When Cisco CEO John Chambers considered buying Research in Motion, and other business decisions

Cisco CEO John Chambers considered buying BlackBerry maker  Research in Motion in 2005 but decided

against it because he didn’t want Cisco to be selling consumer devices, according to Forbes Magazine’s cover story on Cisco. The article charts the moves of Chambers whose bonus check in 2002 was a mere 38 cents – a reflection of Cisco’s stock plummeting to $10 during the dot-com crash. While pundits say Cisco’s bread-and-butter networking gear business is turning into a commodity, Forbes cites Cisco as saying that that business is far from dying – by  2012 businesses, governments and research labs will be spending $85 billion a year just on the gear to keep their online infrastructure up and running, according to Cisco. Meanwhile, Chambers continues to find new ways to rake in more cash for the company, including a period in 2005 when he considered purchasing RIM.

The article gives a 30,000-foot view of Cisco’s new products, such as the Nexus 7000 and its place in the market – all this you’ll no doubt be familiar with – but the article also describes how some of Chambers’ moves haven’t made him many friends. Forbes describes Cisco’s strategies for ‘spin-ins.’ An example is data storage company Adiamo, which was started by several ex-Cisco employees who were given $84 million to set up the company. Cisco later acquired the 300-employee-strong company for $750 million.

According to Forbes:

“John made 300 people rich, but he pissed off 25,000 other people,” said one former executive. The so-called spin-in company may have been hard to justify by Andiamo’s tiny revenue. Placed back inside Cisco it has made several billion over the years, however, and kept Cisco’s research and development costs low.

In July 2005 those stars of the storage spin-in left Cisco again, ostensibly for retirement. By October they had started a company with Cisco money called Nuova Systems, joining one of the founders of VMWare and an early star at server company Sun Microsystems (nasdaq: JAVA – news – people ). Their goal was to create an operating system that could span an entire data center, taming the confusion in one box.

And the rest is history (see the story links below).

Not everyone at Cisco is widely happy with spin-ins, as this quote in the article attributed to Jayshree Ullal, a former Cisco rising star, suggests: “Spin-ins are a creative model to accelerate innovation and bring in engineers you couldn’t normally recruit–and financial gains go to entrepreneurs, not venture capitalists … But it’s a nightmare when the guy in the next cubicle is a multimillionaire and you aren’t, because you weren’t chosen.”

Overall the article is an interesting read, if only to remind yourself of the powerful position Cisco is in as its gear controls most of the Internet.

Cisco’s Doug Gourlay has today written his view of the article in his blog and hints at an announcement next week around Cisco’s NX-OS platform used in the NeExus boxes.

More about Nuova:

Cisco acquires Nuova, unveils data center switch

Cisco completes Nuova buy

Is Mario Mazzola stepping back into his old Cisco job?

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