)

  • Telepresence. Even though Cisco uses this thing a ton, it could pull an Intel Corp. (Nasdaq: INTC) here: Now that the idea is popularized, let other people do the grunt work of continuing it.

  • Videoscape. Pieces might go (Flip), but the larger Videoscape concept has too much of Cisco's future identity tied to it. Videoscape still sounds like a good response to the changing role of the network. It's going to be complicated and burdensome, like moving a chandelier with lots of breakable, free-swinging parts, but I think Cisco will keep at it. (See CES: Cisco Unveils Master Plan for Video.)

  • Councils and boards. Chambers says Cisco has to simplify the way it works, and that sounds like the end of this management structure. Part of the goal was to speed up ideas and create lots of new projects across divisions. In hindsight, it's also a way to build a rudderless ship.

    Analyst Mark Sue of RBC Capital Markets put it well in his Wednesday morning note: "While it sounded good coming from an MBA professor, the real world application of councils, boards, and committees did more to complicate things than anything else at Cisco."

    What would top your to-do list, if you were Chambers? The message board is open.

    — Craig Matsumoto, West Coast Editor, Light Reading

About the Author(s)

Craig Matsumoto

Editor-in-Chief, Light Reading

Yes, THAT Craig Matsumoto – who used to be at Light Reading from 2002 until 2013 and then went away and did other stuff and now HE'S BACK! As Editor-in-Chief. Go Craig!!

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