CRN Podcast: What's Causing Cisco's Woes?2:50 PM EST Fri. May. 13, 2011
Cisco Systems has endured tough times before, but the networking giant's current tribulations may prove to be the toughest test yet for CEO John Chambers.
Cisco announced its third quarter earnings Wednesday and delivered some bad news: earnings were down more than 17 percent year over year, and its fourth quarter outlook was downright grim. The company said it expects revenue to be basically flat, and Chambers backed off Cisco's regular target of 12-17 percent annual sales growth for this year.
As a result, Cisco plans to cut $1 billion from its budget, and analysts are projecting heavy job losses for the company – perhaps the biggest layoffs in Cisco's distinguished history.
The third quarter earnings call also capped off a troubling period for Cisco. The networking leader has experienced a number of high profile executive defections to competitors such as Juniper Networks. Meanwhile, Cisco's consumer business has struggled, and the company took substantial heat when it shuttered its Flip video camcorder business last month.
So what exactly is ailing Cisco these days? CRN's Rob Wright and Chad Berndtson discuss the company's recent struggles and examine some of key missteps that have caused Cisco to stumble as well as some of bright spots that may keep Chambers off the hot seat.
Also in this CRN podcast, Wright and Berndtson look at Microsoft's $8.5 billion acquisition of Skype and talk about what it will mean for Microsoft's channel partners as well as millions of loyal Skype users.