Comments on: Cisco: What Went Wrong and What Needs to Be Fixed

By: Al Gore

Al Gore — Fri, 08 Apr 2011 17:01:46 +0000

John Chambers has failed to groom and retain world class talent. Think Mike Volpi, Charlie Giancarlo, and more recently Tony Bates. He needs to go immediately. Other positive steps to turn around the ship:
1. More than half of John’s direct reports should be fired for incompetence
2. All board and councils should be dissolved, put about 5 division GMs in charge
3. About 50% of the empire building SVPs, VPs, Senior Directors and Directors should be fired
4. Push accountability and decision making down the organization. Hire some fresh talent for heavens sake, enough with people who go home by 4 PM and collect huge paychecks
5. Get out of Consumer, set top box, and me too businesses

By: Brad Reese

Brad Reese — Thu, 07 Apr 2011 02:37:45 +0000

Hi Stacey,

Why Cisco CEO John Chambers has got to go!

Accountability starts at the top and in my personal opinion Cisco CEO John Chambers is soley responsible and should be held soley accountable for what ails Cisco, meaning, he’s got to go! (as the video interview confirms).

I mean, in the video, a megalomaniac John Chambers (at least in my opinion), is preposterously proposing that all of Cisco’s business and government customers model their own management structures after Chambers’ convoluted management structure at Cisco.

Then audaciously and shamelessly this week, John Chambers’ wrote a memo that blames Cisco employees for what ails Cisco (below, I’ve corrected a small portion of Chambers’ memo in yellow to make it accurate in my opinion):

“As I’ve said, our (my) strategy is sound. It is aspects of our (my) operational execution that are not. We (I) have been slow to make decisions, we (I) have had surprises where we (I) should not, and we (I) have lost the accountability that has been a hallmark of our (my) ability to execute consistently for our (my) customers and our (my) shareholders. That is unacceptable. And it is exactly what we (I) will attack.

“That said, today we (I) face a simple truth: we (I) have disappointed our (my) investors and we (I) have confused our (my) employees. Bottom line, we (I) have lost some of the credibility that is foundational to Cisco’s success – and we (I) must earn it back. Our (My) market is in transition, and our (my) company is in transition. And the time is right to define this transition for ourselves (myself) and our (my) industry. I understand this. It’s time for focus.”

In a stunning rebuttal of his memo above, Cisco CEO John Chambers was quoted in The Wall Street Journal:

One way he teaches his direct reports to delegate is to “spread them thin,” he says. Eventually they “realize they can’t keep their head above water and if they want to swim they have to give [some responsibilities] to their teams. Thirty [new businesses] is more than almost any senior executive thinks is manageable,” Chambers adds. “The real point of going to 50 is to keep people open minded.”

The CEO says he doesn’t have a limit in mind for the number of new businesses that Cisco can pursue. “We honestly don’t know if the right number is 20 or 30 or 40″ new growth initiatives, Chambers says. But he adds, “It’s no longer a question of will the structure work.”

Again in my opinion, the head of Cisco CEO John Chambers has got to roll, and if Cisco’s Board of Directors are not up to making that decision, look for Cisco’s shareholders to make it for them.

Sincerely,

Brad Reese

By: Eddie

Eddie — Wed, 06 Apr 2011 20:16:47 +0000

> By not staying true to its core networking focus, Cisco …

Stacey, also don’t forget Cisco and its iPad also ran vaporware tablet they called the Cius (what a waste of people’s time and attention when Cisco announced this about a year ago – brings new meaning to the word ennui).

By: George

George — Wed, 06 Apr 2011 15:31:00 +0000

Cisco, John Chambrrs, should look at the work being done at the Palo Alto Research Center (PARC) regarding content centric networking (www.ccnx.org) to get a view on the future of the router and the network. Routers will have cpu and on-board storage – they will absorb functionality like CDN (content distribution network) into the network versus those applications being deployed on top of the network.

By: Meenu Sarin

Meenu Sarin — Wed, 06 Apr 2011 15:30:50 +0000

A few things that went wrong for Cisco:
• It diversified in some wrong directions (combining home router biz with set top box , and not foreseeing the fast advent of convergence (SA $6.9B acquisition), video is also a bit controversial (going by the market’s tepid reaction to Flip)
• Underestimated emerging Asian players – Huawei and ZTE
• Being less competitive in its core products technology – Juniper is gaining grounds.
• And mainly misreading the growing power of consumerization – as cited by Quentin Hardy in his article in the March issue of Forbes, at a time when businesses want more consumer technology, Cisco seems to be trying to sell consumer products as if they were biz gear – high quality but expensive.

And a few which seem to go right:
• Deep pockets – $40b in cash and another $40b in annual revenues
• Big investment in R&D ($6b)
• Recent announcement of collaboration software business to increase productivity
• Chambers’ acknowledgement that things have gone wrong and steering to correct

Feb 10, 2011 – the day Cisco lost 15% of its market share (and Juniper gained 76%) cannot be forgotten so easily by the once bellwether of the global technology sector……

Also talking about networks, what’s your take on moving from “just switching packets” to “deep packet inspection”?

By: Razi Sharir

Razi Sharir — Wed, 06 Apr 2011 11:11:02 +0000

Not quite so. Network devices much like others have been overly commoditized when Huawei stepped in. Giagentic routers will not cut it longer term
Commoditized dial tone (Telco) & air time (Cellco) drove accelerated adoption of VAS (value added services) as next source of revenues.
VAS meant mostly expanding out of the box; totally the opposite of what’s listed here to go back to the core forte…
Cisco needs to move into the Cloud where the services are (for now…) low hanging fruits and can help take a lead and later sustained position.
It does not mean to drop the open/unified-network dearm though

By: John McFall

John McFall — Wed, 06 Apr 2011 05:34:49 +0000

Wow, just wow. Cisco is finally getting called to the carpet for their flagrant mismanagement. The years of infighting, focusing on empire building, chasing off the top talent if they didn’t work in ‘emerging technologies’ and somehow mythically believing collaboration is a management style is coming back to hurt them in a big way.

Closed, proprietary, and outdated systems such as the Catalyst and Nexu lines getting trounced in performance and features by smaller more nimble and most importantly more focused competitors, coupled with Cisco’s debacles in the consumer, server, cable, switching, and appliance markets have enabled Juniper, Arista, F5, Aruba, Palo Alto, and Riverbed to grow very large businesses off of the customers who are continually underserved by Cisco.

Let’s see if John gets past the rhetoric and can make some real changes there or not, til then – still a strong sell. Although a good activist investor like a Giancarlo from Silver Lake would have a field day divesting the junk M&A buys Cisco made since he left.