Cisco's Chambers wants to go out on a high note whenever he leaves

With over 16 years at the helm of Cisco (Nasdaq: CSCO), speculation has begun to mount as to when John Chambers will hang up his CEO hat.

John Chambers, Cisco

Chambers: "In terms of the board and the management team, we're completely in sync"

Cisco faced a number of challenges this year that drove Chambers to make some bold decisions to cut costs and set a new growth path.

Feeling like Cisco lost its focus on its core routing and switching business--one where competitors like Juniper have been happy to attack--Chambers conducted a large-scale reorganization of the company in May, shutting down non-core businesses including its Flip camera unit and laying off nearly 13,000 employees.

The company's reorganization came at a time when a number of its key executives have left the company.

Following the departure of Mike Volpi, Cisco's former head of charge of service providers and routing, February 2007, Charles Giancarlo, chief development officer, left. More recently, Cisco lost Charles Carmel, the executive who became known for driving Cisco's mergers and acquisition strategy, has decided to return to his investment banking roots by joining private equity firm Warburg Pincus.

But even with the layoffs, Cisco isn't totally turning its back on buying other companies that add specific value to its portfolio. In late August, Cisco decided to bolster its network and service management technologies across its flagship platforms, including the CRS-3 by purchasing the AXIOSS software assets from OSS vendor Comptel.

Despite these departures and having to conduct an aggressive turnaround plan, Chambers still has the support of the company's board and maintains he'd like leave the company high note. Possible successors that have been floated include current Oracle President Mark Hurd, who came to that company after he resigned from HP in the wake of allegations of sexual harassment.

"In terms of the board and the management team, we're completely in sync," Chambers said in a Reuters article. "They asked me personally would I be willing to commit to another three years."

Speaking during the company's highly anticipated financial analyst conference, Chambers gave a positive yet more conservative long-term outlook. In its revised long-term guidance, Cisco forecast revenue growth of 5 to 7 percent, down from its previous 12-17 percent forecast.      

For the next three years, Cisco forecast earnings growth of 7 to 9 percent and operating margins in the "mid-20s" percentage range.

While the conservative outlook did give some analysts pause, it also represents a more realistic company outlook. "Everybody knew the old targets were off the table," said Colin Gillis, BGC Partners analyst. "It's not a surprise, it's not as bad as it could have been."

For more:
- Reuters has this article
- Bloomberg has this article

Related articles:
Cisco's cost cutting efforts drive revenues past analyst expectations
Cisco to reduce headcount by 6,500 to trim $1.3B in costs
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