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Can Cisco Survive Success?

Cisco is looking fat and happy with record net income and ubiquitous product lines. Can it keep up its spectacular growth without stumbling?

Several years ago, in the aftermath of the dot-com bust, Cisco was looking like a very sick company. So many businesses using its equipment had gone under, you could practically hold a yard sale and sell the stuff for pennies on the dollar -- or just auction it all off en masse on eBay.

The company posted a $1 billion net loss, laid off thousands, and was looking for a new strategy -- any strategy -- that could see it through the hardest times the technology industry had ever seen.

Compared to then, Cisco today is fat and happy. Its core business, selling routers and switches, is thriving. And as IP networking expands to conquer voice as well as data, and becomes used in everything from cars to refrigerators, Cisco is well-positioned to remain the 800-pound gorilla of the networking world. It dominates the high end, and through its acquisition of Linksys, has a dominant role in fast-growing home networking and small-business networking as well.

But the question remains: Is selling routers, switches and associated hardware enough to keep the company growing? Most likely not. And Cisco recognizes that. So it has refined its focus away from selling boxes and wires, and instead has a new mantra: "architecture."

CEO John Chambers says the point is to move customers "from a box, to a system, to an architectural focus." And the word has filtered down to the troops. In an interview with Network Computing, Pierre-Paul Allard, VP of enterprise marketing, used the word architecture at least 50 times during a 60-minute interview.

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