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Cisco's Chambers signals potential heirs to the CEO throne

Identifies 10 possible candidates amid management turnover
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John Chambers, Cisco's (Nasdaq: CSCO) longest-serving CEO, shed some light Tuesday on who may be next in line to take over the company when he retires.

Other than saying that he could possibly retire in the next two to four years, Chambers, in a Bloomberg article, said he and Cisco's board of directors have about 10 possible candidates they are reviewing every quarter.

Those candidates include Gary Moore, Cisco's chief operating officer, Robert Lloyd, executive vice president of worldwide operations, Chuck Robbins, senior vice president of the Americas, and Edzard Overbeek, senior vice president of global services.

At a time when executives have rapidly switched between various companies, Chambers is an anomaly. He has served as Cisco's CEO since 1995.

During his 17-year tenure, Chambers has weathered a number of major storms, including the implosion of the dot-com industry, the ongoing recession and dealing with strong router competitors like HP (NYSE: HPQ) and Juniper Networks (NYSE: JNPR).

"You begin to look at how these transitions occur, and the job of the board and myself is to make sure this next one goes really smooth," Chambers told Bloomberg. "Assuming the board wants me to, and assuming the shareholders do, I'll stay on as chairman after that."

One of Chamber's most drastic measures came last year when the vendor cut 6,500 employees, or 9 percent of its workforce, in an effort to save $1 billion in annual costs and increase profitability. Then, this July, the vendor announced it would lay off another 1,300 employees.

At the same time, a number of Cisco's top executives decided to move on to other ventures.

Ned Hooper, a possible successor to Chambers who took on the chief strategy officer role in 2009, exited the company in July to found his own investment venture. In addition to Hooper, Cisco's Chief Marketing Officer Susan Bostrom and Charles Carmel, the former vice president of corporate development at Cisco who helped drive over 30 of the vendor's acquisitions, including Scientific Atlanta, left in 2011.  

While these executives did not cite reasons for their leaving, a number of reports indicate that they did not like the management structure that apparently delayed decision making. As part of his broad restructuring process, Chambers decided to simplify that management structure.

As for the near-term future of the company, it's clear that Cisco will continue to invest in emerging technology areas, including data centers, IP routers, network provisioning and Operational Support Systems (OSS) and video services. Complementing its residential video play, Cisco purchased TR-69 software vendor ClearAccess and Virtuata.  

In its fiscal Q4 earnings season, Cisco's data center equipment revenue jumped 90 percent year-over-year, while IP router revenue rose 4 percent year over year to $2.09 billion.

For more:
- Bloomberg has this article

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