Chambers: We should have killed Cius nine months ago

John Chambers at Cisco LiveSAN DIEGO – Two weeks ago, I published a commentary with my thoughts on what Cisco and the industry at large stood to learn from the failure of the Cisco Cius tablet to become the market dominator its creator had once clearly bet on it becoming.

This week, I had the chance to sit in on a 90-minute open conversation with Cisco CEO John Chambers and sales chief Rob Lloyd as part of an international press contingent at its Cisco Live conference here, and to the surprise of absolutely no one, the subject of the short-lived tablet came up in the conversation.

Read on for John’s thoughts on what went wrong with Cius, what Cisco learned from the experience, what keeps John Chambers up at night, and other unfiltered reflections from the chief executive’s session with the tech press community.

Lloyd was quick to point out that all of the ideas of Cius – a consistent tablet-based interface for collaboration and video – are now being furthered on a variety of other devices by the company’s Jabber messaging product. So there are no regrets in having made the journey – but there are two things Chambers said he regrets from the Cius experience.

First, he said, the company should have foreseen that tablets were going to be become the powerhouse that they are, and that consumer-oriented media tablets were going to become the tablets of choice in the enterprise. It should have gone straight to Jabber on every device and foregone the attempt at Cius en route.

After all, when Cius was introduced in June of 2010, you could still empty a convention centre by spreading a rumor that the Apple Store up the street had just gotten a shipment of iPads in, and vendors like Citrix that had been trumpeting “Bring Your Own Computer” for some time were amending their thinking to the more endpoint-netural BYOD approach we see today.

And secondly, Chambers said that once they realized Cius was not going to revolutionary in the market, he should have pulled the plug faster.

“Once you enter a market and realize you aren’t going to get the volumes you need to get to, you should just stop,” he said. “We should have quit nine months ago.”

That said, Chambers was adamant that he did not regret going through with Cius. It provided a lesson to Cisco that “when markets move, they move very quickly,” as Chambers put it, and it falls into the kind of business risk one has to take to stay ahead. After all, “not one in 10” startups will make it, and “not one in 100” will reach the number-one or number-two market share position that Cisco continues to be the measuring stick for a successful product. He said the company will continue to innovate – with internal R&D, through partnership, and through acquisition, and will continue to take appropriate business risk.

“Will we bat 1.000? No,” Chambers told reporters. “Will you beat us up when we miss them? Yes. But we learn from it, we move on, and we make that next commitment. You’ve got to have the courage to go after it. You’ve got to make the tough decisions – the day you don’t take business risk, you’re already in trouble.

In fact, when asked what keeps him awake at nights, Chambers indicated what he’s afraid of is quite the obvious – he answered that his tossing and turning at night is caused by questions about whether or not the company is moving fast enough; is it taking enough business risk.

Since we were on the theme of high-profile failures for the company, the topic of the Flip digital camera line acquired when Cisco bought Pure Digital, and later unceremoniously dumped as Cisco re-positioned itself firmly away from the consumer market, naturally came up. Here, Chambers said, he had a regret. The company should have saw the value in the software, and put the Flipshare video sharing software “in the cloud and on every smartphone out there.”

“But we missed that window, so we moved on,” he said.

And moving on was something the company needed to do last year, when Chambers and his senior team came to the decision that they were simply going after too many different things. So the company famously ditched several underperforming product categories and re-oriented itself around the way customers buy.

“After a very tough 12 to 18 months, I’m very happy with the way things are going,” he said. “We cast our net a little bit too wide. That was my fault.”