Cisco CEO Starts Tenure With a Bang: Some Layoffs Ahead?

Lorna GareyCisco’s incoming CEO, Chuck Robbins, started his new job today with two new executive appointments: Zorawar Biri Singh is now senior vice president and chief technology officer replacing Padmasree Warrior, and Kevin Bandy is now senior vice president and chief digital officer.

Singh comes to Cisco from VC firm Khosla Ventures, where he focused on enterprise IT software, predictive data analyticscloud and infrastructure investments. Biri, well-known in Silicon Valley, also spent time at HP’s and IBM’s cloud businesses and a variety of startups. Bandy was formerly senior vice president of enterprise transformation at SaaS powerhouse

Robbins signaled the importance of the CDO role in a blog post announcing the appointments, in which he used the word “digital” nine times. “In the digital world, data – and the insights from that data – will be the most strategic asset,” Robbins wrote. “The ability to secure, aggregate, automate and draw insights from the data – with speed – will ultimately define success.”

Cisco's Chuck RobbinsLike Biri, Bandy has a seat on the executive leadership team; he is charged with unifying the company’s digital strategy while Biri will continue the push to cloud and IoT.

To that end, Robbins announced Wednesday that the formerly standalone Internet of Things and cloud businesses will now be more deeply integrated with Cisco’s other core divisions, saying that “we are moving IoE and Cloud engineering into our Engineering organization, IoE and Cloud services pieces into our services business, and IoE and Cloud sales into our worldwide sales team. These changes will allow us to scale these businesses as we see increased customer engagements globally.”

For Cisco’s channel partners, it’s becoming increasingly apparent that sitting on the sidelines until customers ask for IoT and cloud solutions is not going to be a winning strategy.

And, of course, new CEOs giveth and they taketh away, as evidenced by two additional announcements made late last week.

Cisco will sell its service provider video customer premises equipment business to Technicolor for $600 million. Robbins, like predecessor John Chambers, isn’t interested in hanging on to businesses that are declining, or that will be in the coming few years, and the heyday of the set-top box is over. Consumers are cutting the cord, returning the despised cable boxes and streaming TV shows and movies from cloud services.

Speaking of dumping hardware, last week Cisco also announced it would exit the Invicta flash storage business, less than two years after buying Whiptail for $415 million. Where storage is needed for converged systems, including UCS, Cisco will buy it from its tech partner ecosystem.

Robbins also warned of some pending layoffs as he rebalances the company portfolio: “A limited number of our employees will be impacted, but we will exit Q4 with our headcount up and, based on our current business assumptions, expect an increase in our headcount as we exit next fiscal year.”

Cisco didn’t get to be Cisco by waiting until a tech category is in decline before cutting its losses, or by passively waiting for new businesses to grow organically. The company’s IoT, cloud and digital strategies are good long-term bets, and in the meantime they support the company’s still-core networking and server businesses.

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