An Open Letter to Cisco Systems CEO John Chambers

Let's cut right to the chase: Wall Street has lost faith in Cisco Systems, and investors are wondering if CEO John Chambers can get the networking company back on track. How can Chambers energize the company -- and its channel partners?

The VAR Guy

May 12, 2011

5 Min Read
An Open Letter to Cisco Systems CEO John Chambers


Let’s cut right to the chase: Wall Street has lost faith in Cisco Systems, and investors are wondering if CEO John Chambers can get the networking company back on track. How can Chambers energize the company — and its channel partners? Here’s an open letter to John Chambers from The VAR Guy… search engine optimized to ensure it reaches John’s desk — or Cius tablet — using the minimal number of router hops.

Dear John,

Thanks for your time at the recent Cisco Partner Summit. Looks like the most recent quarter was challenging. Much like an NFL coach, you get too much credit when business is great and too much blame when Cisco stumbles. Ultimately, your team needs to execute your vision. But there are certain tactical and strategic areas where your approach needs to evolve, The VAR Guy respectfully suggests. Here’s how.

1. Fix the Sales Team: Several Cisco channel partners suggest Cisco’s sales organization has gotten soft in recent years. Find the weak areas, make some cuts and bring in some fresh talent. Recruit aggressive sales veterans from sales-driven IT companies. Oracle, EMC and IBM come to mind. Some of your best partners tell The VAR Guy that Cisco’s products are strong but the sales execution is weak. The Cisco of the 1990s would not have permitted such a situation. Don’t permit it now.

2. Simplify Your Messaging — Faster: During Cisco Partner Summit 2010, you told partners that Cisco was targeting 50 adjacent market opportunities. Fifty? Oh my. That’s overwhelming. During Cisco Partner Summit 2011, you began to simplify your messaging. Smart. And during yesterday’s earnings call you stated:

“We will stay very focused on five company priorities: leadership in our core, i.e. routing, switching and services, which includes comprehensive security and mobility solutions; second, collaboration; third, data center virtualization and cloud; fourth, video; and fifth, architectures for business transformation.”

That’s a nice start. But you need a sixth priority: ISV relations. You need to move faster and more aggressively to promote third-party applications — Oracle, Microsoft, SAP and more — across the Cisco Unified Computing System (UCS) and the VCE environments. ISVs will drive your hardware sales, John. Make it happen. An example: Create a channel campaign that gets Oracle PartnerNetwork (OPN) Specialized partners trained on UCS.

3. Kill the Councils, Name A Long-term Successor: Your management style worked well during the 1990s. As Cisco grew, you created management councils to consider key business moves. And your command-and-control decision making helped Cisco to move beyond routing into switching, security and more.

But in recent years some Cisco decisions have gotten bogged down in council debates. A prime example: During Cisco Partner Summit 2011 you conceded to The VAR Guy that Cisco was somewhat late to the cloud game. That changed when CTO Padmasree Warrior arrived to help piece together a Cisco cloud strategy.

Now, it sounds like you’re committed to change. During yesterday’s earnings call you stated:

“What we have done to date: aggressively addressed our organization and operating model, first, by appointing a COO; second, by reorganizing major functions of sales, engineering, and services; third, moving away from a broad council and board structure, implementing clear decision-making responsibilities by strengthening the connection between strategy and execution across functional groups; and finally, continuing to streamline operations across the company.”

Those are all solid steps, John. But two challenges remain:

  • You appointed a COO. That’s a smart move. But you need to take an extra step. Sources say your COO doesn’t crave your CEO post. As a result your number two executive is not a potential replacement for you, should you decide to retire within five years or less. It’s time for you to pinpoint an executive who desires the CEO post down the road. Perhaps Executive VP Robert Lloyd? Make sure your potential long-term successor has the confidence to debate your leadership decisions — much in the way that Steve Ballmer and Bill Gates used to debate the future of Microsoft. Leadership friction and intense debate can be a good thing within your corner office.

  • Some talented folks have been exiting Cisco. It’s time to bring big name, outside talent INTO Cisco.

4. Get Far More Aggressive in the Cloud: To your credit, Cisco announced a Cloud Partner Program at Cisco Partner Summit 2011. Smart move. You also decided NOT to launch a Cisco Public Cloud. The VAR Guy applauds your decision, since a Cisco cloud would have competed with channel partners and service providers. But it’s time to aggressively brand Managed Services Providers (MSPs), hosting firms and cloud providers that built their cloud infrastructure on Cisco solutions. Put cloud leaders like NaviSite, Savvis, Terremark and other Cisco partners in a really big cloud spotlight — through TV ads and viral marketing campaigns.

Tell the world: The Cloud Runs on the Network.

5. Create a Killer One-Two Punch: The Cisco Unified Computing System (UCS) strategy is pretty impressive. As is the VCE strategy involving VMware, Cisco and EMC. Now, put a bright spotlight on early UCS and VCE channel partners and customers. Launch UCS- and VCE-centric partner summits that focus on those two initiatives.

6. Visit CIOs Who Embraced HP, Juniper: In recent weeks, Cisco has suggested that “good enough” networking solutions are NOT good enough for CIOs. Without mentioning rivals like HP and Juniper by name, you’re striving to counter those rivals. But how can Cisco compete more effectively against Cisco and HP? Get the answer by visiting ten CIOs who have defected to HP and Juniper solutions. Find the top five reasons those CIOs went with rival solutions. Then, create a compelling strategy to win those customers back.

That’s all for now, John. The VAR Guy knows you’re busy. And he thanks you for the continued dialog.

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