Cisco's commitment to change

After last year, it's essential to survive and separate from competition

Cisco is beating back the competition. So says CEO John Chambers during his morning address at the 16th annual Cisco Partner Summit in San Diego.

"I'm not so sure the competition is getting tougher," he told the crowd of Cisco resellers and marketing associates. "It's not as tough as it was a year ago."

Some in the crowd agreed when he took a show-of-hands poll. Some also disagreed with him. From our limited vantage point, the show-of-hands looked about 50:50.

Chambers, of course, was referencing the past 12-18 months, when Cisco went through a dramatic restructuring after the company got, in his words, "fat." Cisco trimmed more than 12,000 positions, killed or downscaled underperforming product lines and markets, simplified operations and got mean - at the competition.

This week he provided a snapshot, through the Cisco lens, on where that competition now stands.

"Juniper and HP are not any tougher than they were a year ago," he said. Juniper, he said, is guilty of "marketing ahead of where they were, spreading themselves too thin."

Juniper's undergoing some challenging product transitions in data center switching and core routing.

He said Cisco's Unified Computing System blade server growth last quarter - 91% year-over-year - and Cisco's increasing data center share is at HP's expense.

"We're taking huge share from HP in the data center," Chambers claimed.

The one competitor he did not mention was Huawei, which Chambers last week identified as Cisco's toughest. He went so far as to accuse Huawei of "not playing by the rules," which touched off a war of words between the two companies.

Such is the mean streak of the usually charming, gracious and politically correct Chambers. He's a Southern gentleman with usually a humble respect for competitiors - until they threaten Cisco's profits.

"I wish I was a better person but I'm not," he said of his competitive aggression.

But Chambers' hand was forced. His and Cisco's healthy paranoia regarding the competition changed to rage after the challenges of fiscal and calendar 2011. And that change will continue, be ongoing, he pledged.

"We got knocked on our tail last year" he said. "We've got to constantly reinvent ourselves. If we don't change, we don't make it through these (market) transitions. Average is over."

Chambers said change is essential for survival. He said he's watched great companies get to the top and then fall because they didn't change - in this instance, listening to customers and business partners. He said companies in the Fortune 500 usually stayed there for 75 years, then that was trimmed back to 15, and now less than 10.

"If we don't change, we'll get left behind," Chambers said, reflecting on the recent fluidity he says is now common in the Fortune 500 lineup. Such change, he says, is evident in Cisco's effort to become simpler to do business with, at which time he took another show-of-hands poll on whether Cisco's simplification efforts have been successful.

Again, the response was 50:50 on whether Cisco is simpler to do business with or not. An equal number of hands showed when he asked the audience if nothing had changed in that simplification effort.

If anything's changed, it is Cisco's mood after a year of tumult.

"We're going to be very aggressive on where we're going to go," Chambers said. "How do we become the most trusted IT partner our customers have?" 

More from Cisco Subnet:

Meet Cisco/Insieme's recruiter

Cisco poaching rivals for SDN spin-in

Cisco incubating software-defined network startup?

Cisco's collaboration jab

Cisco losing router sales to HP?

Cisco helps user welcome BYOD 

Cisco's NDS purchase more than TV

Cisco: "We've never been more relevant"

Cisco: Customers drove us to block Microsoft/Skype

Critical milestones in Cisco history

Follow all Cisco Subnet bloggers on Twitter.Jim Duffy on Twitter

Follow

 
Join the Network World communities on Facebook and LinkedIn to comment on topics that are top of mind.

Copyright © 2012 IDG Communications, Inc.