Exclusive Interview: Linksys Founder Says Time Is Right To Move On

Cisco Systems Thursday said Linksys founders Victor and Janie Tsao are leaving the consumer and SMB networking unit to help Cisco uncover business opportunities in China. Former Compaq Computer executive Michael Pocock joined Linksys as senior vice president and general manager to succeed them. Janie Tsao spoke with CRN Infrastructure Editor Jennifer Hagendorf Follett about the future of Linksys, opportunities for channel partners and the transition into her new role. Edited excerpts of the conversation follow.

CRN: You and Victor had such a personal touch with Linksys over the years. What’s been put in place to ensure that it continues to run independently?

Tsao: Throughout the years we’ve built up our business units, built up our departments. It is supporting each other to get to the next level. Having the independence within Cisco, that is very clear, with the structure reporting into Charlie [Giancarlo, senior vice president and chief development officer of Cisco and president of Cisco-Linksys]. And the departmental structures within [Linksys] are ready to support [it]. So even though Victor and I spend a lot of time here, the whole Linksys team is here, they are the guts of the organization … It’s really the team and the team is very accepting of Mike being their leader. He’s already been here for almost a week, so we’re really built up to the point where a new leader can come in and excel.

CRN: As you look ahead, what do you see as the most exciting opportunity for channel partners with Linksys?

Tsao: We have a lot of product lines coming out for small businesses. Our [small business] business unit, starting this quarter, has a lot of products ready to start shipping, so that’s one. But just taking point products is one thing, but I think Linksys to this point has been putting in the technology investments in terms of communication and video. Creating a converged solution, that is going to be best fitted for our partners. For example, the small business communication line we’re going to come out with. That is perfect for our channel partners to get into communication because it’s all now going to be IP-based. This is the perfect time. We’re doing a lot of training, a lot of Webinars, we’re going to be doing a lot of road shows. Our goal is to bring our data VARs into communications, into voice. Our voice VARs can also help to sell the data products … Then even for the network entertainment products, it gets complex these days. You can’t just go to Best Buy, plug in a box and do it … that creates a lot of opportunities for the home installer, even for the entertainment products. Voice and video are going to be combined. I know we’ve been saying that for a long time, but this is just the tip of the iceberg.CRN: What’s your assessment of the Linksys One rollout and where that stands? I know some partners got an early look and there was some concern about what features were being included and how it was progressing.

Tsao: It’s a full solution, and when a full solution comes along, it naturally takes longer than just creating a box. We are working on a carrier-class product, so we have to go through the process of testing and getting the services ready. We’ve gone through a few of the steps and we feel comfortable with the service partners that are signing up right now that we will be coming out and making additional announcements to our channel partners later in the year to let them know how they can sell the product. In the interim, we also have other solutions that we’ve started training on already … Today we are shipping the Linksys voice system. Linksys One will take a little bit longer because we are working through that carrier-class certification.

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CRN: Were you involved in the decision to name Mike Pocock as your successor?

Janie Tsao: We’re very pleased to have Mike on-board at Linksys. Yes, we were involved in talking to him prior to the decision being made. He certainly has a lot of industry experience, with full P&L [experience] within multiple areas, very heavy on consumer and also very understanding of the small business side of it. He’s also very strong on the entire channel and go-to-market. It impressed me that he is very open-minded, easy to talk to. He listens to what’s going on … It’s hard to combine all that experience with the personality, so we were lucky to find him quickly.

CRN: How long ago was it that the decision was made that you and Victor would leave?

Tsao: It’s almost like we have twin boys and we don’t know which we love more. Linksys has always been our passion, almost like our child, but with our roots, coming from China, we always had that passion [too]. We always [wondered], ‘Should we do something more? Is there anything that we can do [in China]?’ We always had that, so it’s not something new. It has been years since we had the full passion to do something and explore more opportunities and bridge the culture and bridge our working experience. So this is not something new.With the acquisition and the transition, we knew we had to make sure Linksys was ready. We were very heavy in North America at the time, and now we have a good international expansion … We also have our small business[-focused] business unit that was formed this fiscal year, and we know that’s a product line that’s going to come out and really start supporting the small businesses … It’s a very good mix with the infrastructure we’ve built at this point, so it’s a good time to start searching.

CRN: Was it your intention from the time of the acquisition that you would eventually leave Linksys?

Tsao: We knew that we would want to see this baby get to the point where we’re comfortable …With a lot of support from Charlie for the past three years, we really feel independent within a large organization … But we feel the business model is supporting itself, we’ve got our management team built up, cross-functional collaboration is happening smoothly within the organization, so we know the time is here because we’re mature and to the point where we will excel … We really feel the timing is right.

CRN: So was it you and Victor who initiated the decision or did that come from Cisco?

Tsao: We sat down with Charlie one more time to say let’s start spending a little more time to see what we can do in China, see if we find a little bit more [opportunity]. If we find the right individual [to take over] then we can spend more time. So it initiated with a discussion from our end saying that we think it’s time that we should be looking at how to get involved over there.CRN: How long did the search process take?

Tsao: Probably six months or more, on and off. With high-level searching it’s not day-to-day stuff.

CRN: Can you talk about why the decision was made to bring someone in from the outside rather than from inside Linksys or inside Cisco?

Tsao: We certainly looked inside and outside. Within Cisco there’s a lot of talent, I have to say, in product development, channels and everything. We also looked outside to see if we could get an individual, so we naturally didn’t limit ourselves. It was more about consumer experience, which is our primary segment … we’re still dealing with a lot of converged areas into the homes, and also the small business side of it. So it came down to who had the strongest background. In Cisco we have less people involved in the consumer side. We had the conversation with Mike, and his experience is really what we’re looking for.

CRN: Was there actually an employment contract that ended here?Tsao: We had an agreement after the acquisition, but then [from] two years after that we were at-will, like every single employee here, the same way as the rest of the Cisco folks, even the executive teams … We’re just continuing our employment relationship with Cisco, we continue to report into Charlie … we just can start spending more time in China to [find opportunities] from an IP technology perspective and investment perspective … There are a lot of things we can try to bridge between our work experience and our cultural roots to find tangibles to help Cisco and Linksys as well.

CRN: Are you actually going to be moving to China?

Tsao: We will be spending a lot of time there. I would imagine that eventually we will move there, because if you want to find opportunities, you have to be where the opportunities are around you, so it makes sense that we would move there. But in the meantime we’ll be putting in a lot of mileage, but we don’t mind.

CRN: Do you have official titles for your new roles?

Tsao: We’re going to keep it very general. We’ll continue to be senior vice presidents within Cisco, but we won’t be involved with day-to-day Cisco operation or Linksys operation in China. We’re really going to be open-minded for some of the business development.CRN: What kinds of opportunities are you going to be looking at?

Tsao: We are very open at this time … China itself does a lot of R&D. Cisco itself has R&D there, has operations there in terms of manufacturing, so there a lot of development on the next consumer and small business technologies, and even more than that, that will potentially be coming from there to the rest of the world … Other than that, there are investments in business development that Cisco is doing there … this just allows us to be a little more involved in investments Cisco needs to have in Asia-Pac.

CRN: Do you expect eventually that you’ll be heading up a new business or a new division there?

Tsao: I don’t see that at this point because I think it’s really [about] definging business opportunities … Being involved in a lot of operations, we can help to make sure that, once we define things, that the operations will run, but for us to run the operations probably would not be appropriate because Cisco has a lot of operational teams, and they are the experts in their own areas … I’d have to say that we’re not even qualified to run a whole lot of operations other than Linksys, so I think defining the opportunities is what we’d like to do.

CRN: I know John Chambers has identified China as an area of opportunity but also of challenge because of the networking vendors that are already there. Can you talk about the challenge Cisco faces?Tsao: There’s always going to be a challenge when competition comes out with price being one of the key advantages they’re trying to [sell]. There will always be challenges like those. A few of the competitors do fall into the China area, and Cisco has been facing that from the beginning. I don’t think that’s any surprise. But Cisco also [has partnerships there], so as the industry evolves and converges, at a certain time partners can be competition in a certain way, in certain divisions and the competition can be partners in another way. So one of the areas we could be looking at is to say how do we work with some of the competitors, potentially.