Enterprise Networking: Cisco's Difficult 2011 Paves the Way for a More Promising 2012
It was a clearly frustrated and determined John Chambers who sent a lengthy memo to employees about a year ago saying that Cisco Systems had lost its competitive edge and that changes were coming. Cisco had suffered through several quarters of disappointing financial numbers and lowered expectations, and Chambers, the networking giant's president and CEO, had borne the brunt of much of the criticism. Analysts questioned whether Cisco had tried to expand into too many new markets, spreading itself too thin and enabling rivals like Juniper Networks and Hewlett-Packard to steal away some of Cisco's dominant market share in such core businesses as networking switches and routers. Over the course of much of 2011, Cisco underwent a difficult restructuring that included shuttering businesses, laying off employees and reinvesting in key product areas. In November 2011, Chambers declared that the reorganization was over, and that the $40 billion company had met its goal of shaving $1 billion in expenses. And while revenues in switching and routers remain under pressureas they are across the industrythe company's market shares have stabilized, and it is growing many of its other businesses, such as collaboration and video (including its move to buy NDS Group for $5 billion), cloud and the data center, thanks in large part to the success of its Unified Computing System (UCS), an integrated data center solution. Here, eWEEK looks at some of the key steps Cisco made over the past year.
Chambers named Gary Moore, who had been executive vice president of services for Cisco, as its first chief operating officer in February 2011. The move gave Chambers a No. 2 person to help him not only continue to push Cisco into new markets but also to streamline operations and get the company back onto its financial feet.