John Chambers, who in his two decades as CEO of Cisco Systems has seen the company become the dominant player in a fast-changing network infrastructure space, will step down from his position in July and will be replaced by Chuck Robbins, currently senior vice president of worldwide operations at the company.
Cisco's board of directors made the announcement May 4, saying Chambers, who took over as CEO in 1995, will resign from the post July 26, though he will become executive chairman and continue to serve as chairman of the board. Robbins joined the board May 1.
Chambers will leave a company he joined in 1991 before assuming the CEO duties four years later. During his tenure, Chambers has overseen an annual growth of Cisco revenues from $1.2 billion to about $48 billion.
The change in leadership, which has been talked about for several years, comes at a time of transition for both Cisco and the data center world it plays in. The company, which has made billions of dollars over the years selling expensive and complex data center systems such as switches and routers, is now having to contend with new technologies like software-defined networking (SDN) and network-functions virtualization (NFV), which some analysts say threaten the company's financial bottom line.
Those technologies—which essentially remove the network control plane and move networking tasks such as load balancing, routing and firewalls into software—also have given life to original design manufacturers and the commodity white-box systems they make. It's a challenge that Chambers has dismissed, famously saying in February that the company's Application Centric Infrastructure (ACI) initiative is dominating the SDN market and that bare-metal switches pose no threat.
"We are pulling away from our competitors and leading in both the SDN thought leadership and customer implementations," he said. "The market has recognized the benefit of ACI as compared to PowerPoint concepts of aspirational competitors. … We are converging networking, applications [and] security with scale for our ACI platform, and we are doing it with the speed and the scale that no one else is coming close to it. We are seeing no unusual competition in the market, no unusual competition with white-label or white-box [vendors], nor will we in the future."
The change in CEOs also comes as Cisco is looking to grow beyond its networking roots to become an enterprise IT solutions and services provider, offering everything from the Unified Computing System (UCS) converged infrastructure solution to a broad data and network security portfolio. However, Chambers and other company executives have said that the network will be the foundation of the modern data center, and that Cisco's expertise in that area gives it an advantage.
In regard to Robbins—who joined Cisco in 1997—Chambers gave a nod to the rapid change happening in the industry and said that the company has "selected a very strong leader at a time when Cisco is in a very strong position. Today's pace of change is exponential. Every company, city and country is becoming digital, navigating disruptive markets, and Cisco's role in the digital transformation has never been more important. Our next CEO needs to thrive in a highly dynamic environment, to be capable of accelerating what is working very well for Cisco, and disrupting what needs to change. Chuck is unique in his ability to translate vision and strategy into world-class execution, bringing together teams and ecosystems to drive results."
For his part, Robbins said he "joined Cisco 17 years ago because I wanted to be a part of a company where I believed the possibilities were limitless. Today, I am even more convinced that Cisco is that company. Over the past 20 years, John Chambers' vision and leadership have built Cisco into one of the most important companies in the world; a company fiercely committed to delivering for its customers, shareholders, partners, and employees. The opportunity that lies ahead for Cisco is enormous, and the ability to lead this next chapter is deeply humbling and incredibly exhilarating."