The acclaimed super salesman of networking, John T. Chambers, CEO of Cisco Systems, Inc. has increased his company’s revenues and profits ten fold in the five years of his leadership. Cisco is now the undisputed leader of networking equipment that powers the Internet. His round-the-clock work ethic and obsession with customer satisfaction is incessant.
Wall Street is exuberant too. After doubling in 1999, Cisco qualifies as one of the greatest stocks of all time. The hyper-competitive Chambers (50) says, “Keeping it growing is a bit of good luck. There’s no substitute for being in the right industry at the right time.” His influence upon networking has coincided with the explosive growth of the Internet.
“The Internet revolution is about Economies of Skill,” spoke John Chambers at a convention. “Competitive advantage in the agricultural era was based upon an economy of muscle. In the industrial era, it was based on machines. The Internet economy is based on knowledge, and how you apply that knowledge in economies of skill.”
Cisco Systems sells routers and switches that direct data across the Net and through corporate intra-nets. Eighty percent of these are Cisco’s brand. Last year alone they acquired 17 significant companies in networking and other markets. Among these were $10,000M purchase of equipment manufacturers that send data over fiber optic lines.
“Data traffic has always grown at 30–40% per year; voice traffic grows at about 3%,” says John Roth of Nortel Networks, “That crossover point happened roughly at the tail end of 1996 when, for the first time, there was more data traffic than voice traffic on public networks.”
John is the only-son of two West Virginia doctors, growing up in Charleston WV. His early interest in business began working in his father’s motel and restaurant. He was a fair student but reading was difficult. Compensating with a sharp memory and quick mind, he earned a law degree in 1974 and business degree a year later.
An IBM recruiter lured John into sales, telling him that selling was spinning a dream for customers. From IBM he worked at Wang for eight years as senior sales manager.
His marriage for 25 years produced a son and daughter now of college age.
Chambers’ legendary abilities to buy crucial startups and meld them rapidly into the Cisco culture has exceeded the likes of IBM, HP and DEC. He attracts and keeps the best and brightest employees. Companies such as Crescendo, Kalpana, Lightspeed and Stratacom are now under the Cisco umbrella representing markets in which Cisco was formerly weak.
Cisco’s primary competitors are Cabletron Systems, Intel, Alcatel and 3Com. Chambers is pushing his company into the telephone realm against the towering Lucent, Siemens, Fujitsu, and Nortel Networks.
By 2002, home networking is expected to be a $4,000M industry. In preparation, Cisco has licensed its technology to a melange of consumer-electronics manufacturers like Sony to ensure that their products will work with Cisco networks.
Critics call Cisco a “box pusher,” foregoing technical service particularly in complex networks. 3Com’s president sees Cisco’s strategy as reckless, selling its size and might over better design implementation and technical assistance.
Cisco’s weaknesses are a direct result of its very growth, siphoning resources for company purchases. Patience is not one of Chambers’ attributes; the naturally slow managerial restructuring has been betraying its trademark sacred promise that Cisco products function everywhere.
John Chambers’ expressed goal is to change people’s living, working, playing and learning patterns through Internet technologies. He sees himself as an e-business emissary, jet setting to corporate leaders and government officials everywhere, extolling the virtues of the Internet. Upon Chamber’s encouragement, Japan’s prime minister sent his first email a few months ago.
With sales of $17,000M per year or $46.5M per day, Cisco is likely to eclipse Lucent, Ericsson and Nortel by its bigness and momentum. Chambers is a persuasive orator to his audience from diverse disciplines such as scientists, businessmen, and users.
“A large part of our business is based upon trust and working together. Nothing changes behavior like survival,” Chambers said. “It’s no longer the big that beats the small, but the fast that beats the slow.”
The future trend is a melding of entertainment and communications devices. The expanding capability of fast networking breeds innovative adaptations and demand for the foreseeable possibilities.
The innovative I-Grid 2000 is a superfast Internet network for speeds reaching PetaBytes, or one-million-gigabytes. Such an architecture supports 5,000 workstations in 50 countries at true real-time super video conferencing. It’s just a shadow of the advances coming.
Observatories, as in Hawaii, have the problem of distributing worldwide 50 gigabytes of scientific data per evening from the observation of a single star? Solving challenges like this demonstrates a truly united planet around a common cause, one of the most interesting examples of human cooperation for the benefit of everyone.
“The leadership styles required in the new economy are dramatically different,” says John Chambers. “Leadership in the agricultural society was based on location, and how you used your resources. In the Industrial era, it was how you used your assets for efficiency. In the Internet economy, it’s about speed, talent, brand, and culture.”
Greeting his managers, Chambers always asks, “Are you having fun?”