Cisco Overhauls Business Structure

The once unstoppable, well-oiled machine of the networking industry has gotten a major overhaul

The once unstoppable, well-oiled machine of the networking industry has gotten a major overhaul.

Ciscos sweeping reorganization acknowledges converging lines of business, and thus aligns resources by technology rather than by market segment. Executives are playing musical chairs in the biggest structural shuffle in four years.

Cisco is centralizing its engineering and marketing organizations under single managers in hopes that scrapping its line-of-business structure, adopted in 1997, will boost efficiency.

"The world is a different place this year than it was last year," said Charlie Giancarlo, who will run four of the technology groups. "We believe were doing this because we still have a lot of growth opportunities left."

In the biggest management change, Kevin Kennedy, who ran Ciscos service provider business unit for seven years, left the company. Cisco said he will remain an adviser as he pursues "external opportunities." CEO John Chambers reportedly offered Kennedy a chief technology officer post, which Kennedy declined.

Ciscos newly formed engineering group will be headed by Mario Mazzola, previously senior vice president of the new business ventures group. As chief development officer, Mazzola will report to Chambers and oversee 11 new technology groups: access, aggregation, Cisco IOS technologies division, core routing, Ethernet access, Internet switching and services, network management services, optical, storage, voice and wireless.

James Richardson, formerly head of the enterprise line of business, will run Ciscos new marketing organization as chief marketing officer, reporting to Chambers. Giancarlo, former head of the commercial line of business, will run the groups responsible for access, aggregation, Ethernet access and wireless. Mike Volpi, who as chief strategy officer was responsible for much of Ciscos acquisition activities, will run the San Jose firms largest technology product group, Internet switching and services.

Chambers said orders this month are meeting Ciscos forecast and "we are beginning to see signs that our business is stabilizing."