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So John has said he’s going to divide Cisco up into 5 different divisions.

• Core Routing / Switching and services
  
• Collaboration (webex)
  
• Data Center virtualization & Cloud
  
• Architecture
  
• Video
  

Hum. Three of those are Vaporware? Or are not really a tangible product?


Core Routing. This is supposedly Cisco’s meat and potatoes. At least that’s what they have been saying is their meat and potatoes for over a decade. Usually when companies try to downsize or try to refocus, they usually refocus on their main competency. In Cisco’s case, I’d say that’s probably routing and switching. Although one wonders if they have gotten so big if they still have the advantages of the smaller quicker, nimbler competitors?


collaboration: I mean what exactly is collaboration? that’s more like a service? So how many people does it take to turn up a service? To make a product that allows people to collaborate. Also does it make sense to go up against somebody like Microsoft for collaboration? I guess…

Cloud. What exactly is cloud? I’ve heard many of the pundits talk about “cloud” like it’s actually something real. All cloud is, is a re-branding of services offered inside of the network. Hell, We’ve been doing “cloud” services since the 90′s… we just never branded it. So is that really a division?


Architecture This one is more of a service…. It’s a billing ploy. We make such a complicated product that we’ll sell you professional services to show you how to use our product When I worked for the network services division of IBM I was “outsourced / pimped” to Kodak for “Architecture” I help put together several large designs, for antiquated hardware that was WAY past it’s prime. It continued to run, but It did make me feel young. Anyway, I was pimped out at what I thought at that time to be a fantastic hourly wage. It was something like $500 an hour to help them do “Architecture” work. However that’s realistically more of a professional services gig. A whole division? But are you really competing against Juniper on this one? Or are you going after CSC or EDS?


Video Video? Is that really going to be a division of Cisco? These video rooms are pretty cool. I mean I went down to the main office of Cisco in Scottsdale (Swanky) and had a Video conference with my Sales Engineer. He’s out of New York. It was pretty impressive. It was more impressive when they had the full rack of soda and water bottles that were free. They have since taken out those water bottles / soda. What was cool was the fact that everybody had the same water bottle brand. So when you sat your bottle on the desk and where looking at the other folks in the conference, they had water bottles identical to what you had. I mean for 7 cents. Come on give me a break.

John take note. I know you gave the employee’s the option to either get rid of the soda / water as an option to save more employee’s? but taking it away from the customers, and from your video rooms was probably overkill. That’s probably one location where the free water / soda should have stayed.

Anyway a video division of Cisco. Okay, I guess I can see it.

John is an eloquent speaker / speech writer. It’s well worth the time it takes to read his soliloquy below. It reminds me of a speech I heard our CEO give in the fall of 2001. He actually influenced me to feel that our company was in such good shape that we were sure to rebound and that everything would be good in the market. I was so impressed I went out and bought 1000 shares! Then as it dropped in half. I bought another 2200 shares. and then thinking it had suddenly gotten cheaper again I bought 5,000 shares and was counting all of my eggs and chickens… Laughing all the way to the bank, until in May it dipped below 35 cents and I heard the rumors that we where going into bankruptcy. I immediately called my 401k and sold all of my shares for just pennies on the dollar. I made out with like $1000 out of my 40,000 investment. That was a really hard lesson to learn, and basically wiped out a good portion of my retirement. (There was a bunch I couldn’t touch. All my matching was in GBLX stock). I’m much more cynical now

John said… “Our approach to leadership in the core amidst this transition will change.”

Full Text Below

As many of you know, my values and approach to leadership are grounded in part by what I learned from my parents. Both doctors, they taught me to fuel what’s healthy and to heal what’s not. They taught me to seek solutions to challenges, not symptoms. Over the years as your leader here at Cisco, I’ve also learned many things. I’ve learned to read market transitions by listening deeply to our customers and partners. And I’ve learned to adjust when and where it’s needed, quickly and transparently.

With this in mind, I’d like to share with you my thoughts about Cisco, as Gary Moore also shares his perspective after the first 30 days as our COO. About what’s working well and is fundamental to who we are and what we stand for. And about aspects of Cisco today we need to change, what you can expect from me and what I expect from you as we execute against our decisions and move forward, together.

First, as always, let’s start with our customers. I’ve spent significant time recently reaching out to many of them around the world. I’ve had extremely candid conversations about why they buy Cisco, why they don’t, and what they think we do best. These conversations reinforce what I have known to be true about Cisco: our customers believe we are a company of passionate people that take time to imagine what’s possible, and to do what it takes to make them successful.

I’ve also solicited very direct feedback from many of you—as individuals, in small group meetings and through your participation in my blog postings and our CEC discussion forums (internal Cisco forums). You are telling me that there is a reason you are at Cisco – our culture, our values, our vision. You’ve also made it very clear that we must make it simpler to do the work we love to do, and to accelerate the impact we know we are making for our customers.

It is clear to me that we have incredible foundational strengths – our people, our relationships, our innovation and our strategy to extend the role of the network. We have anticipated market transitions and made good decisions in capturing them. We are disrupting the data center space. We are redefining the collaboration market. And we have gone big on video, a market that is changing society and business completely.

We are a $40B company that for the last decade has seen a virtual explosion in market opportunity. The Internet has taken on an entirely new form– and our growth strategy has been based on capturing the incredible opportunity afforded by this massive demand for the network. Many say that in the face of this expansion, Cisco needs more discipline. I agree.

To be clear, I am confident that our vision and fundamental strategy is right –we are aggressively capturing the opportunity to take the network where our customers need it to be. No one has the breadth and scale of Cisco in networking. No one has Cisco’s breadth of innovation, the scale and reach of our customer delivery model or our talent and expertise. Cisco’s value to our customers is differentiated and it is simple: we globally deliver network-centric platforms that make them more competitive. Our strategy is just as clear—we are extending the network platform to enable collaboration, data center / cloud transformation and video architectures that expand our technology and business relevance to customers and partners on a global scale.

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

Cisco’s mission—on each of our badges—is to shape the future of the Internet by creating unprecedented value and opportunity for our customers, employees, investors and partners. Barring the tech downturn over a decade ago, few have questioned Cisco’s ability to achieve this mission in our 26+ years as a company. Time and again we’ve had the vision to take the network to places most argued was not possible. Cisco is a great company – we have much to be proud of, and much to look forward to.

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

We now need to prepare ourselves for what’s next, as you will see Cisco make a number of targeted moves in the coming weeks and as we move into FY12. These actions will be based on uncompromising integrity and will represent a very simple set of guiding principles:

We will not fix what’s not broken. There are numerous areas where we’re executing incredibly well for our customers and partners. In these areas, you will see no disruption and you will see nothing less than support and empowerment. Simply put, we will not get in the way of our success. Our five company priorities are established: leadership in core routing, switching and services; collaboration; data center virtualization and cloud; architectures; and video. The importance of delivery to market through our partners is also clear – and we will do nothing but reinforce this.
We will take bold steps and we will make tough decisions. With change comes disruption, and you will see this necessary and healthy disruption as we make meaningful decisions in a timely, targeted and measureable way. We will address with surgical precision what we need to fix in our portfolio and what we need to better enable.
We will accelerate our leadership across our five priorities and compete to win in the core. Again, our strategy to extend the role of the network will not change. Our approach to leadership in the core amidst this transition will change. In switching we understand that our customers are buying across broader segments and specific needs in this market. We understand that our competitors in this area are fierce, with different business models and architectures. We will not be defined by them. Most important, we understand that our customers want to stay and grow with Cisco. They know we will partner with them to make their business successful and their technology investment sound. They know us well and understand that we will not leave or devalue this business. We need to give them the right reasons to make this transition with us, and we will.

We will make it easier for you to work at Cisco, as we make it easier for our customers and partners to work with Cisco. We will simplify the way we work and how we focus our attention and resources. We will significantly rework our systems, tools and funding models to do this. We will reshape the operational foundation in order to empower our teams, integrate our major functions, and allow our people to focus on inspiring and important work. We created the role of COO to expedite this effort and Gary Moore and I will drive these changes with the leadership team.

We are all responsible for driving operational excellence across Cisco. As you’d expect, I’m asking each of you to play your part in this transition. The responsibility does not fall on one leader or one team. It will not be easy and I expect your participation, flexibility and feedback along the way. As I’ve said before, we will look back at this time in Cisco’s history and remember it as challenging, and important to the future of our company. Plain and simple – we need to roll up our sleeves and work it out, together. I’m ready, your leadership team is ready, and I know you are ready.

I want to leave you with a question: what do you want Cisco to be? I want it to be a company that keeps changing the way the world lives, works, plays and learns. A company that knows how to win and intends to continue that track record. A company that’s taking the network where it needs to be, with focus. And at a place that puts people, customers and communities at the core of its values. That’s Cisco, no excuses.

Thank you for being part of Cisco. You have my commitment, my respect and my appreciation. Let’s define and win this transition together. This is our start.

John