Cisco bouncing back

Mike Sapien/Ovum
08 Aug 2011

July’s Cisco C-Scape sessions were once again held in conjunction with the Cisco Live partner event in Las Vegas. Cisco gave a strong indication of its progress and future roadmap. However, there was an undercurrent which ran throughout the sessions due to recent organizational changes, early retirement offers, and layoffs at Cisco over the past few months. These changes include not just reorganization but also product rationalization and business unit consolidation. Even though Cisco’s transformation is still a work in progress, there is already some tangible progress in Cisco’s major product lines and solution area investment plans.

Cisco has re-emphasized the importance of its service provider partners, notably more than in the recent past. Finally, attendees got to see the fruit of some of the launches from last year’s event (e.g. Cius, Quad). Cisco has clearly increased its efforts to regain its focus and organize based on its main solution areas.

Relationships, innovation, and simplification were highlighted

In his opening presentation, John Chambers started his session by presenting the company’s overall initiatives, which were to deepen relationships, drive more innovation, and simplify operations. The distribution of responsibility for a product or service line has been re-centralized: councils have been eliminated, and accountability now lies with a single group or business unit head. There was evidence of this in the consolidation of its software, router/switching, and video products as well as other solution groups.

The distributed council system was the product of many years of organizational growth, which in turn led to a need to reduce layers of management and restructure teams to clarify who was responsible for its major product lines. The changes which Cisco is undergoing are not complete, but we look forward to further focus and organizational improvements. These improvements could result in further investment in new areas such as Quad and advanced mobility.

Major initiatives remain the same, with some trimming

Cisco’s major initiatives on security, data center/virtualization, mobility, collaboration, and video growth remain largely constant. The UCS (Unified Computing System) product line, in the data center/virtualization areas, has gained market share and proven to be successful, which was not what many analysts would have predicted. But there were also some products that needed to be discontinued. These were expensive acquisitions, but Cisco made a bold move to cut these quickly and take the hit earlier than most of its competitors would have.

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