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.
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.”
And while Chambers may swat aside ideas that white-box makers represent a threat to his company, industry analysts are finding that ODMs are making inroads into all segments of the market, from servers and storage to networking. Infonetics Research analysts in March found that bare-metal switches—hardware that is not locked into a specific operating system or other software—accounted for 11 percent of the data center ports shipped last year, and that number will grow to almost 25 percent by 2019.
“Up till now, bare-metal switching has been attractive mainly to the large cloud service providers (CSPs) like Google and Amazon, who provide their own switch software integrated into data center orchestration and management platforms,” Cliff Grossner, research director for data center, cloud and SDN at Infonetics, said in a statement.”But with vendors such as Dell and HP jumping into the mix with branded bare-metal switches, adoption of bare-metal switching is going to accelerate as tier 2 CSPs and large enterprises endeavor to achieve the nimbleness demonstrated by Google.”