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Is Cisco Finally Serious About the Consumer?

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ned_hooperWhile most of the tech world was abuzz today with the announcement of Google’s (s goog) Chrome OS, another piece of interesting news slipped through the cracks: Cisco (s csco) announced that Ned Hooper is being promoted to chief strategy officer.

With the appointment, Hooper enters a much bigger role at the company. He will not only continue to be the lead for consumer acquisitions, but he’ll help shape overall Cisco strategy and acquisition activity. And if Hooper & Co. can tie the pieces together, we may now have a new and very serious entrant to fight the big boys in the connected consumer marketplace.

Like some up-and-comers before him, Hooper was responsible for Cisco’s consumer strategy.  This responsibility is often seen as a key whistle-stop for execs — and an indication that CEO John Chambers envisions them as a potential heir. Before Hooper, Charlie Giancarlo acted both as chief development officer for Cisco and the president of Linksys and was thought by many to be a possible applicant for Chambers’ seat. Mike Volpi, another one-time heir apparent, helped bring in Scientific-Atlanta, a crucial pillar of Cisco’s consumer strategy, before moving onto online video startup Joost.

Of course, this isn’t the only recent shift for Cisco’s consumer business. While some viewed the company’s acquisition of Pure Digital as an expensive move, Cisco gained through the purchase a highly respected consumer executive, Jonathan Kaplan. During his time running Pure, Kaplan has been able to leapfrog giants such as Sony in the consumer video-cam market with Pure’s cheap and simple products. With Hooper moving up, Kaplan will fill the role of running Cisco’s consumer retail businesses, including overseeing products from Linksys, Pure Digital and Pure Networks.

Cisco has long been criticized for its industrial design and software for consumer products, but Kaplan undoubtedly will look to apply to Cisco many of the same standards that made Pure Digital cameras some of the more user-friendly consumer gadgets in the market (and as anyone who has used video camcorders knows, that’s no small feat).

All this could end up muting criticism that Apple’s new video-enabled iPhone made Cisco’s Pure move a hasty one. Such criticism ignores the fact that Cisco’s strategy now will involve leveraging its strength in the pay TV and broadband market and closely integrating its consumer products, such as Flip cameras, with the network, using software pieces like HNAP from Pure Networks and WebEx.

Michael Wolf is VP of Research for GigaOM. Look for more analysis of Cisco’s consumer strategy coming soon over GigaOM Pro.

9 Responses to “Is Cisco Finally Serious About the Consumer?”

  1. MauroNewMedia has posted a new article on Pulse>UX titled: “Why Cisco flipped over the Flip Video Cam (and paid $590 million for a small dose of simplicity)”. Ever wonder how much simplicity costs? This post digs into Cisco’s acquisition of the Flip Video Cam (a paragon of simplicity) and why buying simplicity does not work for corporations with complex IT products. If you ever wondered if your company is actually capable of creating simple user experiences, check out our list of key factors that are correlated with creating simple products on a corporate-wide basis.

    Read the full article:

  2. Let’s get one thing out of the way here. The Cisco acquisition of Pure Digital may turn out to have been a mistake. As pointed out, one new release from Apple via the video enabled 3GS and this becomes a write down for Cisco. Second, the argument that they brought in talent is not in question. What is in question is the $590M is cost Cisco shareholders.

    If Cisco wants to become a player in the consumer market they outta buy a company such as Palm. Though Palm is trading at a high price (IMO), it still would only represent approx 2% of Cisco today (market cap: Palm $2B vs. Cisco $115B).

    A mobile device strategy for Cisco would give them immediate access to consumer, SMB, Enterprise

    Applications currently under Cisco umbrella or could be part of an acquisition roadmap:
    1) Create synergies down the road with Webex developer platform and Mobile development platform —- APPS FOR CONSUMERS & BUSINESS
    2) Extend existing Unified Communications offering which is fantastic —– COMMUNICATIONS FOR CONSUMERS & BUSINESS
    3) Acquire company that has traction in the internet embedded new TV’s to carry rich web content and merge with Linksys group—— CONSUMER & BUSINESS CUSTOMERS

    Bottom line Cisco is a great company and is only a few moves away from becoming a force to be reckoned with in the consumer segment without losing focus on their enterprise bread and butter.

    Ned, congrats and next time your in Danville give me a ring:)

    • Cisco’s achilles heel has been and will be mobile. Still, they have seriously lacked a good consumer exec to drive that Apple like simplicity and industrial design, and the Pure team gives them that.

      I think that where Cisco lacks mobile, Apple lacks a good carrier/pay TV story, and they also would have a hard time aligning with any consumer electronics vendors in the living room space (and are going to have trouble integrating popular 3rd party big-content services for those media companies disenchanted with iTunes). They have forced themselves a go-it-alone route in the living room. Only they can pull that off like no other company can, but Cisco can much easier align and partner in both CE, online media and payTV carrier space.

      All that said, a Palm or even – gasp – RIM acquisition (maybe too expensive) would be a industry changing acquisition.

  3. Habib Ullah Khan

    Great post. If only because it figured out that this move is as much about Kaplan as it is about Ned Hooper. From a purely corporate cultural perspective it is fascinating to see when an outsider enters a company with its dominant culture and whether he thrives or simply survives. Building great companies is a culture game as much as it is a technology game. And Kaplan’s example will show us how much Cisco is ready to be great.

    Since I work at Cisco this is of a little bit of interest to me!

    • @Habib – To me, Cisco acquired both Pure Digital and a serious consumer exec team to drive their business. If Kaplan alone can spur an entirely new line or two of consumer business that generates $billions over a multiyear period, that alone could be a justification for the $590 million pricetag.