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Cisco departure latest sign of transformation

Cisco departure latest sign of transformation

Cisco is transforming itself from a pure networking vendor into more of an overall provider of IT systems

The departure of a longtime Cisco executive last week is the latest sign that the company is transforming itself from a pure networking vendor into more of an overall provider of IT systems.

Jayshree Ullal, senior vice president of Data Center, Switching and Services and a 15-year veteran of the company, is the most recent high-level executive to leave Cisco. Her exit follows those of Chief Development Officer Charlie Giancarlo and Senior Vice President Mike Volpi, both of whom were considered potential successors to CEO John Chambers.

The turnover ends an era of leadership founded in strategic LAN switching acquisitions in the early 1990s. Ullal came to Cisco with 1993's acquisition of LAN switch vendor Crescendo Communications, along with engineering executives Mario Mazzola, Prem Jain and Luca Cafiero.

Mazzola, Jain and Cafiero had left Cisco to form data center switch start-up Nuova Systems, only to rejoin Cisco earlier this year with the company's acquisition of the start-up.

Giancarlo came on board with 1994's acquisition of Ethernet switch pioneer Kalpana.

"She was the last of a generation," Frank Dzubeck, president of consultancy Communications Networks Architects, said of Ullal. "This is the passing of the baton."

Ullal was not available for comment last week. But on her Cisco blog she wrote that her decision to leave Cisco is "with mixed feelings and much introspection.

"As for the inevitable question of what I plan to do next, I hope to rekindle passions for my 'next new gig' this summer and make an informed decision later this year," Ullal wrote.

Ullal's departure is a sign that Cisco is morphing into more of an overall IT company, one that provides orchestration of the entire IT operations -- servers, storage and applications in addition to providing network infrastructure, says Zeus Kerravala, an analyst at The Yankee Group.

"You see a change of guard happening at Cisco, and it's needed," Kerravala says. "This is less about a market transition and more about a company transition. In order to get to be an IT company, Cisco needs some new leadership."

The leadership change for now won't extend as far as the CEO's office; Chambers already has the overall IT background, having come from IBM and Wang.

But his inner circle is ripe for turnover and it may accelerate now that HP is acquiring EDS. Cisco may be watching that US$14 billion marriage intently, ready to scoop up some IT talent that shakes out of the massive combination of the IT systems and services giants.

Indeed, Cisco stated in its latest quarterly results that it is looking for its services business to contribute US$8 billion in annual revenue - one-fifth of the company's overall sales. It currently stands at about US$6 billion.


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