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Chambers Promises a Simpler Cisco

LAS VEGAS -- Cisco Live 2011 -- After his Tuesday keynote, Cisco CEO John Chambers said he's making a mental note to not miss the next big transition in his business.

His talk had included a slide showing Cisco's major transition points so far. In 2001, at age 15, Cisco survived the dot-com bust by expanding beyond switching and routing. Now, 10 years later, Cisco is at another major transition point -- one Chambers said the company will fix by making decisions faster and becoming less bureaucratic.

"Speed of decisions is the number-one thing I want to see improved at Cisco," he'd said during the keynote.

His slide showed the next phase lasting only five years. While a small group of audience members hung out with Chambers after the keynote, Zeus Kerravala, an analyst with Yankee Group Research Inc. , asked about that time frame, and Chambers responded that he expects the next major transition to come that quickly.

He added that he intends to do a checkup on the business at around year four, to make sure he isn't caught by surprise again.

The simpler Cisco
Cisco isn't expected to detail its restructuring until after its fiscal year ends on July 31. So, Chambers didn't talk at all about the staff cuts that have been all the rage in the press. (See Report: Cisco Cuts Could Hit 10,000, Cisco May Cut 5,000 Jobs and Cisco's Early Retirements Begin.)

But he did give Cisco's customers an overview of how the company's management is changing, the goal being to create a faster organization that's easier to do business with.

Because Cisco Live is a customer event, Chambers emphasized that more sales decisions will be made closer to the customer level, rather than by faraway executives.

In the post-keynote hanging-out session, Chambers added the boards-and-councils structure hadn't necessarily outlived its usefulness but had become too bureaucratic. The number of boards and councils has already been reduced to three -- enterprise, service provider and emerging markets. (See Cisco Cuts Down on Councils.)

"The guys that run those boards will be held to greater accountability than in the old model," Kerravala told Light Reading.

Cisco is also merging some product groups, because the siloed approach that served it well in the 2000s has become too clunky, Chambers said. Too many groups emerged -- software had three major ones plus assorted skunkworks around the company. Software is being melded into one group, and something similar is happening to Cisco's other major businesses.

Table 1: Integrating Cisco
These pieces... ... Are getting combined into:
Various software groups OS group
Switching / Routing / Optical Core technology group
Voice / Social media / WebEx Communications and Collaboration team
Cable and set-top stuff Service provider group




Chambers also mentioned in his keynote that the company will integrate new technologies more quickly. Kerravala translates that to mean Cisco has to make "fewer acquisitions or bigger ones" -- probably the latter.

One topic Chambers didn't discuss was market adjacencies -- the technologies peripherally related to Cisco's business. "That to me is their biggest challenge," Kerravala says. "Last year they were talking about 30 adjacencies. I think they might streamline that down to 10."

Adjancencies are maligned nowadays, partly because no one could figure out why Cisco wanted to own the Flip camera. But they helped Cisco dig out of the dot-com crash. Five of the six advanced technologies, as Cisco called them back then, became $1 billion businesses for Cisco, Chambers said. Those include security and wireless LAN. (The sixth technology is probably optical networking.)

Kerravala thinks Cisco has to keep looking outside its normal boundaries for growth. "Enterprise drives the ship, and there aren't that many large areas of spend lift in enterprise that have the margins Cisco wants and that they don't dominate," Kerravala said.

— Craig Matsumoto, West Coast Editor, Light Reading

paolo.franzoi 12/5/2012 | 4:57:45 PM
re: Chambers Promises a Simpler Cisco

I keep thinking you guys are missing the point to mix MEANS and ENDS.


What I keep seeing presented here about MEANS to build businesses (make good technology, have and keep good employees, build a find customer base).  The problem is that this gets mixed up with the END to return value to shareholders.


This is particularly problematic because it is how the Management team gets the entitlement culture that they use to justify their taking extra large paychecks and perks.  The CEO is an employee that works at the discretion of the BoD as representatives of the shareholders.  The Management Team led by the CEO forget that their job is to return value to the shareholders and give it to themselves and their friends.


If I use Nortel as an example, it is the shareholders that lost the money.  The employees lost jobs but at least got a salary along the way.  What did the shareholders get?  Nothing.  The top employees - like the management team - made out like bandits.


By confusing means and ends, it reduces the clarity involved in remembering that shareholder value is the goal.  Sometimes that means shuttering businesses, sometimes it means growing and investing in them.  Different businesses are in different points in their lifecycle. 


Bollocks is 100% wrong because of this.  The internal people ARE the management team.  The Management Team ARE employees.


The beauty of the Silicon Valley thing when it works right is that the employees are owners are the business and thus have interest aligned with the investors to maximize their value.  The downside is when the short term fake results become a big outcome for a few employees.  Which is the second mistake made here, which is to equate maximize shareholder value with make the stock be the most right this second.  Not all businesses are in a position to do this.


 


seven

btierney 12/5/2012 | 4:57:47 PM
re: Chambers Promises a Simpler Cisco

wouldn't that be nice.


I hear internally they are positioning him as the "comeback kid"


LOL


Johnny boy, be a man and walk into the sunset...

bollocks187 12/5/2012 | 4:57:48 PM
re: Chambers Promises a Simpler Cisco

American Business Management is screwed up - thats a fact.


Most executives operate to gain as much money out of a company,  during their time.  Their motivation like politiicans is self preservation at ALL costs. They talk "team" but walk and operate as "I". They have no sense of honor or duty except to themselves. They are the "Desk officer" in HQ sending you into a hell hole, but if they get into such a  situation they would soil their pants and cry like a baby. They are the people that would call "AAA" to change a flat tire, or hire a mexican to mow the lawn. They grumble over the breakfast eggs overdone or the cold wine or warm beer etc etc.


John Chambers is perhaps a great example of a failed CEO, but very rich for his miserable efforts. He now "promises" a simpler Cisco, but has NO clue himself on what is simple. It is just another 'hollow politic' statement to wall street to allow him to reorganize, buy some time, wait fo the market to turn around - hence the recent layoffs.


Duh is spot on so is ....farfaraway. 


A business exists because the internal people want it to exist ! 


 

Duh! 12/5/2012 | 4:57:49 PM
re: Chambers Promises a Simpler Cisco

I shouldn't get sucked into philosophical discussions on business... but will anyway.


Businesses exist to create value through products and services.  Profit is the reward for value creation. Investors invest (as opposed to speculate) in a business because they believe that the value created by the business will be rewarded with growth in their equity and/or dividends.  Management's responsibility is to orchestrate the resources of the business to optimize value creation relative to expenses.  A board's responsibility is to provide oversight on management.   Management should be compensated proportionately to the value they create.  When their compensation is out of proportion, or rewards perverse decisions, then the board is not doing their job.  And, finally, since optimization of value creation and (especially) expense inevitably creates negative externalities, government must regulate businesses to protect other stakeholders from those externalities.


The idea that business exists to solely make a profit is a dangerous one, one that leads to all the dysfunction we see in business today.  There is a crude analogy between business' reward system and the brain's reward system:  when a substance or behavior over-stimulates the brain's reward system, to the point of obsession, we call it an addiction, and recognize that it is destructive.  I would suggest too many executives exhibit addictive behaviors.

inauniversefarfaraway 12/5/2012 | 4:57:51 PM
re: Chambers Promises a Simpler Cisco

7,


It is a great idea for you to reconsider your life, congratulations! You have my best wishes for a more humane view of life. It is never too late!


Many of the issues you raise resemble euphemisms used by sociopaths to justify sanguine behavior disguised as something else.


We could only hope that greed could be synonymous with vested self-interest. History demonstrates that greed eventually degenerates into theft, in these times it could even be termed self-righteous theft. Lawyers and politicians can make lemonade from lemons.


The clue is that nobody wants to invest anymore because they understand the game is fixed. They give up their life savings so the same folks can buy another yacht. The confirmation that the game is fixed is the government getting into the game to float the "greedy" folks' boats.


The upside is that it is self-limiting. As we are already seeing the general trend lines where theft that is actually masquerading as "profit", "greed" and other euphemisms.


Why not repeat the crash of the robber barons and give the "greedy" folks all the money. When they have it all, it loses it's value entirely and we get to start over again. Sure, we all get to suffer as well, but that is going to happen anyway at the rate these idiots are going at.


This is the great lesson: sociopaths cannot appreciate the value of life. This is why they think of it in a strictly numeric sense, usually from a twisted sense of what is "important". The lack of a moral base has serious implications for the sociopath, they can never appreciate the intangible things that give life meaning, they simply lack that faculty. Even if they play the market and win, ultimately they fail. They just don't get why it's important to let the dog win once in a while, otherwise the dog just stops playing.


This is why companies like Nortel fail. They can play the numbers game and still come up short because they don't get it at all. That has to be the funniest thing about the folks at Nortel, they all think they were doing the "right thing". They just don't get why it is important to have (and retain) an ethics officer, for example. They see that kind of role as a "useless noise generator". Hilarious!


So you are an "outhouse" MBA? Good for you! It is too bad you measure your worth in patents, engineering degree and being an entrepreneur to beat up other people. It is too bad you appear to exhibit this need to bully people. Unfortunately, a lot of technical people compensate this way because of poor coping mechanisms. Why do you see yourself as having such low self worth that you need the "trinkets" to show your worth? You are a great human being without the junk! Love yourself man (and that is not a euphemism for go ---- yourself;-)!


One last thing, who would be affraid of being wrong? That has to be a hard life. Engineers often suffer from this disorder and it doesn't help them socially.


All the best 7!

paolo.franzoi 12/5/2012 | 4:57:51 PM
re: Chambers Promises a Simpler Cisco

innamoronidiot,


Perhaps you could read what I ACTUALLY type.  Businesses are set up for investors.  That has nothing to do with the lying that goes on.  Perhaps you have missed my entire point about corporate governence.  That is why companies like Nortel fail.  They quit serving the investors and start serving the management team.  That is the fundamental issue.  The BoD is too close to the management team and thus the company is actually run by and for the management team.  What hurts society about this is that the capital of the society is invested improperly.


NONE - REPEAT - NONE of this changes my statement that in our economic system that corporations are run for the investors.  


Note:  All goverments, economies and systems are rigged - best build your new system assuming people will game it as well.  The only question is can people still live and grow reasonably within it.  I hope you grow up someday and figure out that ALL systems are corruptable and thus will be corrupted.  


And if you think Nortel was bad, check out Lucent.  Remember during the telecom collapse and they dumped their CEO.  Then they handed out multi-million dollar bonuses to the senior management as stay bonuses?  Want a more recent example?  I went out with some friends of mine who work at Tellabs...the following line came up in the conversation "Well, I got my bonus in Februrary and...."  Really?  They are handing out BONUSES given that performance (this person is a low level employee and did not cause them to get handed out).


I am shocked by what gets put up with as how companies are run.  But that changes NOTHING about why they exist.  That is also why when I want to invest in stocks, I study management teams.  If I find a good one, that is where I put my money.  When it changes, I re-evaluate my investments.  The mediocre ones do nothing and the bad ones destroy companies.


tera,


If you want to make a private charity (which in the context of what we are talking about is not relevant) go for it.  If you want to make a non-public company to do something then go for it.  If you want to make a stock (like Cisco) that sits on a public exchange, then the point is to create value for shareholders.  We have laws in place intended to ensure that this is what happens.  These laws do not work well nor are they enforced effectively.


seven

bollocks187 12/5/2012 | 4:57:54 PM
re: Chambers Promises a Simpler Cisco

7,


Stop trying to write a book or lecture us all - its a blog man.


 

bollocks187 12/5/2012 | 4:57:54 PM
re: Chambers Promises a Simpler Cisco

How about John does the right thing and simple resigns for messing up Cisco.


Now that is Change you can beleive in.


 

opticalwatcher 12/5/2012 | 4:57:55 PM
re: Chambers Promises a Simpler Cisco

"Business serve the interest of society by helping to create a place for investors to make money.  That is the sole purpose of a business."


Wow, I can think of a million reasons for businesses to exist. Apparently you can only think of one.



I blame the movie Wall Street which had the quote 'greed is good'. It was meant to be a criticism, but everyone took it as gospel and now everyone is spouting this 'the only reason for businesses to exist' nonsense everywhere.

inauniversefarfaraway 12/5/2012 | 4:57:57 PM
re: Chambers Promises a Simpler Cisco

Do you think you overpaid for the MBA? Would a library card be a better use of cash?

paolo.franzoi 12/5/2012 | 4:57:57 PM
re: Chambers Promises a Simpler Cisco

 


Since I don't HAVE an MBA but instead am an engineer; an entrepreneur and hold multiple patents - maybe you should reconsider your life....given that you have no idea of what you are talking about.  Now let me get back to my agile based SaaS startup (which exists to extract money out of our ideas).


seven

paolo.franzoi 12/5/2012 | 4:57:58 PM
re: Chambers Promises a Simpler Cisco

Business serve the interest of society by helping to create a place for investors to make money.  That is the sole purpose of a business.  Society has other structures to do other things.  If you did something intelligent like READ the Wealth of Nations, you would note that Adam Smith had a role for other societal entities to fill the balance.


If wealth is not put to good use by proper investment of capital, then the society is ill served.  That is the entire point here.  If you believe that the current system is corrupted, why YES IT IS.  They ALL are and all of them will be.  If you believe that the Western Model is broken, well go to a third world country and do a comparison.  All systems will be gamed and corrupted.  It goes with the territory of being a large system.  All regulation does is create a new game that can be corrupted.  It needs to be tried but will fail - like every time it has in the past 10,000 years.


Good luck inna...Just remember, Greed is not good - But good luck forming a society that lives and breathes without it at the core.


 


seven

inauniversefarfaraway 12/5/2012 | 4:57:58 PM
re: Chambers Promises a Simpler Cisco

Hilarious Seven,


Busted a gut laughing, thank you!


Under-regulation is the cause of the many ills you cite. Once again, the behavior is clearly not in the interest of society.


Indeed, markets are allowed to be run like a zoo until they go too far.


According to your vision, only Goldman Sucks would exist. Yet, we clearly see how they are imperiled by the unbridled commitment to "shareholder value".


Really? Overpriced you say? Don't eat your shorts... ;-)


Good luck Seven! Is sociopathy a word?

yarn 12/5/2012 | 4:58:47 PM
re: Chambers Promises a Simpler Cisco

Maybe Cisco should have simply accepted they're no longer a start-up but have become a big company, with all its pros and cons. Be a good big company and watch your weight, but don't get anorexia. With all the trimming I doubt that anything is fundamentally changing that would bring back start-up like growth projections. Much better to set realistic expectations and meet them, rather than trying to relive the past.

paolo.franzoi 12/5/2012 | 4:58:47 PM
re: Chambers Promises a Simpler Cisco

Wow - Businesses to NOT exist to serve society.  Last post on this topic since you seem to not know anything about them.


What we call companies or businesses today were formed as way of growing the economy in Great Britain at the start of the Industrial Revolution.  The entire point was to both spread and limit the risk to investors.  Prior to the limited liability corporation owners could be responsible for the entire loss individually instead of just their portion of the ownership.  This provided people who wanted to invest in the great trading corporations (monopolies set up by the crown) a way of get a portion of the gain, but restricting their risk.


The idea of a board of directors is to represent the shareholders.  In fact, they should all go to jail if they do not maximize the return to the shareholders.  Many people rail about the poor quality of corporate governance.  Take a look at Sycamore, where basically management is absorbing the shareholders money slowly and giving it to themselves.  Very poor management and worse corporate governance.


Cisco is not done.  They are certainly done - and have been so for 10 years - as a high growth corporation.  Those are not the only kind of investments that exist nor are they the only kind of corporation that exists.  What Chambers has been very good at is hoodwinking the investment community in giving him an overpriced stock by continuing to talk them into a big growth story.


I hope someday you learn something about the market economy, because you seem to have no idea how to judge a risk adjusted investment.


Also learn to read, nowhere did I type that companies change the world.  


Here is a hint...the current crop of "HOT" companies (social media as a classic example) are massively overpriced and are great shorts.  You should go back in time to 2001 and read the exact same things that you have typed be written about the .com companies.


Note:  Not all ideas are good ones.  The entire idea is to allow LOTS of them to be tried to let the market sort out the good ones.  That is why 90% of all startups fail.  Every one of these ideas (Cisco [switching and routing], Railroads, Automobiles) have an arc to them.  The best companies (like General Electric) learn to ride many of these arcs and find an investment strategy that suits them through cold hard calculation.  Warm and fuzzy doesn't cut it.  It is also why when it comes to investing - bet on management teams.  The good ones sort out the good investment strategies.  The bad ones are like the ones at Nortel.  And at the time Nortel got destroyed, I worked at AFC (quite a well known fact on these boards).


seven

inauniversefarfaraway 12/5/2012 | 4:58:50 PM
re: Chambers Promises a Simpler Cisco

Seven,


By your own metric, Cisco is done. Thanks! It also looks like you would've closed down Apple long ago...


Yes, we do see things differently.


Businesses exist is to serve society. It is a humble and simple position.


Shareholder value is entirely dictated by society as well. No matter how well you do, it is people that decide whether your company has value.


By your reasoning, Nortel should still be around since it was the most valued stock on the TSX and therefore most successful at building shareholder value. What happened? There is plenty of historical precedent demonstrating the flaw of the numerical model to companies. Were you a Nortel executive? ;-)


Ideas change the world. That is entirely different than your misquote about companies changing the world. 


Good luck to you Seven, looks like you're a traditional management type.


Also, thank you for making my points!

inauniversefarfaraway 12/5/2012 | 4:58:50 PM
re: Chambers Promises a Simpler Cisco

Hello Seven,


Nice of you to jump in with some great input! We differ greatly on what constitutes the strength of companies and whether or not they will rise or fall.


The technical details can easily be interpreted one way or another. From a philosophycal standpoint, things are far more interesting, simpler and clearer.


Cisco did not grow on the virtue of it's management nor the brillance of the founders, these are two enduring myths of the business world. The business world did recognize the brillance of the ideas put forward by the founders and how it fit into society. It is only a pity they do not see the value people bring, this is their Achilles heel. This is why they are so clumsy, buying stuff that makes no sense aimed solely at trying to drive traffic, this is stupid. Sadly, Cisco can find stuff that drives the single idea that gave them so much, but they cannot adapt and do new stuff. They have failed to innovate. They actually believe they can buy innovation: error!


Things seem to be very different with Apple. Even Apple may rise and fall, who can know? They have shown themselves remarkably commited to cultivating ideas and seeing them through while seemingly being able to preserve some concepts contrary to widely held beliefs in the business world. Some of this is due to being attuned to what the customer wants, really wants. Cisco is doing the old world way, telling customers what they can have. Apple refused to give up the computer, even after failures. They saw this as the most intimate connection to their customers. Eat some of that Cisco, if you can!


It is fundamentally about ideas. That is the winner. Cisco will try to tell you that it is only about execution.


Amazing that so many companies miss this. Same with RIMM and their products. They think by throwing everything at the customer, the customer will find something they like. How is that for total capitulation, they are giving up on their customers! These guys have a major issue they don't even get: how do you make your customers love your products?


The example you cite, all three have but one root: pleasing Wall Street. This is something Cisco wants to be good at too. Goodbye!


Ideas change the world, not traditional management. It takes exceptional management to cultivate and build on ideas. Who comes up with ideas: people! Now the only real question is how do you get better ideas?


Finances are great as metrics of performance, however not ends in themselves. That road only leads to disaster.


Businesses exist to serve society. Bean Counters believe that companies exist to make money. Apple strives to serve their customers and employees and makes money in the process, Cisco tries to make money and doesn't do a great job with their customers or their employees. That is how simple it is.


The only sad part about Cisco is that they had a real shot, too bad they're wasting it. It will only take a competitor that figures out what the customer wants to put a nail in this coffin.


That was the flaw with the old school guys, they were used to telling customers what they wanted. That only works in a monopoly.


Remember that the technological/financial terrors created are insignificant compared to the power of the force.

paolo.franzoi 12/5/2012 | 4:58:50 PM
re: Chambers Promises a Simpler Cisco

 


"Bean Counters believe that companies exist to make money."


Businesses exist to raise their stock price...full stop.  They exist simply to add shareholder value.  Everything else is a means to that end.  The people and systems that are there are required to build shareholder value.  If they are not doing so, then they need to go - Upper Management, Engineers, Janitors, whatever.


People have no value into and of themselves to the company except that they can create long term value in intellectual propery either in products or systems.  The whole point of a management team is to tune the investment in these people, products and systems.  If you believe that people should invest infinitely, then I will give up talking to you.  But if you understand that people should be put into products and solutions that make more money than what they are doing currently, then I think we are talking about the same thing.


Most companies have problems with Innovator's Dilemma, which is the innovation problem you have described.  Look at Google for example.  They can not build a business that is as good as they made out of their search/advertising business.  To expect them to invent a business as good as that again is completely flawed.


This is the challenge.  Their Growth and thus PE and PEG are never going to be better and the growth of all these companies will slow.  That is because no market is infinite nor are they all they as profitable as one another.  So, companies change.  They become less efficient over time.


Again, the point of a company IS NOT to change the world.  That is the point of inventors and entreprenuers.  The point of a company is to maximize the shareholder value.  You may not like that answer...but that is the answer.


seven





paolo.franzoi 12/5/2012 | 4:58:52 PM
re: Chambers Promises a Simpler Cisco

I think there is this problem with comparing the companies that he has.  I think traditional management (and radical management) would point out the same thing.  Cisco is spending WAY TOO MUCH on engineering on old product lines that are not providing growth.


Cisco (like many large companies with ongoing businesses) has this problem.  Cisco faces the additional challenge that many of its traditional markets are becoming more competitive (more competitors of significance and this is lowering pricing).


Go take a look at Apple and you will see that the revenue from their new businesses (and profits as well) drown out the drag from their old businesses.  But I would say the same about Mac computers that I do about Cisco's traditional switch and router business.  These are sustaining business and pick your favorite number between 5 and 10 percent of revenue and that is your R&D budget for those businesses.


What Apple has done well and Cisco has done poorly is both create new large growth opportunities and manage these to maturity.  Apple's time on this will come in a few years when iPad, iPod, iTunes is no longer the growth engine it is today.  Will it mean that Apple goes out of business...no and neither will Cisco.


The comparison to Nortel is patently wrongheaded.  Nortel did three horrible things:


1 - It gave customer's the money (read here CLECs) to buy their products.


2 - As part of #1, it decided these new customers were more important than the customers that provided it the revenue that they needed (I was in many a place where they sided with emphasized the CLECs over the RBOCs).


3 - They wrecked their balance sheet with some horrible acquisitions (Qtera).


The stock issue that Cisco has was visible a long time ago.  Cisco is not in a disruptive growth part of the business cycle.  They have a huge number of outstanding shares and need to start buying them back or doing a reverse split (or something to rationalize it).  Can they make a big disruptive new business?  Maybe, maybe not - IBM never did it again.  But IBM thrives 35 years post its prime.  


Nortel and Lucent had one other huge issue that Cisco never has had.  They ran for their first 100 or so years as part of a monopoly.  They never really effectively became good competitive businesses in a general market.


seven


 

Pete Baldwin 12/5/2012 | 4:58:53 PM
re: Chambers Promises a Simpler Cisco

Interesting read. I haven't gone through the guy's posts on new management -- and I have to admit I'm a little suspicious; I don't trust the squishy practice of spouting new management philosophies just because a couple of case studies happen to have worked.


But he's at least half right: bean-counting has taken too much priority in business. Too many businesses seem to be run by the accountants and lawyers, and the craft of what they do suffers.


Kind of ironic that he lists Cisco under "traditional management."


InaUniverse wrote:

<div>

&gt; JC also looks like he needs a haircut.


&gt; Have a read at the following:


&gt; http://blogs.forbes.com/stevedenning/2011/07/16/why-is-the-world-run-by-bean-counters/?partner=yahootix

</div>
inauniversefarfaraway 12/5/2012 | 4:58:53 PM
re: Chambers Promises a Simpler Cisco

It would be interesting to ask engineers about whether they think the wrong decisions keep being made, precisely because "old world" managements' day is done. Maybe this could be part of an IEEE survey, seems more relevant than pay.


Another interesting experiment is to ask former Nortel employees who are working at Cisco how the company "feels". Astounding that some would say that it is exactly the way Nortel was before the fall...


Yes, it's a big disappointment that Cisco has also turned to the dark side. Evil was in it's genesis, it could not rid itself of the bad seed. It is like watching kids when they see Annakin turn to the dark side and they go sooo quiet. What a riot that is!


This is great news, if the "fuzzy new boss" is just the same as the old boss, they will crash and burn just the same.&nbsp;


Breaking news: Cisco lays off a bunch... The begining of the end.


That seems very "traditional management" to most people.

inauniversefarfaraway 12/5/2012 | 4:58:59 PM
re: Chambers Promises a Simpler Cisco

JC also looks like he needs a haircut.


Have a read at the following:


http://blogs.forbes.com/steved...

StartUpGuy1 12/5/2012 | 4:59:04 PM
re: Chambers Promises a Simpler Cisco

It seems that Cisco really is a binge/purge type of organization.&nbsp; 2003 layoffs and the same matra "more focused"..&nbsp; Then they binged again and now in 2011 it is time to purge to get "more focused".&nbsp;&nbsp;


They want to be "customer focused".&nbsp; They should listen to the customers and quit preaching to them about the "One World under Cisco".&nbsp;&nbsp; Maybe a refresher course from John Morgridge could do JC a bit of good.&nbsp; Leave the entourage at Corporate and start listening to the customers and take responsiblity...

olegzz 12/5/2012 | 4:59:08 PM
re: Chambers Promises a Simpler Cisco

Sailboat, I would support your IMHO in 100% as a former Cisco employee.


And I believe that most of engineers, who is still obliged to&nbsp;support some&nbsp;stupid "initiatives" created by "perfect" managers otherwise you could lose your PLI, would also&nbsp;agree with&nbsp;you.


Even 5 years ago, Cisco technolgy leadership was quite obvious, you would even don't tell aloud&nbsp;about this. But nowadays CTO in CiscoLive11 has to admit attendees repeating "We are leader in industry..." Who does believe in this?

bkechiche 12/5/2012 | 4:59:17 PM
re: Chambers Promises a Simpler Cisco

Gabe, the Starent team that came witht the transition is still at Cisco driving the effort, they had two exces heavily exposed to the analyst side event. will be more thna happy to biref you, fill some gaps.

^Eagle^ 12/5/2012 | 4:59:18 PM
re: Chambers Promises a Simpler Cisco

You could probably fire everyone with rank of VP or above (with a very few exceptions) and no one would miss them. &nbsp;Most folks at that level only create endless meetings that don't get real work done. &nbsp;The real work is done by rank and file engineers, engineering managers, and the folks who manage the direct relationship with customers. &nbsp;


it would be interesting to know how much it would save in $$ if Cisco were to simply lop off the top 1/4 of the company's executive ranks. &nbsp;I would cut all management that is more than 2 layers between working engineers and department heads. &nbsp;Or more than 3 layers away from JC himself. &nbsp;Haha, I would also completely clean out JC's suite of managers below him and admin staff. &nbsp;Give him a desk in a cubicle near engineering. &nbsp;Make him do his own powerpoint slides like everyone else. &nbsp;Go back to real start up mentality. &nbsp;Become aggressive in technology not simply "management techniques".


Sadly, the same is true for many many companies struggling financially. &nbsp;From start ups to giant companies like Cisco. &nbsp;


Surprise surprise, cut out the highly paid, low work output producing execs in most companies and you will see strong balance sheets and growing profits. &nbsp;[Note: the assumption that the "C" level of a company is smarter and can make better decisions than the rank and file middle manager is just that; An assumption. &nbsp;They, the executive teams, simply have access to a different mix of information. &nbsp;Not smarter at all, and certainly clearly not able to make better decisions!]


IMHO


sailboat

Pete Baldwin 12/5/2012 | 4:59:27 PM
re: Chambers Promises a Simpler Cisco

&gt; How is does cutting 14% of your work force make you simpler?


That's a key question. Some staff cuts are probably necessary, but any larger action would seem like it's being done just to appease Wall Street.


My hunch is that you're right - the primary changes Cisco needs are in the management ranks.


Pete Baldwin 12/5/2012 | 4:59:27 PM
re: Chambers Promises a Simpler Cisco

Gabe -- You know, I don't know. Last year would have been a big splash year for Starent, but I didn't attend last year.


Overall, the event does focus more on the IT side (lots about Cloud and UCS, e.g.)

Rush21120 12/5/2012 | 4:59:28 PM
re: Chambers Promises a Simpler Cisco

How is does cutting 14% of your work force make you simpler?&nbsp; The question is what/whom will be cut.&nbsp; Cisco has grown too big, is losing profitability and has way too many managers.&nbsp; The issue, as it always has been for Cisco, is that the people making the decisions are still the same.&nbsp; Without significant&nbsp;top/middle management changes&nbsp;history/Cisco will repeat regardless of what JC says.&nbsp; I say this as a previous 9yr Cisco employee 2000-9, where I and several others created products for Cisco making ~$7B in direct sales.

Gabriel Brown 12/5/2012 | 4:59:30 PM
re: Chambers Promises a Simpler Cisco

Hi Craig -- does the Mobile Internet Technology Group (part of Service Provider) ever come up at these big Cisco events?


This group was formed around the Starent acquisition and, from what I can see, looks to be doing well. It has had some big strategic wins outside the core W. Europe and N. America in the last 12-18 months.

Jeff Baumgartner 12/5/2012 | 4:59:32 PM
re: Chambers Promises a Simpler Cisco

Interesting move. With cable finally going with IP video , or at least QAM/IP hybrids, it might make sense to fold all that together if Cisco doesn't have to place as much product development behind a&nbsp;cable QAM partition.&nbsp; Looks like those products will be able to address the telco and cable markets , or at least address them with some tweaks that are specific to the SP. JB

inauniversefarfaraway 12/5/2012 | 4:59:32 PM
re: Chambers Promises a Simpler Cisco

Hope JC doesn't reprise the "I believe" video from the Nortel days, what a sad video that was. Remember the girl that hesitantly said "I believe... Nortel will be here... in a year..."


Can someone give us those famous last words "Cisco will survive!"

Galileo 12/5/2012 | 4:59:33 PM
re: Chambers Promises a Simpler Cisco Good article Craig. I wonder if it means that cisco will be focusing it's switching more innthe core level and less in the access
Pete Baldwin 12/5/2012 | 4:59:34 PM
re: Chambers Promises a Simpler Cisco

So, the optical group (which seemed to be resurgent) is now merged with switching &amp; routing.&nbsp; I'd missed that detail in my own table - Andrew Schmitt of Infonetics pointed it out.


In my defense: I'd been thinking about how optical had been taken off the AT list, so that its *revenues* would be reported as part of routing &amp; switching. That was years ago, and it's not the same thing as actually merging the groups. Interesting.


One that I *DID* notice is the merging of cable into a more general service provider group. I always perceived Scientific-Atlanta as its own little universe inside Cisco, but ... not any more.

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