Feeds

Cisco CEO: 'We have disappointed our investors'

John Chambers outlines turnaround strategy in lengthy memo

Security for virtualized datacentres

John Chambers has led Cisco into becoming too broadly spread, undisciplined and caused three quarters of poor results disappointing investors. Now he wants to turn the tide and get Cisco back on track.

The company's performance in the past three quarters has gotten Cisco to the point where Chambers has had to do something exceptional, and that is nothing less than a call-to-arms memo. The memo was published outside the company to reassure employees, customers, investors and partners that Cisco's self-inflicted disease has been diagnosed and a treatment regime is being planned.

Chambers' long memo identifies a few problems with the computer networking company. According to the memo, Cisco needs to simplify processes for employees, and to install discipline. Chambers sums it up by saying: "We have disappointed our investors and we have confused our employees."

He asserts that Cisco's core strategy is correct and then points to operational issues as the problem area: "It is aspects of our operational execution that are not [sound]. 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."

Chambers recently appointed Gary Moore as the chief operating officer, and his memo mentions Moore and indicates that the new COO will be helping drive the changes Chambers says are needed.

Five focus areas

The company's five focus areas are laid down: "Our five company priorities are established: leadership in core routing, switching and services; collaboration; data centre virtualisation and cloud; architectures; and video."

Then Chambers goes into "tough decisions" mode: "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 measurable way. We will address with surgical precision what we need to fix in our portfolio and what we need to better enable."

In other words, some products are liable to get chopped because they aren't delivering the goods. The internal processes that enabled such crap products to get out there are going to have to be fixed as well. Chambers does not say in any detail what will be done and in which areas products will be scrapped, but there is a thumping great omission from the five priority areas above: home or consumer products. That is clearly not a focus area.

This means that ūmi telepresence, Valet and Linksys home networking, Flip video and cable set-top boxes now have question marks over their status.

Chambers also says that Cisco faces great competition in switching: "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 leave or devalue this business. "

Providing a secure and efficient Helpdesk

Next page: Strategy questions

More from The Register

next story
IBM storage revenues sink: 'We are disappointed,' says CEO
Time to put the storage biz up for sale?
'Hmm, why CAN'T I run a water pipe through that rack of media servers?'
Leaving Las Vegas for Armenia kludging and Dubai dune bashing
Facebook slurps 'paste sites' for STOLEN passwords, sprinkles on hash and salt
Zuck's ad empire DOESN'T see details in plain text. Phew!
Windows 10: Forget Cloudobile, put Security and Privacy First
But - dammit - It would be insane to say 'don't collect, because NSA'
CAGE MATCH: Microsoft, Dell open co-located bit barns in Oz
Whole new species of XaaS spawning in the antipodes
Symantec backs out of Backup Exec: Plans to can appliance in Jan
Will still provide support to existing customers
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.