Cisco’s New CEO Embraces the Cloud

This year, Chuck Robbins inherited one of the toughest gigs in technology, replacing John Chambers as chief executive officer of Cisco Systems. From 2000 to 2010, the networking equipment pioneer averaged 13 percent annual sales growth. Since then, 4.3 percent. Robbins says Cisco has already seen the clouds on the horizon. “You cannot deny what may be happening in the marketplace because it doesn’t feel good for your portfolio,” he says.

Cisco’s pricey combination of hardware and software is becoming a tougher sell, partly because major data center operators, including Google, Facebook, and Amazon.com, are designing their own stripped-down hardware and writing their own code. In August a group of Google’s hardware boffins said they’ve been working for a decade to try to replace traditional data center networking equipment. The market for so-called white boxes—meaning generic models—is still a sliver of the networking industry, but it’s growing rapidly. Researcher IDC estimates that annual sales of white-box network switches will rise about 50 percent by yearend, to top $400 million.