John Chambers Rates Cisco's Software Transition, Says America Is 'A Startup Nation'

Chambers On The New Cisco Era

John Chambers, Cisco's chairman of the board and former longtime CEO, weighed in Wednesday on his company's software and digital transition in 2016 as well as his assertion that the U.S. government is failing at digitizing America.

Software has been front and center in Cisco's transition from a hardware-focused vendor into a software-centric organization. San Jose, Calif.-based Cisco has been mounting a software offensive as of late and recently beat Wall Street estimates for its third fiscal quarter even as its bread-and-butter hardware sales declined.

Speaking with Bloomberg on Wednesday, Chambers sounded off on Cisco's transition, the need for greater digitization in America, and who he believes the next U.S. president will be. Here are five highlights from Chambers' Bloomberg interview.

Chambers Rates Cisco's Software Transition On 1-to-10 Scale

With [CEO] Chuck Robbins (pictured) and his leadership, I'm extremely happy and so is the board. I'd give it a 10 [for its software transition].

In the overall transition to a digital company, I'd give us an 8. And versus our peers, probably a higher rating.

American Companies Will Disappear

Every company regardless of size will become a digital company. As you move from just 1,000 devices connected to the Internet when Cisco was formed in 1984, to 14 billion today, to 500 billion in 15 years. So it's a period in time you either disrupt or get disrupted. There is no entitlement. Forty percent of American companies will disappear. It won't be global multinationals, it will be micro or startup multinationals -- that is really where the job creation will occur. It's very important as a country we deal with these issues.

A Nation Of Startups

All the job growth [in America] will be around startups and new companies.

There's only going to be about 60 companies go public on the Nasdaq this year, versus normally 250 to 300. We are a startup nation -- that's where all the job creation is going to occur.

Unlike France and India, who both have a plan to re-skill their workforce, we don’t even talk about that. The average American will not get a raise until we re-teach the skills they need, where 90 percent of the new jobs -- regardless if you're in agriculture or retail -- will require technology skills. So our ability to make that transition … as a country, will determine our future. I think we need to make that front and center on the American stage.

No Digital Plan For America

It's very appropriate [having listened to] [U.S.] President [Barack] Obama and Prime Minister [Shinzo] Abe out of Japan, what you're seeing is every company in the world will be digital. When [Indian Prime Minister] Narendra Modi comes to the U.S. in June to talk to Congress, he'll talk about a digital India. He'll talk about digital manufacturing, startup economy, smart cities, etc. Our country does not have a digital plan. We're the only major country in the world that does not.

Who's The Next U.S. President?

I would have wanted it to have been [former Republican candidate Ohio Gov.] John Kasich, but based on momentum right now, candidly, it's going to be [presumptive Republican nominee Donald] Trump.

The person I would like to see lead, regardless of political party, would be the person who will say, "Here's how were going to fix America and get the average American back to a 10 [percent] to 15 percent pay raise over the next decade" -- as opposed to the way we're heading now, which, actually, the income divide will unfortunately get worse.