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Cisco names Chuck Robbins as CEO, John Chambers stays as chairman

04 May

cisco-600xx3183-2122-0-0by Cromwell Schubarth

Cisco Systems named Chuck Robbins as John Chambers’ successor as CEO, effective at the end of July.
Robbins, the San Jose company’s senior vice president of world-wide operations, joined Cisco in 1997, two years after Chambers became CEO.
Chambers, 65, will remain as executive chairman. In his time the company grew into the world’s dominant networking equipment company, going from $1.2 billion in annual revenue 20 years ago to about $48 billion today.

“This is the perfect time for Chuck Robbins to become Cisco’s next chief executive officer,” Chambers said in a press release.

The move comes at a time when Cisco is facing what some consider to be its toughest challenge, staying on top as the network and infrastructure market it has dominated shifts from a hardware focus to a software focus.
Robbins was a key player in two of Cisco’s biggest acquisitions in recent years, done to help it ward off the challenge of cloud-based rivals. He was executive sponsor of the $1.2 billion purchase of San Francisco-based Meraki in 2012 and the $2.7 billion purchase of data security company Sourcefire in 2013.
But in addition to the challenge for software upstarts, Cisco is facing reduced purchasing by telecommunications carriers and lower demand in China.
The company is also moving to position itself as the continued networking leader as data demands are expected to mushroom from connected automobiles, household and commercial equipment that make up the “Internet of Things.”
Board members Roderick McGeary and Francine Katsoudas said in a blog post that the search for a new CEO has been going on for the past 16 months.
“Chuck will both accelerate what makes Cisco an undeniably great company and also drive the transformation to carry the company to a whole new level,” they wrote. “Chuck has the full confidence and trust of the Cisco Board as we enter this next chapter.”
Chambers’ time at the helm was not without its rough patches, particularly after a failed move to consumer electronics that was highlighted by the $590 million purchase of Flip video camera maker Pure Digital in 2009. Two years later, Chambers cut that effort short and began a restructuring that eliminated nearly 8,000 jobs in two years.
At one point during the dotcom bubble, Cisco was the most valuable company in the world with a market cap of $555 billion. It’s market cap today is around $149 billion.
Cisco stock on Monday was relatively unchanged from its Friday closing price of $29.13. It has risen about 6 percent this year and is up about 30 percent in the past 12 months.

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