John Chambers: 10 Bold Proclamations On Cisco's Present And Future

Chambers Championing Cisco

Cisco CEO John Chambers was feisty, excited, bullish and, at times, unusually harsh toward competitors during his company's second-quarter earnings results conference call Wednesday. Although his enthusiasm was well deserved following Cisco's best overall fiscal quarter in more than a year, with gains across the board, some of his rather off-the-cuff comments where definitely notable.

Here are some of the more noteworthy comments Chambers made on the conference call.

10. Update On His Retirement

Chambers in 2012 said he might retire within two to four years, but he has offered few details since. He was asked for an update on his retirement plans during the conference call, but offered no new information.

"The next time you hear about any talk about the change will be when we announce that; that hasn’t changed overall," said Chambers. "We have got an amazing team … we will make this a non-issue as we make the transition."

9. Cisco Is Strongest It's Ever Been

"The Cisco brand is as strong as it’s ever been," Chambers boldly stated.

"Our results this quarter, which were the best results in three years in terms of balanced growth across all of our geographies, products and segments, reflect the increased relevancy of Cisco around the world," said Chambers.

8. Cisco's Application Centric Infrastructure Is Winning

Chambers said ACI customers are growing each quarter and will become "the cornerstone of the next generation" of networking architectures for years.

"The market has recognized the benefit of ACI as compared to PowerPoint concepts of aspirational competitors," said Chambers. "We are pulling away from our competitors and leading in both the SDN thought leadership and customer implementations."

7. No One Is Better Positioned For IoE

Cisco is betting big on the Internet of Everything (IoE), estimating it will be a $19 trillion market in the next 10 years. The company recently unveiled an IoE Partner Playbook for its channel.

"The next generation of the Internet of Everything should generate at least five to 10 times the value of the first generation of the Internet to date," said Chambers. "No one is better positioned than Cisco in terms of strategy, market position, product leadership, architectures and organization structure. I am not sure those outside Cisco appreciate the magnitude of the changes we have implemented over the last year."

6. Winning Feels Good

Chambers said Cisco has positioned itself better than any of its peers for the future in regard to winning the big service provider deals.

"We're winning very large service provider, enterprise and public sector deals that we would not have won just as recently as one year ago," said Chambers. "And our ability to do this at a different margin level, our agility on this, we are taking it to our competitors and you are seeing this across the board … we are taking it to competitors. It really feels good."

5. Never Been More Comfortable With Gross Margins

A question came across regarding the low level of services gross margin in the second quarter for Cisco, to which Chambers responded, "We probably had eight or nine areas that we are very close to the highest growth rate we have had and you are focusing on the challenges -- that's more than fair."

"Within the gross margins, we have never been more comfortable," said Chambers. "I have never been more comfortable with any aspect of our business than our ability to maintain gross margins."

4. Never Felt Better About Cisco

Chambers' optimism was at an all-time high regarding Cisco's future.

"There are no surprises to us in the market, and I mean none at the present time," said Chambers. "I have never felt better about our business and our future. I believe we are going to become the No. 1 IT company and our goal was to show you that and get the reward our shareholders, our customers, employees deserve."

3. Cisco Going To Crush White-Label Switches

Chambers said companies that sell white-label switches are running a serious security risk just because they don't want to put the additional money needed into their switching.

"This is where we are going to really crush the white-label people," said Chambers. "I mean, it’s got to be a security architecture type of approach. If you just say, I am going to get merchant silicon and throw software on top of it and run data centers and run WANs and everything, all it takes is one breach and you have done more damage to your brand … then you could in 100 years of saving on a little bit of switching difference."

2. Chambers In Good Shape, Physically

When one Wall Street analyst asked Chambers why he was in such a good mood during the call, the 65-year-old said he'd just recently ran four miles in his fastest time in over a year.

"[Melissa Selcher, vice president of corporate communication and investor relations at Cisco] told me not to be too enthusiastic on the call. I went out and ran four miles this morning. I had my best time," said Chambers.

He also said that he then "lifted weights," which is why he's "full of energy" these days.

1. Cisco Will Have Fun Beating VMware

Chambers acknowledged that VMware is a competitor and that Cisco will view the company as such. Although, Chambers said, "We are going to beat them as a competitor and we will beat them and have fun doing it. I wish I was a better person, but I am not. … And we are going to take it to a bunch of our competitors."

In May, VMware responded to Cisco trash talking its NSX software-defined networking technology. VMware has yet to publicly respond to Chambers' new statements.