This is the real skinny from a current shareholder, and former insider.
The well intentioned, Bumbling CEO: CR is a non-technical person lacking the presence and passion to inspire customers and employees alike.
His only roles within the company were in the partner teams and sales channels teams, and he’s had little-to-no exposure to the other important parts of the machine. This blissful ignorance fuels his c—eyed ideas that a partner led engagement model will lead Cisco to new growth. The reality is, that model is largely only good for order fulfillment.
The CTO: Oh wait... there is no official CTO. This is a pretty big red flag for tech company. While some execs double as character actors for customer meetings, playing this role for an hour or 2, it’s troublesome that the role doesn’t exist.
The Sales and Marketing leader: She’s got a VERY short list of successes on her CV, and while she can definitely inspire a crowd of pie-eyed millennials in a venue like Vegas, there is very little strategy to be seen on the sales side in the 13 months she’s been at the helm. In fact, many customers have cited their Cisco relationship as far less intimate since the regime change.
Internally, the sales teams have been capped and re-goaled, essentially taking pay cuts, and left wondering how those mandatory re-occurring licensing deals won’t screw them in the short and long term.
From a marketing standpoint things aren’t much better. She’s canceled funding for many major trade shows, customer events, and (shockingly) she’s called strategic marketing partnerships with major sports leagues, teams, media companies, etc.
The Message: While the company tries to woo wall street with promises of “Pivoting to Software” the reality is, they continue to buy hardware companies in an attempt to fortify their dwindling infrastructure business. Multiple optical manufacturing acquisitions in recent history hardly signal “Software Company” to anyone.
And speaking of software - Cisco has always s—ed at it in a major way. So they are depending on the newly acquired companies to help “re-invent” the image as a SW business. Only one problem, Cisco has failed to integrate these companies into its corporate fabric. They still largely operate as small immature businesses. And without a true CTO, the company lacks both a vision and a plan to create end-to-and solutions out of the newly acquired companies.
Re-occurring revenue: The street got excited when Cisco reported its first “re-occurring revenue” deals (multi-year ELAs). But now there is evidence that very little growth will come out of shifting Cisco’s licensing models. Most customers would rather not be forced to re-up for support or software on an infrastructure they’ve already booked as a capitol expense. And for those looking to move to an opex model, the cloud seems to be the preferred route. Which customers would prefer to engage with Cisco in this fashion is still largely unclear.
Perhaps the greatest CFO in the Biz: in spite of all of the broken pieces, Cisco’s CFO continues to expertly craft melodic tunes that hit all of the right notes with analysts and shareholders. But how much longer will it last? This is uncertain.