The phones were ringing this morning after Cisco Systems made the announcement that it was discontinuing the Flip Video Camera business. Cisco will be laying off 550 workers and taking a $300 million dollar charge. It seems Chambers is serious about getting back to its roots of routing and switching, but the big questions is what or who is next?
Looking at the products that have not gained ground on the competition I would think optical and WAN acceleration would be next. Ciena is leading optical networking gear and Riverbed claims it is ahead of the market share competition in WAN acceleration (at least according to one analyst market share report). Could the Cisco application delivery controller be the next to go?
On instant messenger this morning the question was who would take the fall for all of the problems, the lost focus and the push to more consumer products. The name that was brought up more and more was Padmasree Warrior. Many Cisco purists see her as the reason for the change in focus at Cisco and the reason Cisco has lost market share to other vendors.
Is it time for Chambers to bring in someone else who will focus on the core business and not the consumer? I think so. Cisco needs to be what it is and not a shop that sells everything, they just proved that with the Flip. Just buying a company and sticking a Cisco label on it won’t make it great. Yes, Cisco customers will still buy it since they are receiving huge discounts, but partners are not so sure with better vendors and products out there.
Also as I wrote about before, Cisco needs to fix the problem of customers getting the better of them in the discount game. Could Cisco be giving huge discounts to customers to make up for these problems such as lack of focus in routing and switching and not having the top rated products? When Chamber made his statement about the changes at Cisco, I wonder if he thought about this and that he really owes it to shareholders to make more money for them. Selling products at huge discounts to make sure everyone buys Cisco is not the answer, having products that are tops in their area are. He needs to fix his product problem first then move on to the discount problem.
Being a former partner of Cisco I have seen the problems, the loss in focus and the constant passing of the buck either in sales, engineering or product. The main reason I left Cisco as a partner was because I was tired of having people call me to ask why I don’t sell all of the Cisco products. Well as you can see just by listing three of them, why would you sell and market something to your customer that you don't believe is best for their network? I couldn't do it. Chambers has a very large task in front of him to get back on track, I hope that he calls in some help from the outside to get recommendations. Before you ask, yes my list of recommendations would be long.
With the likes of HP ProCurve, Arista Networks, Juniper Networks, F5, Riverbed and Ciena competing and sometimes beating them, Chambers has a long road to climb to get his company's reputation back on top. I hope he succeeds and brings Cisco back to its routing and switching roots.