Bringing Cisco All the Way Back

CEO John Chambers gets the network gear maker on the acquisition trail again; targets storage nets, IP telephony.

John Chambers

The worlds largest network equipment maker, Cisco Systems, Inc., has been bloodied by the industry downturn over the past three years. Now the company has regrouped, recently resuming its practice of acquiring companies, including Linksys Group, Inc. and SignalWorks, Inc., which it acquired last month.

Attempting to engineer Ciscos rebound is John Chambers, president and CEO of the company since 1995. He led the company in 2000 to attain the highest market capitalization of any company in the world. In a recent interview at Ciscos corporate offices in San Jose, Calif., with eWEEKs Executive Editor Stan Gibson, Labs Director John Taschek and Editor in Chief Eric Lundquist, Chambers explained his vision of how Cisco will regain its glory, keying on 9 new initiatives, each of which could be worth $1 billion annually. Those include storage, IP telephony, security, wireless, metropolitan networks, converged packet networks, voice, virtual private networks and cable networks.

eWEEK: Why did Cisco acquire Linksys?

Chambers: Weve built out the network highways pretty well, but where were lacking is getting you out of your garage onto the network. The loads coming from the home for personal and business reasons can be pretty dramatic. In the future, every device—the Internet car and the Internet appliance—will be connected to the network. Were designing routers for cars and, in ten years, almost every car will have a router.

If you believe a network of networks will evolve—and I do—then you will have companies that want to take their networking all the way to the homes of their employees.

For example, I will pay for all of our employees home networks at Cisco. All it takes is one hour a month to break even.

eWEEK: It also gives you household name recognition without buying a Super Bowl ad, doesnt it?

Chambers: Yes. When we launched our major marketing campaign, it was a brand awareness campaign that would expand to the low end of the commercial market as well as the home. Linksys had been on our radar for quite some time.

eWEEK: Is Cisco going to resume the pace of acquisitions it had in the mid-90s?