Cisco's Chuck Robbins On Fending Off Dell, New Channel Leadership And The Perks Of Being CEO

The Next Era Of Cisco

Cisco's new CEO, Chuck Robbins, has his hands full preparing the world's networking leader for the digital age while at the same time driving enablement and profitability for its 70,000 worldwide channel partners.

Robbins is on a quest to make the San Jose, Calif.-based networking giant into a faster, flatter and more nimble company. Since the announcement of his new role in May, Cisco has undergone some big changes including new executive leaders, the consolidation of key organizations such as Internet of Things and cloud, and the formation of a strategic partnership with Apple.

Robbins Tuesday spoke with CRN Executive Editor Jennifer Follett and Associate Editor Mark Haranas about his channel philosophy, his new leadership team, the impact of the Dell-EMC acquisition on partners and the perks of being CEO.

Some of your channel partners are going to be very attractive to the Dell-EMC combination, and they're probably going to start coming for them. How will you fend Dell off?

You know, honestly, I think there are more opportunities for us to partner. This is my opinion today, and so I don't see a tremendous amount of overlap, honestly. Yes, we've got the x86 piece, but again I think the strength of our partnership with EMC provides us a great opportunity to look at that partnership with the new entity. There's a lot that has to happen between Monday morning's announcement and what is it, a year [before that transaction is complete]? We weren't surprised. I think there was a lot of financial pressure in this transaction, clearly.

By and large I would tell you that EMC has been a tremendous partnership for us.

When you developed Invicta, the storage business you recently shuttered, it appeared to create conflict with EMC.

We did just shut that down, primarily because it just wasn't working. And we're going to be more aggressive at making those decisions when we need to.

You don't think you're going to have to fend off advances from Dell-EMC to kind of steal Cisco partners away?

I will defend our [standing] with the partner community over the last 15 years if that were to happen but I don't anticipate that's going to be a tremendous issue, and if it is, we're still a year away. I'm very confident in Cisco's position in the partner community and I know our strategic intent with the partner community going forward, so I'm not concerned.

What about the Apple partnership? They're not known as a channel company. Do you think you'll rub off on Apple?

I think we'll rub off on Apple. I think [Apple CEO] Tim [Cook] and their team want to ensure that their products are being used effectively in the enterprise and that the enterprise customers are happy with their experience. He looked at the landscape and understands which companies have a history of being successful in the enterprise, and clearly we're one of those, and then there are these natural synergies in the relationship around the things we can do together.

As I came off stage [at The Channel Company Best of Breed conference on Tuesday], I sent Tim Cook a note saying we ought to catch up.

When Apple did their deal with IBM it did not have a channel play, so was it Cisco that really drove the notion that there needed to be a channel play in this relationship?

If you look at the three of us [Apple, Cisco and IBM], I'd say we probably have the highest channel presence and the highest channel value proposition.

Tim came to our sales meeting and was on stage and saw the magnitude of this organization being together and I think he realized what we can do together in the enterprise. I know Tim well enough to know that he will be looking to us to help them think about what go-to-market motion we need to make this successful, so that will certainly bring the partners into play.

Can we get Chuck Robbins, CEO, on the record on what is your channel philosophy?

Same as it always has been. Back in the early 2000s when we came off of the dot-com [bubble] we embarked to build the top channel partner program in all of IT. I think in general we've been successful and we don't see that changing.

The partner piece of Cisco's revenue is around 80 percent, that's been pretty steady. Will it continue at that level or will it actually grow?

I would expect it would continue at that level or grow. I would not have any reason to believe that it would go down.

There have been a few departures from the channel management team. Does that mean that you weren't happy with the way the channel sat as you came into the role?

People have different aspirations and there are times when people feel like they have done what they can do and they are looking for a new challenge. It happened that there were several of these that occurred in Cisco around this time, and anytime you have a CEO transition, these are natural decision points for people. The great news for us is that we had the opportunity to put Wendy [Bahr] in the job [of senior vice president of Cisco’s Worldwide Partner Organization], and there's probably not anyone who is a bigger advocate or has greater knowledge of the partner community, and Rick [Snyder, vice president of Cisco’s Americas Partner Organization], having come out of it. The partner community should feel like they're in better hands than they ever had been.

Why was Wendy Bahr the person you wanted to lead Cisco's channel?

Wendy has worked in every piece of our business, so she understands Cisco really well. She's worked in service provider, commercial, enterprise, public sector and federal, so she really understands every element of our business. She understands where the market is going, the partner community and really how to bridge the dynamics and the changes that need to occur while maintaining the value and proposition we have together with our partner community. Those talents are very unique. I'm thrilled for her to be in the role.

What directive have you given her as far as goals and what you want to see out of the channel in the coming year?

What we have asked Wendy to do is no different than what Wendy knew she needed to do when she took this role -- balance the shifting dynamics in the customer base, technology trends and keeping in mind the economic and geo political dynamics. They're less of an issue in how we construct our programs, but really associated with how are our customer needs changing, how are the technologies changing and where does that lead us relative to how we can continue to evolve the partner program in a way that creates value for us and our partners 'community and that's fundamentally what we've asked her to do. She already knew that's what needed to be done.

How many channel partners do you think are really embracing IoT the way they need to right now?

We're in the early, early phase of this thing. This is a decade-long issue. We have time to think this through, and the opportunities are going to be massive and partners are going to have the opportunity to determine what industries they want to participate in, what role in the value chain do they want to play in, do they want to be infrastructure experts on how to build out infrastructure to support these capabilities, do they want to get into the analytics side of it … there's a massive build-out ahead of us. ... As we continue to evolve our strategy in this space, we'll do what we've always done -- make sure our partners understand where we think the opportunities are, how our programs line up for them to be successful, and that's what we've always done in any new market we've entered.

How is the quest for simplification playing out across Cisco?

I've been on a mission to increase the speed that we move as a company. We've always moved relatively quickly for a company of our size, but given the pace of the industry and business in general, it's going to be incumbent upon us to move even faster. We need to drive greater simplicity in everything we do -- in our communication internally and externally, how our products are deployed, and simplicity allows us to drive a greater degree of clarity, which then allows us to move with greater speed. It makes it easier for our partners to do business with us -- it's good for all of us.

We need to get the sand out of the gears and replace it with lubricant.

If you're moving at a faster speed, how do you make sure you're not missing important transitions?

I've built an incredibly diverse leadership team in the classic sense, but also in diversity of experience and perspective. The market is moving so fast that there is no one or two individuals that can understand everything going on and define this strategy. My leadership team is spending a tremendous amount of time together going through what's happening and how our strategy is evolving.

We're meeting for several hours every week or every two weeks. When Ruba Borno, my chief of staff, proposed to me that we needed to spend hours per week in meetings, I was like, 'You have to be kidding me.' But the great thing is, when we get together we're making decisions, and the value of diversity is coming through in the discussion, debates and in the decisions. That's how we'll continue to make sure we won't miss the transitions, and we are incredibly candid and honest in these sessions about where we are, what's going on in the market, what are we doing well and not doing well and how we move forward.

Can you give an example of a decision that shows how you benefited from the diversity of your leadership team?

We've made several decisions around aligning resources more effectively, and those decisions were made in the room in the best interest of the company, not in the best interest of, 'Well, those are my resources.' Whether it's IoT, cloud, consolidation and alignment of resources, analytics, those were all decisions that were made because those were the right decisions for the company.

We've created a strategic framework that bridges our business strategy with our individual technology strategies that we've had, that lays out how we believe the IT landscape will evolve and what Cisco's role is going to be in that. All of that work has been done with this group.

What are some of the perks being CEO? What is now part of the Chuck Robbins life that other people would be jealous of?

Six months ago no one really worried about whether I had lunch or dinner or not, and now people worry about whether there are tomatoes inadvertently on my sandwich.

It is amazing. You know the adage that you have to be careful of what you say because action will be taken? It is unbelievable how rapidly teams start moving when I make a comment. I'm one who likes to think out loud, so I've quickly learned I have to preface by saying, 'I'm just thinking out loud' or there will be six people executing on it within an hour, so that can be really good or you can get yourself in trouble.

Overall it's been very positive. There are people that are really trying to help me be more effective. There's a lot of energy and excitement right now inside the company. They see the leadership team come together, they see that we actually like each other and have fun together and are making decisions.

What's been the most challenging thing to get up to speed on in the CEO role that you weren't exposed to or responsible for before?

There are certain things in a new role you fully can't understand until you've experienced them, [such as] going on CNBC or Fox Business and doing interviews to engage in certain issues with shareholders, analyst and investors. If you understand what you need to do and are transparent, all those things are easier, and that's what we're trying to be.

Is there something you're spending more time on than you thought you would?

I'm spending more time in meetings with my team than I thought I would, but I don't regret it. It's because we're making decisions and being productive. I've never seen 12 people actually look forward to having these leadership team meetings, but it's because the content is rich, the issues are real and we're being decisive.

You have great donuts?

I'm happy to say we haven't had donuts at a single meeting.

How much are you in communication with Executive Chairman and former CEO John Chambers now?

We talk almost every day. We talk or text every day for sure. We sync up each week to go through what's happening this week. You can imagine that over the weekend we were pretty active in discussing the implications of what's going on [with Dell-EMC]. We're still very active.

Does John still have his office there at headquarters?

He does.

You didn't take it over?

Well, I've moved him down. [Laughter]

You've put Chambers in charge of Cisco's security strategy?

He's the executive sponsor to security, but I would say we're both equally involved in security. But there's so much to do. We have strategic relationships, strategic partnerships -- we think that they can add one to two points of growth to Cisco in the future much like we've looked at acquisitions. We also got the security dynamics, government and legislative issues, shareholder dynamics that we're managing through. There are lots of areas he and I need to spend our time on and it's phenomenal to have someone like John who's still willing to stay engaged and work some of those issues for us.

You've talked a lot about data analysis, real-time analysis, is that an area where you'll be investing more R&D?

A great amount of the value of connecting [IoT] devices is the ability to act on those insights quickly. The first point of entry for that data is the network, and so to the extent where we can expose the data in motion so that customers can get to the value of the insight faster and act on it faster, we think is going to give them a great benefit. Here's a very simple example in retail. If I have someone in my casino that has opted into location-based services and offers then I can take real-time information about their location and correlate that with my static analytics about what they've done historically here, what kinds of things they like, what have they won, what games have they played and then I can see that they're in the vicinity of something they've shown an affinity for, and I can push something to that phone so at that moment in time I can take advantage of their location in my facility.

Are you adding big data companies to your startup investment portfolio?

We have over $2 billion invested around the world and we want that to be more tightly aligned to the strategic framework we've built. … So yes, we are investing in anything you see to the extent that it fits into the framework and we look at what that means relative to what we can build in R&D, what are the acquisitions we might need to drive, strategic partnerships, investment strategy or is there a co-development issue that we need to deal with, and we’re looking at that in a heat map across the whole thing.

Is that a 'yes' specifically to investing in big data, though?

Well, define big data.


Analytics, data analysis, yes.

But not Hadoop?

I couldn't tell you, honestly.

How is your development strategy evolving?

An area that we've begun to see tremendous traction with is co-development of products with our customers. We have large customers who are now actively working on the design process with us. This is something we haven't done as much in the past and we're seeing success.

This is an emerging pillar of how we're going to innovate going forward because what we find is that their needs are typically representative of the needs of the broader industry. As they're engaged in the iterative design process, it gets the right solution out faster and clearly meets their needs when it's delivered because they helped design that.