20 Slippery Questions With Cisco CEO John Chambers

Chambers On The Record

Partners bet on Cisco, says CEO John Chambers, because Cisco doesn't lose.

In a wide-ranging interview with CRN at Cisco's San Jose, Calif., headquarters this month, Chambers took about 45 minutes of questions. Here are some key topics that emerged.

How Is Cisco Planning Succession?

We've had regular succession planning for two decades, a first wave and a second wave, but that was more "hit-by-the-bus" or I mess up. Now, we're looking at a logical transition occurring, and last year we said three to five years, so guess what, now we're saying two to four. No major surprises there. What's exciting about it is that we have two waves on which we meet with the board on leaders. The first is three or four people, the second is five or six, and that seems like a lot, but really, it's what you need in the pipeline. It isn't just about who's going to be CEO, but who are the three to five people who are really going to run the company. And by the way, no one will be CEO here who would not stay if they weren't one of the three to five running the company.

How Soon Will Chambers Retire?

I'm not going to go down that path. But if I were to answer it very directly, it's more when things are ready. It's more when the opportunity is there.

Will The Next CEO Come From Inside Cisco?

You need to understand that this is a board decision on which I have an influence. I think all of us recognize there are huge advantages coming from internal.

How Will Cisco Signal Its CEO Finalists?

Succession planning should be a non-event. It should just naturally occur, and we know in our industry there are very few of those that have gone well. Whether it's right or wrong -- and I do believe it's right -- we're going to be transparent. You'll see us move around our players, out of silos -- which used to be the way you developed people -- and take a services person and move him into engineering, or put an engineering person into operations. You'll see us move around our team with regular frequency with the job being to not just see who's been in silos, but who does well and who will struggle a bit. That's what leadership is about.

Can Cisco Become The No. 1 IT Company?

I said to a large group of very sophisticated industry analysts recently, how many of you think that we have a chance to not just hit our aspirational goal of being the No. 1 communications company, but the No. 1 IT company and the best business partner for our customers? More than half the room raised their hand. That shocked me. I would have been ecstatic with 10 to 15 percent.

Cisco is uniquely positioned. We've positioned architecture across enterprises and service providers. There will always be a set of tough competitors -- startups and otherwise. If there isn't, that's a bad sign; it means you're not in a good market. The good news is that we anticipate being in a good market for a good little while.

Will Cisco Stay Focused On The Channel?

We have never hesitated in our commitment to partner success. That doesn't go up and down by year; it doesn't go up and down by economic times, or in market transitions. We are a partner-driven company, period.

Will Cisco Compete Well In SDN?

There has never been anything more network-centric than what some people define as software in the data center. I would actually argue that it's a unified data center of the future, made up of hardware and software and ASICs and a unified fabric as well. That will evolve, not just as cloud, but as distributed capabilities throughout the entire network. So when you look at it -- hardware, software and ASICs -- if you execute it right, that will probably win.

Is This Cisco's Generation Of Computing?

This is a fourth generation occurring. The prior generation was servers and ASICs and the players like Intel, and a Dell putting it all together or an IBM or an HP putting it all together. Cisco does those combinations too. But don't think of us in the old model, think of us in terms of the Apple model. Think of architecture and where the differentiation is and how the money is made and compare that to the Android model. That's exactly what we're going to do with this.

How Does Cisco Stack Up To Other Tier-One Vendors?

Oracle, IBM, Juniper, HP, Dell. What is their year-over-year growth? Negative 2, negative 3, negative 4, negative 5, negative 8 percent. And remember two quarters ago, when Intel said we don't see the problems in enterprise spending and the global environment that Cisco's seeing? Four months later, they miss a quarter by $1 billion. There may be no reward for being transparent, but that's who we are as a company. Through all of this, we didn't falter. We led the industry.

In the last quarter, we grew 4 percent. The market had us growing at 4 to 6. Oracle was down 2, IBM down 3, Juniper down 4, HP down 5, Intel down 8, Dell down 8. Tell me: which partner do you want? We're the most partner-centric and loyal and we're the best growth opportunity for them on top and bottom line together. That doesn't mean we don't have to change -- we clearly do. But it means that if you partner with Cisco, you partner with a company that doesn't lose. When we need to reinvent ourselves, we do.

Does Cisco Fear Juniper Or Avaya Anymore?

We told you we were going to beat Juniper. Now they're on the defensive. They're really being challenged now. Avaya, who was going to out-execute us in collaboration, make no mistake: They are struggling. We're beating them very bad.

How About HP?

Hewlett-Packard, which said we were going to exit the data center a year after we got into it, well, there's 22.5 percent market share in North America in UCS for us, and it grew at 58 percent last quarter while our peers grew in single digits. Perception-wise, we hit some rough sledding; we clearly did. We needed to change. But, our competitors went through the same and did much worse. There's not a challenge I'm aware of that our peers didn't have to go through too.