Cisco Live! kicked off on the morning of July 12 in Las Vegas. Obviously with all the controversy and speculation surrounding Cisco over the past year, all eyes were on the Chambers keynote to get some idea of what the "new Cisco" looks like. Overall, I thought Chambers did a good job of outlining the direction of Cisco but I did think there were some open questions that still lingered.
From an overall corporate standpoint, Chambers stated that the next generation of Cisco has three main corporate priorities. They are:
* Deepening customer relationships
* Faster innovation
* Simplified operations
These all make sense, but Chambers summed up what this means to Cisco nicely by saying that "the speed of decision is the number one thing I want to see improved". This is a curious statement since the "boards and councils" model of running Cisco was supposed to be the thing that sped up decision making. From my conversations with Cisco leaders over the past year or so, it appears that the boards and councils approach ran its course and now it’s time for a change.
So that brings me to unfulfilled question #1--If the current management model isn’t creating fast enough decisions, what’s changing to speed up the process? This wasn't clear to me at all when the keynote ended but I did have the opportunity to talk to Cisco COO Gary Moore afterwards, and I asked him the question. It appears that Cisco will be using a combination of top-down and boards and councils to drive next generation Cisco.
Cisco will maintain three councils: enterprise, service providers and emerging markets. Each council will be co-run by two people and these two will be accountable for the success of each. From what I understand, Cisco will amp up the level of accountability for the council leaders and other executives at Cisco. Will this speed up the decision-making? Only time will tell, but the bureaucracy that was caused by the old model will be gone, so it should have the desired effect.
The next area that Chambers discussed that left some open questions was around product strategy. He outlined the top 5 areas for Cisco:
* Leadership in the core. This was defined as routing, switching, services, security and mobility
* Collaboration
* Data center/virtualization and cloud
* Video
* Architectures
This kind of clarification was good to see. I would agree that Cisco should be able to dominate these areas, but it did leave a couple of questions.
First, what's in and what’s out? Chambers has stated that they will be looking at each business unit and then exit markets they shouldn’t be in. So what are those areas? Also, what about market adjacencies? Last year they were focusing on more than 30. What's the right number? What are they?
Cisco Live isn't the best forum to answer these questions so I'll accept the fact that these questions don't have to be answered at their user conference, but they do need to be answered soon.
The next question that I thought needed answering was around M&A strategy. This was prompted by a comment that Chambers made regarding having a desire to make more technology work better together faster than before. If this is to come true, the traditional Cisco acquisition strategy of buying small companies and then integrating them into the Cisco machine won't work. They either need to do more big acquisitions or build more internally. It's not clear which will be the direction but I'm betting on more big acquisitions.
The last area that I felt needed better definition was regarding how Cisco is changing as a company. Chambers put up a slide that showed Cisco through the ages. In the first era, which lasted from 1985-2001, Cisco was a company built on innovation. The following wave, 2001-2011, Cisco was focused on Integration. The next wave, which will last from 2011-2016, Cisco will build its leadership around simplification. The most immediate question was why this phase is only five years? I asked Chambers himself this question and he stated that he purposely made it only five years so the leadership at Cisco would start thinking about how to transform Cisco in 3-4 years and proactively change the company, versus reacting to adverse market conditions. I thought that was a fair answer.
The other question, which I didn't get an answer to was, what's next for Cisco? Innovation to integration to simplification.... What's after that?
In summary, while I still have some open questions around Cisco and its short and long term outlook, it's clear that if Cisco executes on what Chambers talked about today, the company will be a much leaner, focused execution machine. In my mind, these changes plus a few more answers should give customers confidence that the company is pointed in the right direction.
