Major Restructuring At Cisco Emphasizes Technologies

Cisco Systems announced late Thursday it is restructuring its business around engineering and marketing units that will focus on almost a dozen technologies.

The reorganization is the biggest since the San Jose, Calif.-based networking company changed its structure almost four years ago around the competitive markets of the enterprise, service providers and the small and midsize business market.

"Our line of business structure has served us very well in the past when customer segments and product requirements were very distinct," Cisco CEO John Chambers said in a statement. "Today, the differences have blurred between these customer segments, and Cisco is in a unique position to provide the industry's broadest family of products united under a consistent architecture designed to help our customers improve productivity and profitability."

The reorganization does not involve layoffs, but one high level executive has resigned. Kevin Kennedy, formerly senior vice president of the service provider line of business, is leaving Cisco after eight years to pursue external opportunities, according to the company. In the future, Kennedy will be an industry and technical advisor to Cisco.

No changes have been made to Cisco's sales structure and channel partners should not notice too much difference in their regular operations with the company, according to Charlie Giancarlo, formerly senior vice president of the commercial line of business.

Giancarlo will now run four of the technology groups and report to Mario Mazzola, who has been named chief development officer.

In that position, Mazzola, an eight-year Cisco veteran and formerly senior vice president of Cisco's new business ventures group, will oversee the 11 new technology groups that now make up Cisco's engineering organization. He will report to Chambers.

Michelangelo Volpi, who has been Cisco's chief strategy officer, will be in charge of the largest technology area, Internet switching and services. Volpi will report to Mazzola.

James Richardson, formerly senior vice president of the enterprise line of business, will be the chief marketing officer running Cisco's marketing operation. Richardson will report to Chambers. Organizations within marketing will focus on service providers, enterprise and the small and midsize business market, as well as other vertical markets.

The structure will focus on 11 technology areas--access, aggregation, IOS technology, Internet switching and services, Ethernet access, network management services, core routing, optical, storage, voice and wireless.

Cisco's sales have declined sharply because of turmoil in the service provider industry and because enterprises have curtailed IT spending.

Giancarlo says Cisco's reorganization reflected changes in buying patterns that have become apparent as the market has reached a more stable point.

"The world is a different place than it was a year ago," Giancarlo says. "We couldn't have done this in January. Now we understand better what the world looks like."

He says in the future, service providers will be buying different networking equipment that will focus more on giving customers access rather than building out infrastructure.

Buying patterns among enterprise businesses have not changed so dramatically, Giancarlo says.

"The enterprise has just had a little hiccup," he says. "It's coming back."

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