With Cisco’s long-time visionary John Chambers planning to step down as executive chairman, CEO Chuck Robbins will gain more control to steer the company’s growth in a changing market focused on cloud technology.

Cisco Systems Inc. CEO Chuck Robbins will add the executive chairman role to his title, solidifying his position as he tries to remake the business that John Chambers built into one of the largest companies in the technology industry. In one new twist, Cisco is running a video on its corporate website’s home page featuring “Game of Thrones” actor Peter Dinklage dryly commenting on the importance of a more effective internet infrastructure.

Cisco's website features 'Game of Thrones' actor Peter Dinklage commenting on the importance of a more effective and secure internet infrastructure.

Chambers will not stand for re-election to the post of executive chairman in December, the company said Monday, ending more than two decades of leadership at the networking company. He first joined the board in 1993. Robbins, who has been CEO since 2015, will assume that role.

Chuck Robbins, CEO,
Cisco Systems Inc.

The change gives Robbins more complete control to steer Cisco, the biggest maker of equipment that forms the backbone of the internet, away from its reliance on the high-priced hardware, which provides most of its revenue. Under Chambers, who served as CEO of the company from 1995 until 2015, those products helped raise Cisco’s annual sales from $1.2 billion to nearly $50 billion. That surge stalled as the networking industry changed, and Cisco hasn’t had a double-digit percentage year of revenue expansion—typical under Chambers’s early leadership—since 2010.

“They were doing great until the whole industry started to transition,” said David Heger, an analyst at Edward Jones. “Among hardware companies, they seem to be managing it well but it’s going to be multiple years.”

advertisement

As CEO of Cisco, Chambers, 68, was one of the most prominent spokesmen for the boom that transformed the internet into a network that redefined how people work, conduct commerce, communicate and get entertainment. He charted the rise that briefly made Cisco the world’s most valuable company and later navigated it through the dot-com bust, the financial crisis and the advent of a fresh crop of competitors that are creating less-expensive ways to design and manage computer networks.

Robbins, who assumed the CEO role in July 2015, has struggled to fire up sales as the industry shifts to computing in the cloud—remote data centers that provide services over the internet. Owners of such facilities like Amazon.com Inc.’s Amazon Web Services are increasingly building their own hardware and replacing traditional suppliers of servers, storage and networking. That leaves fewer purchases of internet routers and related technology products that companies use to connect their technology systems to the internet.

In response, Robbins is trying to make Cisco’s products do more for its customers by adding software management capabilities and stand-alone services provided over the internet. Much of that effort is coming through a string of acquisitions, such as the August announcement of its $320 million purchase of Springpath Inc., a provider of software used in data centers. Cisco and Springpath have worked together since early last year to develop the Cisco HyperFlex data storage and computing platform. Software and subscription deferred revenue is now more than $5 billion, Robbins said during the company’s last earnings presentation. That represents a gain of 50% from the same period a year earlier.

Cisco is also building its image—promoted in a video on its corporate website featuring “Game of Thrones” star Peter Dinklage—as a provider of technology for a next-generation internet that incorporates countless numbers of internet of things sensors and uses built-in software systems to automatically improve how internet data is routed and delivered, and protected from cyberattacks.

advertisement

At its annual meeting in December, the board is expected to reduce its size to 11 members, 10 of whom will be independent directors, Cisco said. The company has a mandatory retirement age of 70 for board members.

Cisco shares, which gained about 7 percent this year, were little changed at $32.57 at 11:24 a.m. in New York.

Sign up for a free subscription to B2BecNews, a twice-weekly newsletter that covers technology and business trends in the growing B2B e-commerce industry. B2BecNews is published by Vertical Web Media LLC, which also publishes DigitalCommerce360.com, Internet Retailer and Internet Health Management.

Follow us on LinkedIn and be the first to know when new B2BecNews content is published.  

advertisement
Favorite