Cisco Reorg: Setting Stage for CEO Successor

Cisco Systems (CSCO) first spoke about its latest reorganization in August 2014, during the company's quarterly earnings call. Now, the reorganization -- which will include about 6,000 jobs cuts -- is under way. The big question: Where is Cisco's long-rumored CEO succession plan for John Chambers? I sense that it's drawing closer.

As you may recall, Chambers about two years ago said he planned to retire somewhere between 2014 and 2016. Roughly a dozen internal executives were allegedly on the CEO candidate list. But I never believed that figure, preferring instead to focus on Chuck Robbins (a sales pro) and Rob Lloyd (Chambers' right-hand man at briefings) as the two potential top candidates.

New Reorg, New Speculation

By the summer of 2014, rumors popped up that Chambers planned to retire in the fall of 2014. Now, along comes the reorganization plan. Isn't that a great time to work in a CEO change, too?

Well, perhaps not. My bet is Chambers wants to wrap up the reorg then announce his successor. In addition to my two picks (Chuck Robbins and Rob Lloyd), some pundits have added Soni Jiandani's -- known as Cisco's serial entrepreneur -- to the CEO candidate shortlist.

Chambers' Legacy

No doubt, Chambers is well-respected within Cisco and across Silicon Valley. During our first meeting around 1994, Chambers was a senior VP and I was an emerging reporter at InformationWeek. Fast-talking and direct in his communications, Chambers described how his experiences at IBM and Wang -- for better or for worse -- would ensure that Cisco never got complacent.

Chambers has been Cisco's CEO since 1995. The company enjoyed explosive revenue growth in the 1990s by extending from routing to switching. But the 2000's to present haven't been as kind, despite moves into telepresence, security and more:

Explore more CSCO Data at Wikinvest

Hits, Misses and Changes

For the past decade, Chambers has repeatedly told investors and customers -- and me -- that Cisco has the unique ability to catch market inflection points and ride new waves before other rivals spot them. In reality, Cisco has been hit and miss:

  • Consumer initiatives and corporate tablet initiatives have largely failed.
  • Converged data center (servers, storage, networks) has gone extremely well.
  • Telepresence has been hit (early on) and miss (more recently) as businesses increasingly shifted to "good enough" or free online video services.
  • The jury is still out Cisco's Intercloud strategy.

New Reporting Structure... And Then...

Amid the latest Cisco reorg, a spokesperson told ZDnet:

"Of Cisco’s approximately 25,000 employees in the development organization, many — but not all — have  new reporting lines as part of our overall effort to align our business to priority areas."

I wonder when everyone at Cisco will ultimately have a new boss -- as in, a new CEO. I sense that the time is drawing closer.

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