Cisco's Chambers To Robbins: 'Chuck, I'll Be Your Wingman'

Chambers Joins Robbins On Stage For The Last Time As CEO

John Chambers, chairman and outgoing CEO of San Jose, Calif.-based Cisco, met with U.S. and international press at last week's Cisco Live conference. The twist this year was that he shared the spotlight, and more than a few jokes, with Chuck Robbins, who next month will take over Cisco as CEO while Chambers will become executive chairman.

Chambers, in a frank hour-plus press conference, tackled every question head-on without hesitation and called on Robbins to take the microphone when the focus was on the company's future.

No topic was sacred. They addressed Cisco's massive executive lineup changes, competition vs. partnering with companies like EMC and VMware, acquisition vs. internal development, and Cisco's priorities.

Chambers also talked about regrets, noting that he's had a few. (Cue the Sinatra music.) He also talked about his wife and kids, his legacy, his golf game, and his friend EMC Chairman and CEO Joe Tucci. Here are edited excerpts of the conversation.

Cisco started as a partner to companies like EMC and NetApp in converged infrastructure and is competing with some of them. Now, smaller companies in the hyper-converged infrastructure market are coming on strong. What is Cisco's strategy to compete?

Robbins: EMC is here [at this conference]. The VCE business is actually accelerating. It also ties back to the notion that our customers want integrated solutions as opposed to separation of hardware and software. Because they want converged, they want hyper-converged. It's about the speed, the simplicity, and the automation they like.

We're very close to EMC. We're very close to NetApp. And we believe that those relationships will continue. We believe in the ecosystem. And I think that all of us are mature enough that, when we have areas that overlap, we have open communication about them.

When you look at what we've done with VMware, in the last couple of years, it's a great example. We've been very clear that VMware is a competitor. But we maintain the ability to partner with EMC, and continue to drive the VCE element of our portfolio, and jointly sell to the marketplace.

What went on behind the scenes of the announcement of the new executive team?

Robbins: One of the key things I asked of all of them was, 'Are you in for three to five years?' There are a few of those who had different aspirations. They're incredible friends. But we made the decision together that, based on where they wanted to go and what I needed from a business perspective, that they would do something else.

The whole discussion around 'flatter' and 'agile' was just a by-product of the decisions where we eliminated a layer in the organization, and I just thought that, over time, flatter organizations can move faster. So that's what our aspiration is, and we'll continue work that way in the coming years.

Cisco has been talking about the business outcomes, but Cisco is an infrastructure provider. How does Cisco encourage the collaboration between business and IT?

Robbins: We've been positioning [our sales organization] to have the appropriate knowledge of the industry or specific business issues or challenges a customer faces so that we could talk to them about what the technology can enable. A lot of the changes we made across engineering [were] to deliver architectures and deliver them seamlessly and working incredibly tightly when they go into the customer's environment. Our services organization [has] a lot of services around health care and financial services. Our services team is building their services [around] a lot of infrastructure.

We do sell infrastructure. But we also have moved up significantly in the value stack. ... There's a lot of higher value and capabilities that we're taking to our customers that I think will lead us to a relevant position in those discussions.

Have you been making the transition faster than your rivals?

Chambers: If you look at where this market is going, and look at our results vs. our peers', the results speak for themselves and our ability to make this transition so far. If you watch in an industry where many of our large traditional peers actually have had 10, 12, 14 quarters of negative growth ... the fact that we're getting tremendous growth speaks to the effectiveness of transforming from selling 'plumbing' -- which we were the plumbers of the Internet, and proud of it -- to [selling] outcomes.

The key take-away, however, is we have a unique position in that every transition we've talked about, from the Internet to security to convergence of the data center with compute and storage, to SDN and [software-defined capabilities], the network is the key fabric.

Cisco executives talk a lot about the need for prioritization. Can you elaborate on that?

Robbins: Our strategy works right now. We're out-executing all of our peers, all of our competition, in the marketplace. Our customers are actually voting where they're sticking their money. We saw in the last quarter what we announced with our U.S. enterprise business [growth] was that the innovation in our strategy is resonating with our customers.

I think that the challenge we're going to have is trying to place our bets on the different areas on which ones are going to be the best opportunities for us in the future, because we have so many. .... We're going to spend time now thinking through where our customers want us to be two to three years and out, and how do we line up against those to make sure that we are accelerating our ability to win over that time frame.

How will Cisco play in the white-label networking market?

Chambers: We will run our software across every thing every time. We'll let the market determine which way it works together. I think architectures win. But for those that want to go purely bare metal. ... we'll let the market determine the winners on this.

Robbins: When I call our customers and in particular the CIOs, most of them will tell you they spend 75 percent of their resources today doing internal systems integration and operational work to keep everything running. And what they'd like to do is have 75 percent of their resources and time focused on the strategic part of their business that technology can drive.

So moving to disaggregated technologies makes the first problem worse. It doesn't help them achieve the objective of becoming more strategically relevant inside their companies. ... And I don't think that most customers want to take on the extra burden of doing that internal integration.

What plans do you have for Cisco's investment arm?

Robbins: We look at where the market's going. We listen to our customers. And then, once we determine what we need to do, we look at, is that something we're going to drive through our internal development? Is it something that's going to require a partnership for us to make happen, which we think a lot of next-generation [Internet of Things] opportunities are going to require.

[We will also see] a tighter connection with our investment strategy because I think that the technology is moving so rapidly that our understanding of where things will be three years from now, I think we have a good vision of where that is. And maybe it's a combination of all those methods and a very aggressive use of our customer portfolio.

What has happened since Cisco's letter last year to President Obama in response to the NSA revelation. Has the president led reform?

Chambers: Chuck and I have been traveling around the world together. Cisco's reputation and trust is probably at the very top in countries around the world. ... And I don't think anyone [has any] doubts in terms of our integrity as a company. Last year, even in Russia, they run the security systems in Moscow off of Cisco architecture.

I still think our government leaders need to come together with rules of the road. I think you [all have] seen [that] almost every government in the world does spying. And that's not new. That's been true throughout history. I think it's very important, for companies to be successful, to understand you have to have rules of the road, saying that government leaders will have to eventually come to an agreement. ...

We are very trusted as a company, even in China, in terms of the leadership in that perspective.

Was there any response to the letter?

I think you would never have a conversation with government leaders if after the conversations you go out and say, here's what occurred. I've found countries around the world listen very well.

To Chambers: Cisco has enjoyed tremendous success under your leadership. What has been your biggest disappointment?

Chambers: [One] area where we can do a better job is the diversity of our workforce. And that's one of the things that I'm really, really proud [of]. Chuck, I think in the leadership announcements the other day, five of the 10 were female. Not because they're female, but because they were the right leaders.

Any company and any CEO that doesn't take risks can't lead their company. And by definition, you take good business risks, and not all of them are going to work out. And what perhaps I'm most proud of might surprise you. It isn't our successes. It's how we handle our setbacks.

Chambers: Chuck, can you add any thoughts on that when you look back at the last 10 years?

Robbins: On you or me?

Some of the things I've learned over the years is not to make assumptions. And something I've learned internally with our leadership team, and it sounds pretty basic, but there was a time I inherited a team that I knew very well, and I assumed all of the members of the team were very comfortable, and we were going to come together and start working. I started rolling with them quickly. And I learned a couple days later that a couple of them were a little nervous trying to figure out where they fit even though we were friends. It truly taught me through that process not to make assumptions in general.

To Chambers: What legacy do you want to leave?

Chambers: Your kids aren't your legacy. What you want is for your kids to do well, for them to achieve what they can do in life. And you want them to be happy and healthy. And so to me, what I want out of Cisco for the future is for the company to do even better than it did by far while I was here. And having helped my family at Cisco grow just like I helped my kids, I hope they prosper as they go forth and maintain the best of the values of the company, and also that they have the courage to change the company where appropriate.

And that's the perfect reason why Chuck got the support of our board of directors unanimously.

Robbins: Hang on one second. He didn't answer your question at all.

Chambers: Boy, he's doing the CEO pretty good. I have to remind him the chairman still gives CEO bonus recommendations.

Robbins: John has led the company through so many transitions. Look at our high-tech peers, and just compare the last 20 years, and you tell me any other technology company that has navigated all the complexities that we've had in the marketplace.

Second thing is, as John mentioned, all great leaders only want your teams, your organizations, your kids to be more successful after you move on, because it means you built a tremendous foundation that has lasting power.

The third thing is, he created a culture that is so incredibly unique where we're tremendously competitive. We absolutely want to win. But we care deeply about our teams, our employees, our partners, our customers, our shareholders.

What do you think about Net neutrality?

Robbins: The issue is about driving innovation and enabling broadband globally and holistically so that we can deliver the capabilities, the educational services, the health care, all the things that are enabled by broadband globally. The issue of Net neutrality is just a symptom of what you're trying to make sure you've accomplished in general, which is pervasive broadband access to every human around the world so that they can take advantage of this great equalizer that we've seen over the last 20 years, which is the Internet.

To Chambers: CEOs seldom slow down after retiring. Are you planning on consulting or advising, maybe as a sideline or hobby?

Chambers: When I have time, I'm going to focus on my family. My wife's my high school sweetheart. She's amazing. I've got two great kids. We have two grandkids. I love golf, and I love the outdoors and fishing. And I also will learn to do some of the fun things that I'm just OK at, like flying helicopters. And probably taking time [to talk] at universities with students that really make you think. And I'm probably going to do a couple startups that will become public. Not so much starting them, but helping them move to a stage where [they can] scale on a global basis, which is fun to do.

Part of the question you asked me is what am I going to do with the half-time I'm working? And the answer is, whatever Chuck wants me to do.

Chambers: So Chuck, what do you want me to do?

Robbins: I'm fortunate that John's going to hang around and be an adviser to me. He's been through a lot of ups and downs, great times and tough times, over the last 20 years, and so I look forward to leveraging him for that kind of advice.

[John will] maintain key customer relationships where we need him to do so, where he's built them over the years. He's going to help us drive some key partner relationships, some we have in play now.

Chambers: Some of that you'll hear about in the next couple months.

Robbins: That's right. He's going to really lead the digitization effort in some key countries. ... Because security is such a key critical enabler for our customers and for this next wave of Internet, I have asked John to be the sponsor for our security business inside Cisco.

Chambers: Yeah, I think that's more than half-time.

Robbins: What you have to understand is that John's wife is calling me and saying, 'I don't know if I can take him being home half the time, can you give him more to do? '

Chambers: They are actually texting back and forth. It's rather dangerous. [But] Chuck, you're still the CEO. I'll be your wingman.

To Chambers: Now that you are retiring, that leaves EMC Chairman and CEO Joe Tucci as the last of the long-term IT hardware vendor CEOs standing. Any advice for Tucci when he retires?

Chambers: In terms of advice for Joe, he is a very good friend, and I think a very good executive. He just has to be careful. My golf game will start improving rapidly.