Partners applaud Chambers’ back-to-basics memo

Zarek and MacDonald

Compugen's Zarek (left) and Long View Systems' MacDonald (right) say Chambers' memo is a positive step

Two major Cisco Canada partners are optimistic about the company’s direction following last week’s admission from CEO John Chambers that it needs to make some changes.

Although both stress that details are still to come and that the key will be in those details and Cisco’s execution on them, both Harry Zarek, president and CEO of Compugen and Kent MacDonald, vice president of business development at Long View Systems, give Chambers memo (full text available here) a thumbs up.

In the memo, Chambers admits that while there are things that Cisco does very well, there are also some things it has do better at, and gives an outline of the plan to improve execution in those challenged areas.

Key among the changes Chambers lays out in the memo is an increased focus on some of the company’s biggest opportunities – its core routing and switching business, video, collaboration, virtualization, data centre and cloud – at the expense of some of the additional areas it has added on over the year.

Although Chambers has often boasted about how moving from a ‘command and control’ structure to a management culture with leadership councils for each priorities has allowed Cisco to pursue a myriad of other markets, Zarek indicated he’s long held skepticism towards the approach.

“I, along with many other partners, was a little taken aback when they identified the large number of adjacent markets they were going to go after,” he said. “This is a bit of a wake-up call that you can’t do everything. Even an organization as successful as Cisco needs to be focused on where they can make a difference.”

MacDonald said that some of those adjacencies have proven a distraction that has “allowed to competition to narrow the gaps” with the networking giant in some core areas, but that the new top priorities match up particularly well with the priorities of Long View, and many of the company’s other partners.

“They’re heard what the partners and customers are saying are their primary focuses,” MacDonald said. “I’m happy to see them put the accelerator down and regain the distance between them and the competition. I anticipate a closer relationship because of the alignment of our core focuses. “

Zarek said the focus areas are the right ones for Cisco because they’re all significant multi-billion dollar businesses, they all represent growth opportunities for Cisco, and they’re fields where “Cisco is well-position to deliver good value and innovation.”

Another major theme of the Chambers memo is the idea that Cisco has some operational challenges it has to address. While virtually every channel chief or CEO will tell partners that being “easier to do business with” is a top priority, most will find that hard to deliver upon, especially when you’re a large, multi-business organization that’s expanding in many directions at one time, as Cisco typically is.

“As wonderful as Cisco is from a channel perspective, they remain a bit of a beast in terms of process,” MacDonald said.

Zarek called such operational issues the biggest issues with Cisco, and noted that Cisco has to tackle them now, especially because the field in which the company plays is increasingly crowded, and competitors including HP and Juniper are positioning themselves for a run at Cisco’s home turf of the network closet.

“When they were the only game in town for networking, you had align your operational capability to match theirs,” Zarek said. “But as it gets more competitive, they need to adapt.”

Zarek said he believes the late February introduction of Gary Moore as the company’s first-ever chief operating officer is a sign that the company is taking its operational challenges seriously and is ready to deal with them. Prior to taking on that role, Moore headed up strategy and execution for Cisco’s services operation, an $8 billion (U.S.) business unto itself.

“Assiging a COO is a brilliant move,” Zarek said. “Too few technology companies do that. Putting an experienced operations person who knows Cisco well into that role speaks very highly of how seriously they’re looking to transform themselves.”

One thing MacDonald questions: couldn’t this assessment from Chambers have come a month earlier?

“I would have loved to hear about this at Partner Summit,” he said, referring to the company’s late-March gathering in New Orleans. “I was looking for it.”