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Cisco splits into 11 technology groups

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Cisco Systems has radically restructured its business moving from three lines of business to 11 technology groups. The reorganisation sees the departure of the head of its service provider line of business, Kevin Kennedy.

The move will see the creation within Cisco of centralised engineering and marketing organisations, and comes at a time of flat sales for the networking giant.

Cisco chief executive, John Chambers, said its sales were in line with its current expectations.

"We are making these changes at a time when we are beginning to see signs that our business is stabilizing," said Chambers. "Our line of business structure has served us very well in the past, when customer segments and product requirements were very distinct.

Today, the differences have blurred between these customer segments," he added.

Cisco's 11 technology groups are: Access, aggregation, Cisco IOS Technologies Division (ITD), Internet Switching and Services, Ethernet Access, Network Management Services, Core Routing, Optical, Storage, Voice and Wireless

This structure replaces the organisation which Cisco had in place since 1997 with three lines of business: enterprise, service provider and commercial (read small business).

"This new structure brings us even closer to our customers, encourages teamwork and eliminates product and resource overlaps," said Chambers.

The biggest change arising out of this move is the departure of Kennedy, who will be leaving Cisco after eight years to "pursue external opportunities". He will continue as an advisor to the firm.

Big winners in the reorganisation include Mario Mazzola, former senior vice president of Cisco's new business ventures group, who has been named chief development officer and effectively becomes second in command at Cisco.

James Richardson, formerly senior vice president of its enterprise line of business, and arguably the dullest speaker in IT, becomes chief marketing officer. Smart cookie Michelangelo Volpi, Cisco's chief strategy officer, has been placed in charge of the largest technology area, Internet Switching and Services.

Earlier this month Cisco posted profits for its fourth quarter of just $7 million, down 99 per cent from $796 million profits in the same period last year, as the slowdown in the telecoms market continued to hit sales at the networking giant.

The results, which were in line with Wall St expectations, showed Cisco's sales dropping 25 per cent from $5.72 billion to $4.3 billion in its fourth quarter this year. For the full year, Cisco recorded losses of $1.01 billion compared to income of $2.67 billion for fiscal 2000. ®

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Cisco Systems Announces New Organizational Structure

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