Cisco’s New C.E.O. Envisions Big Changes
If Cisco Systems’ new chief executive has his way, in a couple of years he will have a very different company.
In his first big public statement since he took the helm in July, Charles H. Robbins said Cisco would move away from selling individual switches and routers — the plumbing of the Internet and other modern communications systems.
Instead, Cisco will stress integrated parts with lots of software, so that new applications and business uses could be readily deployed.
“Companies do not want to be in the business of putting things together,” he said. “A massively distributed network is where we are headed.”
He also said Wall Street would need to start seeing Cisco in new ways, as it moves to revenue models closer to those of cloud-computing companies like Salesforce.com, with lots of revenue based on subscriptions.
A darling of investors during the dot-com boom, Cisco shares have put in a lackluster performance. Yet 80 percent of the world’s Internet traffic passes through Cisco machinery.
“We believe we can manage them,” Mr. Robbins said of the analysts covering his stock, adding that it was unclear what “the end state” would look like as businesses like collaboration and security increasingly move to subscriptions, and traditional hardware is sold by the piece.
It was hardly apparent that Mr. Robbins wanted such a different company in July, when he took over from John Chambers, who ran Cisco for 20 years. Mr. Chambers had long admired IBM, and sought many times to build up a large consulting-based business similar to IBM’s.
“I don’t want to end up there,” Mr. Robbins said of the IBM model. Instead, he said his sales people would try to work with “multiple touch points” throughout a company, in particular between industrial machine operators and information technology departments, to get machines online.
Cisco is planning big investments in analytic tools to help automate both large-scale data centers and billions of objects tied to the Internet. On Monday, Mr. Robbins announced a deal with FANUC America, which has some 300,000 industrial robots in factories, to carry out preventive maintenance, based on Cisco’s artificial intelligence products.
Of course, that means a lot of artificial intelligence, and other computing skills Cisco lacks. “We’ve hired lots of A.I. guys, and people with strong mathematics backgrounds,” Mr. Robbins said.
Zorawar Biri Singh, Cisco’s chief technology officer, said some of the new features would also go into existing Cisco products as software modifications. Those changes will be announced in several months, he said.
The moves by Cisco come as many of the old giants of technology, including Microsoft, Oracle, Intel, Hewlett-Packard, IBM and Dell, struggle to adapt to new businesses around cloud computing, mobile tech and sensors.
Mr. Robbins appears to believe he can adapt Cisco by changing it from a company that hauls bits around, with some software to help enable a few functions. The new version is a company with a much greater awareness of what is inside a business’s overall system, and how it needs to work.