Cisco Systems Inc. Chief Executive Officer John Chambers and Chuck Robbins, his just-named successor, both have Southern drawls and a reputation as hard-driving, world-class salespeople.
The two executives are so focused on the joy of selling that they held a friendly bet every Wednesday on whether Cisco’s sales for the week would come in north or south of Robbins’s forecast, Chambers said in an interview last year.
The question now is whether Robbins, 49, is different enough from Chambers to navigate the world’s largest maker of networking equipment through monumental changes in its industry. Big Internet companies such as Facebook Inc. and Google Inc. are making more of their own gear, while some smaller firms are opting for software-only networking technologies that can be run on garden-variety PCs instead of Cisco’s expensive hardware.
“Chuck is one of the nicest guys on the planet, but he’s a sales guy,” said former Cisco executive Dan Scheinman, who is on the board of switch maker Arista Networks Inc. “He’s never really been an engineering guy.”
Robbins joined the San Jose, California-based company in 1997 and helped it exploit burgeoning corporate demand for Internet equipment. Most recently, he’s served as senior vice president of worldwide operations, leading the global sales and partners team. He helped Cisco build up a vast network of resellers, and ran Cisco’s sales to corporations in the U.S. before taking over the worldwide sales effort.
The future CEO is “an execution machine,” Chambers, 65, said Monday in a press conference after announcing the handover, which will take place on July 26.
Robbins’s execution has been particularly impressive in the past year. Just when many analysts were predicting doom for Cisco amid the rise of software-defined networking, the sales team took advantage of some long-awaited new products, whose rollout has helped the company exceed sales estimates for five quarters straight.
Robbins said he’ll follow the strategy set in place by Chambers, but will “accelerate” it in places. He mentioned security software to help companies deal with increasing cybercrime, and has also shown an interest in helping Cisco become a stronger player in software.
“The market is moving too fast for any one individual to have all the answers,” Robbins said on the conference call Monday.
The company owes most of its success to sales of hardware such as routers and Ethernet switches, which it sells at gross margins that are twice those of other types of products, such as servers. The threat of cheaper software-based networks has required the company to become more nimble.
“Chuck has gotten Cisco into a more modern mind-frame,” said JR Rivers, CEO of Cumulus Networks Inc., one of a slew of new software-defined networking rivals. “This is an opportunity for him to go back and say, what is Cisco’s core business?”
Robbins needs to push into software to manage all the applications companies run in their data centers, to compensate for broader declines in the profitability of the data-center equipment itself, he said.
Robbins showed his willingness to break from Chambers-era dogma in his handling of Cisco’s $1.2 billion acquisition of Meraki Systems in 2012. For decades, the company prided itself on its factory-like approach to integrating companies. The acquired company’s sales force would almost always be melded into Cisco’s vast sales team, as a means to quickly reach more customers.
Separate Sales Force
Meraki sold networking-as-a-service via the Internet, giving small and medium-sized companies access to the features of a big-time network without owning the gear themselves. This was a threat to Cisco salespeople whose mission was to sell more expensive, profitable hardware to those companies.
After months of bickering, the problem landed on Robbins’s desk, said two people familiar with the incident. He quickly opted to let Meraki keep its sales force. As of the most recent period, Meraki was doubling sales every quarter and was on pace to reach $400 million in annualized revenue this year.
“Chuck made a difficult decision: He let us be independent,” said Meraki co-founder Hans Robertson, who left the company earlier this year. “That allowed us to grow.”
Chambers developed a particular cult of personality during his 20 years as CEO. He worked to create what he called the “Cisco Family,” and personally intervened to help employees facing illnesses or other tragedies with financial or other kinds of assistance. A polished public speaker, Chambers relished his opportunity to meet -- and then talk about meeting -- world leaders, a job he will continue to do.
“I tend to be more command-and-control,” Chambers said.
Robbins, who said he’ll spend his first 90 days talking with employees, customers and other partners, will probably be somewhat less visible. Former Cisco executives are already wondering if Robbins also tends to be a more aggressive cost-cutter, based on his comments in a video that Cisco posted on its website.
“We’re going to drive a level of operational rigor that’s maybe even a bit tougher than what you did, John,” Robbins said.
One question is whether Chambers’s decision to remain on the board as executive chairman will limit Robbins’s ability to chart his own strategy. Chambers said he will remain available to work on Cisco matters for 50 percent to 75 percent of his time, but that he’ll leave big decisions to his heir apparent.
“Chuck’s the CEO and will make the key calls,” Chambers said.