Cisco: Success isn't just about networking
Published: 18 Apr 2005 18:35 BST
What about this chatter about Nortel?
Nortel is a very good company... I've been wanting to partner with Nortel for five to six years. I still believe that — much like we did with IBM and with Ericsson — strategic partnership is the right way to go. Acquisitions have a much higher risk. I would argue in the industry, the hit rate on acquisitions is probably 10 percent... To do large ones across geographies, across cultures — we don't think they have a very high probability of being successful.
Speaking of consolidation, the telecoms market has been fragmented, but in the last several months there's been this move toward consolidation. There are fewer standards and architectures as a result. What do you think the impact on equipment makers might be?
Are you talking primarily about the US?
Yeah.
In the macro sense, too much competition is just as bad as too little. I think the consolidation is absolutely healthy for the US I think the people who are more exposed are those that have a substantial amount of their IT spend coming from those companies mentioned. We have a small percentage of our IT spend coming from those companies.
Moving on to a different topic, you've been CEO for quite a while. It seems like it's becoming harder and harder today to be a chief executive. Boards are much more stringent, and then you've got Sarbanes-Oxley. What are your plans?
Well, I committed to my board within the last year that I'd be here — assuming they want me — for another three to five years. I serve at the board's pleasure, my shareholders, employees and customers. My view is that having the support of all of them is very, very key. And I think you've got to be fair with your board, if you have an intention of leaving in the next year. So, unless you are telling me something in terms that I should be thinking about succession planning, I intend to be here at Cisco.
Is there a succession plan?
Oh, there always is.
I mean, what happens after you?
You always want to make sure there's a smooth transition. People tend to think of that as individuals, I tend to think of it as an organisation evolution. Most companies do not do well after their core group or management rolls over. We are on our fourth CFO, our fifth head of engineering, our fifth head of sales... We've been able to make management transitions very smoothly in ways that other companies have not. I expect us to do the same thing for the CEO ranks. We have a very deep and very wide leadership team.
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