Cisco said Monday that longtime sales executive Chuck Robbins would be its next CEO, ending years of speculation over who would replace John Chambers at the helm of the company.
Robbins will assume the post on July 26, and Chambers, who has been CEO for 20 years, will remain as executive chairman.
The announcement marks the conclusion of a 16 month search that began in January 2014. It comes at a time when Cisco is trying to remake itself amid growing competition and a movement towards so-called software-defined networking, which reduces the reliance on the kind of specialized hardware Cisco builds for hooking computers up to the internet.
“Today’s pace of change is exponential," Chambers said in a statement. "Every company, city and country is becoming digital, navigating disruptive markets, and Cisco’s role in the digital transformation has never been more important. Our next CEO needs to thrive in a highly dynamic environment, to be capable of accelerating what is working very well for Cisco, and disrupting what needs to change. Chuck is unique in his ability to translate vision and strategy into world-class execution, bringing together teams and ecosystems to drive results."
As one of the longest-tenured CEOs in technology, Chambers, 65, saw the company grow from $1.2 billion in annual revenue in 1995 to $47.1 billion in 2014. He transformed the company into the biggest network gear provider for what became the backbone of the Internet. Cisco was briefly one of the most valuable company's in the world when it ballooned to a market capitalization of more than $500 billion in 2000. But after the dotcom bubble burst, Cisco struggled to regain its momentum. Its current market cap is close to $150 billion.
Robbins, 49, has been steadily rising through the ranks at Cisco for the past 17 years, working mostly on sales. In his most recent role as senior vice president of worldwide field operations, he led the company's global sales and partners teams that are responsible most of its revenue, Cisco said. Cisco also credited Robbins with helping grow the company into the commercial business segment that now makes up 25% of revenue. He was also a key player behind some big acquisitions at Cisco recently, including security company
"The opportunity that lies ahead for Cisco is enormous, and the ability to lead this next chapter is deeply humbling and incredibly exhilarating," Robbins said in a statement. "I am focused on accelerating the innovation and execution that our customers need from us. Their success will continue to drive us. At a time when our industry is on the cusp of more disruption than we’ve ever encountered, I couldn’t be more confident in our ability to win, or more honored to lead this great company.”
Robbins is not the most obvious choice to take over as Cisco's next CEO. In the past year, Cisco president Robert Lloyd had been the frontrunner in rumors swirling around who would succeed Chambers. Cisco chief technology and strategy officer Padmasree Warrior as well as Cisco general counsel Mark Chandler had also been in the running.
As executive chairman, Chambers will assist Robbins in his transition to CEO.
“We’re not a perfect company, nor am I the perfect leader,” Chambers said about Cisco's next steps in the May 5, 2014 issue of FORBES. “I have to constantly reinvent myself. If you don’t do that, you get left behind.”
The market seems rather indifferent about the news. Cisco's stock is currently up 9 cents -- less than 1% -- today.
The challenges for Robbins to keep Cisco relevant are significant. The company has gone through a series of layoffs since 2011 -- with its most recent cut coming in at around 6,000 employees.
“It's not smooth sailing from here,” said Alex Henderson, a senior analyst at Needham. “At the end of the day, there's lots of challenges. They're a low-growth company and struggling to sustain margins. They've got a lot of work in front of them to stay relevant. ... The trends of open source and open environment fly in the face of Cisco's business model over the last decade.”
Updated to include analyst comment.
