Cisco Systems on Monday brought the curtain down on one of Silicon Valley’s longest-running chief executive acts as it announced that John Chambers would step aside after 20 years.
However, in an unusual division of power that leaves him at the centre of the networking equipment company’s leadership, Cisco said Mr Chambers would stay on as full-time chairman.
Mr Chambers, who built Cisco from a small maker of internet routers into the world’s biggest networking equipment company, will hand the chief executive title to Chuck Robbins, head of the company’s global sales division, on July 26.
In an apparent attempt to head off concerns about what his involvement would be in the company’s management after the reshuffle, Cisco said Mr Chambers would “devote his time to supporting Robbins”, as well as dealing with the company’s customers and governments around the world.
The announcement brings to an end one of the tech world’s most closely watched succession sagas. Several senior executives who were seen as possible successors to Mr Chambers have left over the years, leading to questions about whether the Cisco boss was prepared to hand over the reins. They included Charles Giancarlo, now at tech buyout firm Silver Lake, and Mike Volpi, a partner at Index Ventures.
Mr Chambers appeared to answer his critics recently when he reshuffled leadership at the company, setting up what was seen as a horse race among a small group of executives for the top job. They included Mr Robbins as well as Robert Lloyd, president of development and sales, and Padmasree Warrior, chief technology and strategy officer.
The elevation of Mr Chambers to the role of executive chairman echoes a similar move at Oracle last year when Larry Ellison, the company’s co-founder, handed over his chief executive responsibilities while staying on as full-time chairman. However, unlike his counterpart at Cisco, Mr Ellison made it clear at the time that the reshuffle would make little difference to Oracle’s management, since he would stay in charge of the company’s technology and business strategy.
“Make no mistake — Chuck will be the CEO and make the key calls,” Mr Chambers said on a conference call with reporters.
Mr Robbins joined Cisco in 1997, rising through the ranks to become head of sales — a role that Mr Chambers himself held before taking the top job.
Cisco’s sales have increased from $1bn to $47bn in the years that Mr Chambers has been at the helm, making him the longest-serving leader at one of the big technology companies.
Like other established IT companies selling to businesses, however, Cisco has faced questions on Wall Street about its ability to weather the shift to cloud computing, as well as a wave of low-cost competition from Asia, in its case coming from Chinese equipment maker Huawei.
Mr Robbins said he would spend 90 days reviewing the business before laying out his priorities but indicated that he planned to stay the course set by his predecessor.
“I believe our strategy is working, I believe our customers think our strategy is working,” Mr Robbins said. “But what I do believe is there are areas within our strategy that we can accelerate.”
That includes a focus on what Cisco brands the “internet of everything”, whereby sensors and connectivity are added to a much larger array of devices and objects than just computers, and on security.
Mr Chambers ended the call by reiterating the earnings outlook he made in February, ahead of the publication of Cisco’s results next week. “Business momentum is very strong,” he said. “We are very much staying with our Q3 guidance.”
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