Chambers: We Should Have Killed Cisco Cius Earlier

CEO says company should have pulled plug on failed tablet 9 months before it did

SAN DIEGO -- Cisco should have shuttered Cius nine months before it did, CEO John Chambers told reporters at the CiscoLive! conference here this week.

Cisco ceased Cius development two weeks ago, less than a year after it shipped, after the business tablet fell victim to the cloud and BYOD trends affecting enterprises. Cius was to be an all-in-one collaboration endpoint for enterprises but it was quickly overtaken by Apple’s iPad in businesses, which workers typically brought in from home.

Sixty-three percent of the tablets used in enterprises are iPads, said OJ Winge, Cisco senior vice president and general manager, Collaboration Endpoints Technology Group, in an earlier panel session at CiscoLive!

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“Once you realize you’re not going to reach the volumes you need, you should just stop,” Chambers said when asked what lessons Cisco learned from the demise of the Cius. “We should have made our decision to exit the Cius market nine months ago,” he said, when Cisco started recognizing the momentum of the iPad.

The Cius experience, though, lives on. In killing Cius, Cisco said it will instead focus on developing collaboration software, like its Jabber client, for a variety of mobile platforms.

“That exact experience is now what we call the Jabber platform,” said Rob Lloyd, Cisco executive vice president of worldwide field operations. “We just opened up the software to run as a soft client experience across multiple devices because that’s where the market is going.”

On collaboration in general, Chambers mentioned twice in his keynote address earlier in the day that Cisco’s collaboration business needs to improve. The business was flat in Cisco’s fiscal third quarter due to market dynamics and lack of execution.

“We did not agree as crisply as we should have on strategy, what was our architecture to get there, and then what is our multiple phase roadmap to get there,” Chambers said. “You’ll see us go back to the basics and consolidate collaboration under one group and prioritize what we want to do or not. You’ll see us come down to a very simple definition of collaboration. It’s built around four pillars: mobile, social, virtual, visual. And then you’ll see us pull these pieces together in order of priority. It’s a harder sell and we’ve got to make it simpler to sell. We also need to be faster on feature acceleration. People expect that on key features and capabilities. It needs to be easy to work together. One-click to TelePresence, etc.”  

And it has to be multi-platform, Lloyd stressed.

“The operating system on the desktop is no longer one we should take for granted,” he says. “We need to make that experience available on any operating system, all operating systems.”

That’s something Microsoft should take a cue from, the Cisco executives suggested. While they await the European Union’s decision on Cisco’s appeal of the Microsoft/Skype merger, Cisco’s leaders will continue to hammer away at their collaboration rival.

“Our largest competitor, focused on not having open standards and interoperability, plays to a huge advantage for us,” Chambers said. Just different phones can support a call, “same thing with video. You’ve got to be able to across the whole (suite) in collaboration.

“I do think they made a mistake on interoperability, which is what they demanded (from us) with Tandberg,” Chambers said, referring to Cisco’s multibillion dollar videoconferencing acquisition in 2009.

Cisco has often referred to video as “the next voice.”

On other topics, Chambers addressed an inquiry on Cisco’s leadership succession plan, or who’s next to head the company after Chambers. He said Cisco will not falter when it comes time to tap and new CEO.

“Well run companies always have succession plans,” he said. “This is my family. Cisco won’t have a stumble. We’ll make sure that transition goes very, very well.”

On competition, he and Lloyd both dismissed Alcatel-Lucent’s new core router, the 7950 XRS, as another edge router. Alcatel-Lucent usually flip flops with Juniper as the No. 2 or No. 3 edge router vendor to Cisco.

“The core router they announced is an edge router,” Lloyd said. “It has no scale, no multichassis capability. They’re looking for a plank of innovation” in the face of financial difficulty.

On the market adjacencies Chambers used to boast about during his keynote addresses as recently as 18 or 24 months ago – 30+ such adjacent opportunities – Cisco has become much more focused so they’re not mentioned anymore.

“We took on too many opportunities, we cast our net a little too wide,” he said. “We needed to combine those projects earlier” to avoid overlapping groups in the same products areas, like switching, routing, etc.

Cisco is now focused squarely on its five market priorities: routing, switching and services; collaboration; data center virtualization and cloud; video; and business process architectures, and on extending security and mobility across all of them. Chambers did, though, rattle off markets like smart grid and smart+connected communities as ancillary opportunities to the core five.

“We’re staying within our silos and then prioritizing,” Chambers said. “We’re a much more focused, hungry, competitive Cisco. The level of trust from customers has been the highest it’s been.”

And on recent reports that Cisco products are being sold into countries the US has barred such sales to – like Iran:

“We do not put products in countries we not supposed to be exporting to,” Chambers said. “Partners doing that will be terminated.  There’s no gray here, the answer is no, no, no, and no.”  

Jim Duffy has been covering technology for over 25 years, 21 at Network World. He also writes The Cisco Connection blog and can be reached on Twitter @Jim_Duffy.

Copyright © 2012 IDG Communications, Inc.

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