In 2012, Cisco's charismatic CEO John Chambers, announced that he would be retiring sometime in the next two to four years. This started the "Chambers watch," and many of the other Cisco followers -- including Wall St, industry analysts and press -- started to speculate when he might step down.
Well, this morning all questions were answered as we found out some details of the retirement of John Chambers. In case you missed it, those details are:
When: July 26th, 2015. John Chambers will retire as CEO of Cisco at the end of its 2015 fiscal year.
Who: Chuck Robbins, currently Senior Vice President of Worldwide Operations, will become the new CEO.
What next: John Chambers will become Executive Chairman of Cisco and remain Chairman of Cisco's Board of Directors.
Chambers' time at Cisco can't be viewed as anything other than successful. Under his leadership the company has grown from $1.2 billion to almost $50 billion in revenue and is a dominant vendor in over a dozen markets. He has received many honors over the past 20 years, including being named one of Time Magazine's "Most Influential People" and making Barron's World's Best CEO list.
In my opinion, however, if I had to pick one item that defined Chambers' 20-year-run as CEO, it would be Cisco's ability to catch market transitions and become a market leading vendor in a short period of time. Time and time again, Cisco would catch entire industries sleeping, which would enable Cisco to get a huge early-mover advantage -- and by the time everyone else woke up, it was often too late.
The best example of this is when Cisco moved into the communications space through its acquisition of Selsius Systems in 1997. At the time Cisco was known as a networking vendor, and much of the legacy communications industry guffawed at Cisco's move into the telecom space. Cisco jumped on the telephony market aggressively, however, and rapidly gained share and credibility with some big wins at companies like Ford, Dow Chemical and Bank of America. Did the deployments go smoothly? Of course not -- there were plenty of bumps in the road. But while most of the industry was debating whether VoIP was real or not, Cisco was learning best practices and building a business that eventually put them in a market-leading position.
The shift into the communications market had a number of other implications for Cisco and the industry as a whole. First, it tied communications to the network, and that shifted the decision-making authority for telephony from the telecom group to networking where Cisco was dominant. Organizations were buying Cisco communications because they ran a Cisco network, but they weren't willing to switch network vendors in favor of their PBX. This had a profound impact on Cisco's business, as for every dollar customers spent on telephony, they dropped another $3-$5 on network upgrades. The data reseller eventually became the primary channel for voice, and the pure telecom reseller went the way of the mainframe. Truly, communications became the gift that kept on giving.
This is also when we heard the "A-word" from Cisco for the first time and architectures became the name of the game. Cisco's AVVID (architecture for voice, video and integrated data) may be the single best architecture the industry has ever seen, and it became the driving force behind Cisco's push into communications. When I was a reseller, AVVID became synonymous with Cisco telephony, so much so that customers would actually tell me that they wanted to buy AVVID -- and that would open the door to sell a broad solution that no one else could even come close to matching.
Since then Cisco has rolled out many other architectures for security, wireless, cloud, data center and most recently, Internet of Things. Architectures remain one of Cisco's biggest competitive advantages, and it all started with communications.
Over the years Cisco has moved into other areas that people speculated they might fail in, including security, collaboration, data center, servers and storage networking -- but the company has managed to gain market leadership in those areas as well. The John Chambers tenure is defined by market transitions, so it's fitting he leaves on the precipice of capturing new market transitions, including the cloud and Internet of Things.
So what about Chuck Robbins and the role he will play? I've met Chuck a few times, most recently at the company's Partner Summit, and I believe he is a great person to transition the business to. First of all, he's been at Cisco for 17 years now and is currently responsible for worldwide operations and the partner organization. This is the engine behind the Cisco machine, so I don't expect any disruption to the momentum that the company currently has.
Within five minutes of meeting Chuck you can tell he's a high-energy person who brings a tremendous amount of enthusiasm and passion to the job, and I expect that to carry over to his role as CEO. Also, the feedback I've had on Robbins is that he is a "glass is always half full" kind of person, where no issue is too big to solve. Customer or channel partner has some concerns? No problem, let's go fix it.
I'll personally miss the interaction with Chambers and even just watching him roam around the audience during his keynotes, but I'm looking forward to this next era of the company. Becoming the No. 1 IT vendor is certainly within the organizations reach; the product is aligned well, and now it takes execution -- certainly a strength of Chuck Robbins.
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