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Cisco CEO not big on spin-ins

Jim Duffy | Nov. 17, 2015
Robbins favors small, internal "start-up" teams over funding and acquiring companies.

20151005 cisco chuck robbins
Cisco Systems CEO Chuck Robbins spoke at the Global Editors Conference in San Jose, California, on Oct. 5, 2015. Credit: Stephen Lawson

Cisco’s emphasizing the establishment of small internal “start-ups” for innovation rather than forming, funding and acquiring spin-in companies to develop new products for key markets.

CEO Chuck Robbins says Cisco is setting up small teams internally to “give them big hairy problems to solve” in areas the company prioritizes for product development and revenue growth. Such areas include data center, security, service provider routing, software programmability – including automation and orchestration -- collaboration, and analytics for the Internet of Things.

This week will produce results of the internal start-up innovation cycle when Cisco introduces some new programmable routing products, Robbins said in an interview with Network World last week after announcing its Q1 financial results.

“What we’ve been testing over the last year is, can we take all the things that worked really well in the spin-in model and recreate them in an internal start-up model,” Robbins said. “And what you see coming out (this) week is reflective of that being successful. We took all of the benefits of the spin-ins without the complications of the legalities and those sorts of things. We isolate these teams inside the company we create similar environments for them, similar benefits for them upon success, and so far we think that’s going to work. I wouldn’t rule out that (spin-in) possibility in the future but I think if we can get this right it’s actually a bit faster.”

The spin-in model has been very successful for Cisco as a way to introduce new products into new markets. But they also create resentment within Cisco among the engineers that are not selected to participate in, and be rewarded for, the successful development and sales of the products they produce.

To date, Cisco has completed three with top engineers Mario Mazzola, Prem Jain and Luca Cafiero, and marketeer Soni Jiandani: Andiamo Systems for SAN switching, Nuova Systems for data center switching, and Insieme Networks for programmable, software-defined networking.

Insieme’s Nexus 9000 and Application Centric Infrastructure (ACI) products lines are undergoing a healthy ramp for Cisco. The Nexus 9000 gathered 900 additional customers in Cisco’s fiscal 2016 first quarter for a total of 5,000 in the two years it’s been shipping. ACI’s APIC controller tallied 200 more customers for 1,100 overall since it began shipping in August 2014.

In data center switching overall, Cisco achieved $500 million in revenue in Q1, a boost 140% from last year and 26% last quarter, putting the business on a $2 billion run rate. It will reach an inflection point in the second half of Cisco’s fiscal 2016 where sales of the newer Nexus 9000, 3000 and ACI platforms will offset the decline in “historical” architectures like the Nexus 7000 and Catalyst 6500, Robbins said.


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