Partners: Giancarlo Departure Won't Hurt Cisco - Yet


Charles "Charlie" Giancarlo, picked by many to succeed John Chambers as the CEO of Cisco Systems, resigned this week from his post as executive vice president and chief development officer for the San Jose, Calif.-based networking powerhouse.

Giancarlo, 50, will leave Cisco at the end of the month for a managing director position at Silicon Valley technology investment firm Silver Lake, one of the two firms that partnered to acquire Avaya earlier this year.

Yankee Group senior vice president Zeus Kerravala said Giancarlo's departure after 14 years with Cisco could leave channel partners and customers scratching their heads.

"It may make customers and channel partners ask what's going on in the senior ranks," he said. Short-term, however, Kerravala said the channel would see little impact.

Giancarlo's departure comes just weeks after Cisco named Padmasree Warrior, Motorola's former CTO, as its top technology officer. Warrior joined Cisco as CTO Dec. 4, a position that had been vacant since it was last held by Giancarlo in 2005.

Giancarlo's resignation follows that of Mike Volpi, Cisco's former senior vice president and general manager of the routing and service provider technology group, who was considered a top contender to take over for Chambers before Giancarlo. Volpi left Cisco earlier this year to join Joost, an Internet video service.

"It's a big loss for Cisco," Kerravala said. "This is a little like Captain Kirk commanding the Enterprise without Spock. Cisco is still strong, but they were stronger with Charlie."

Mont Phelps, CEO of NWN, a Waltham, Mass.-based solution provider that does most of its business with Cisco solutions, said he was surprised by Giancarlo's departure, but doubts the channel will see any immediate impact.

"He was the architect of a lot of the products and systems they were bringing to the market," he said, adding that he is less concerned with who comprises Cisco's executive team than the solutions they offer into the channel. "My interest is more in the products, services and business opportunities for the channel, and Charlie was a big part of that."

Phelps said Cisco is resourceful enough that whoever takes over Giancarlo's tasks will be able to pick up where he left off and that the impact, if any, won't be felt in the short term.

"Cycles are such that the impact won't be felt for a year or two, and in this business that's a long time," he said. "Cisco will continue to pursue along the track it was on with Charlie. Down the road we'll see what the next track of products is. The direction is already set for the foreseeable future and they'll keep driving on."

Phelps said his only concern is that Giancarlo's new position with Silver Lake could spark more heated competition for Cisco between Avaya and any other company Silver Lake could acquire.

"My concern would be more along the lines of if he'd be involved with things that could compete with Cisco," he said. "You always want Charlie on your team rather than on the other side. But at our level, one person leaving, I don't see that as being something that would derail what we're doing."

Kerravala said one theory behind Giancarlo's departure is that he realized Chambers would be around for a while, lessening his own chance to become CEO.

Phelps agreed, noting that Chambers "isn't going to share the spotlight."

In a conference call, Giancarlo said the decision to leave was "very difficult," but noted that he made the decision with his next 10 years in mind. Chambers said he wouldn't fill Giancarlo's vacant CDO slot and noted that he will likely decide on his own successor in three to five years.

With Giancarlo gone, however, Kerravala said it is unlikely that Cisco's development and innovation will suffer anytime soon.

"They won't suffer in the short term. Those decisions were made years ago," he said. "But Charlie had great vision, so depending on who they bring in, yeah it could suffer. But the net of it is that Cisco is ok in the short term."

Giancarlo joined Cisco through the acquisition of Ethernet switch maker Kalpana. He initiated and led Cisco's SMB activities which included contributing to the development of Cisco's channel strategy. He also started and led a number of Cisco's advanced and emerging technologies like unified communications, home networking, wireless networking, security, video and TelePresence. More recently, Giancarlo was charged with overseeing Cisco's acquisitions and masterminding their strategic alliances with other tech giants like IBM and Microsoft.

In recent weeks, Giancarlo also played a major role in Cisco revamping its technology development organization, a move to help Cisco capture new software business and better integrate it's product lines. The reorganization consolidated several of Cisco's technology engineering groups into four larger business groups to bring more efficiency to product development. The four groups created under Cisco's Development Organization are the Software Group, the Data Center Switching and Services Group, the Access Networking and Services Group and the Consumer and Small Business Group. Cisco also formed a new development council that Giancarlo was to chair. At the time Giancarlo said the reorg was not directly related to Warrior's hiring as CTO.

That development council will take over Giancarlo's role.

--Additional reporting by Reuters.