Cisco will be leaner, faster, more attentive, Chambers pledges

Network World - LAS VEGAS -- Cisco CEO John Chambers briefly addressed the company's current challenges, restructuring and imminent layoffs during his keynote address at this week's Cisco Live customer conference.

Cisco may shed 5,000 and perhaps up to 10,000 positions early in its fiscal year 2012, which begins in August. The company is looking to cut $1 billion in expenses and dump unproductive or non-core product operations after consecutive quarters of uninspiring performance.

Cisco has lost share and profits in switching, and its foray into consumer electronics has been disappointing. Many blame ambitious incursions into adjacent markets through 145 acquisitions over two decades, which distracted the company from its core routing and switching business, as well as a bloated management structure that stalled decision making.

Chambers promised the audience changes.

"We are continuing to reinvent ourselves," he said during his address. "We are looking at how to streamline to move a bit faster in the future. We were too complex (in innovation). We are making changes to move at a faster pace."

The changes will help Cisco innovate faster, Chambers said. That means new products should get into the hands of customers faster. He also promised a Cisco that's easier to do business with and more attentive to customers.

Cisco has come under fire recently for being heavy handed in customer relations.

"You ask, we deliver," Chambers told the customer-heavy audience of 15,000. "We've got to be easier to do business with, include you in driving our product direction, share our roadmaps, have an easy to use product portfolio. But innovation is the buzzword on where we're going to go."

In the past six months, Cisco announced 85 new products. But it also streamlined its operations and re-focused the company on five core areas of product development: Routing, Switching, Security and Services; Video; Collaboration; Data Center/Virtualization/Cloud; and Architectures.

Routing and switching is the bedrock of the company but, why these five?

"Collaboration will be the driver of productivity," Chambers said. "Data center/virtualization/cloud is the most network-centric architecture. Architectures are the way you tie products together. And video is the next voice."

Chambers said there are 20 million meetings per month hosted on Cisco's WebEx application, and that the company is "putting video into everything we do architecturally."

Cloud will be the next IT architecture where everything is virtual, Chambers said. Traditional IT vendors did not move quickly into cloud or data center convergence for fear of losing server and other IT product sales, he said.

Cisco capitalized on that by releasing its Unified Computing System, which allowed it to quickly become the third leading vendor of blade servers.