Cisco Reinvents Itself To Expand Its Market Reach - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
News

Cisco Reinvents Itself To Expand Its Market Reach

11 engineering divisions focused on technologies replace former segments as revenue drops

Cisco Systems' recent reorganization--its first in four years--aims to eliminate artificial barriers placed on which customers could buy which products.

In the reorganization, disclosed late last month, Cisco has scrapped its three business segments--enterprise, service providers, and commercial accounts--because the boundaries between them had started to blur. For product development, Cisco now is organized into 11 engineering groups, each focused on a specific technology area, such as Internet switching, optical equipment, and storage devices.

The reorganization follows a dramatic dip in Cisco's revenue, from $6.75 billion three quarters ago to $4.3 billion in its most recent quarter, and a corresponding drop in its stock price from a high of $70 to a low of $13. The drop in revenue is just now leveling off.

The shift won't disrupt customer relationships, Cisco says, since its marketing and sales organizations will continue to be aligned with the older separation of customers into enterprise, service-provider, and commercial segments.

From a product-development standpoint, focusing on technologies could end up helping customers because Cisco should be more flexible. Cisco will be able to eliminate self-imposed limits on what equipment it can sell to different types of customers, according to analysts. It will make it easier, for example, for Cisco to sell business customers higher-end networking equipment that it had previously sold exclusively to service providers.

"We had an artificial separation of products and requirements in our old organization, and this new organization will allow us to apply each product to whichever market requires that set of capabilities," says Charlie Giancarlo, a senior VP who will oversee four of the new groups.

Customers also should see more product innovation because the vendor's research and development efforts will become streamlined by eliminating duplication across customer segments, says Zeus Kerravala, an analyst at the Yankee Group.

One potential problem, though, is that customers might think Cisco is less focused on them because it's no longer aligned by customer category, says Kerravala--an impression that competitors could exploit.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
State of the Cloud
State of the Cloud
Cloud has drastically changed how IT organizations consume and deploy services in the digital age. This research report will delve into public, private and hybrid cloud adoption trends, with a special focus on infrastructure as a service and its role in the enterprise. Find out the challenges organizations are experiencing, and the technologies and strategies they are using to manage and mitigate those challenges today.
Slideshows
What Digital Transformation Is (And Isn't)
Cynthia Harvey, Freelance Journalist, InformationWeek,  12/4/2019
Commentary
Watch Out for New Barriers to Faster Software Development
Lisa Morgan, Freelance Writer,  12/3/2019
Commentary
If DevOps Is So Awesome, Why Is Your Initiative Failing?
Guest Commentary, Guest Commentary,  12/2/2019
Register for InformationWeek Newsletters
Video
Current Issue
Getting Started With Emerging Technologies
Looking to help your enterprise IT team ease the stress of putting new/emerging technologies such as AI, machine learning and IoT to work for their organizations? There are a few ways to get off on the right foot. In this report we share some expert advice on how to approach some of these seemingly daunting tech challenges.
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll