Cisco does it again

Jim McGee comments on the case of Cisco (Fast Company article here, calling the company "socialist"), which seems to actually try to become a web 2.0 enterprise, whatever that might mean in the end. Cisco has always eaten its own dog food – back in the late 90s, I somehow bamboozled Pete Solvik, the CIO, into giving a talk to my students via teleconference. One of the things he stressed was the importance of being the first user of their own Internet technology. Back then Cisco was famous for serial buying of companies (for their technology) and for their extremely efficient internal procedures. It is one of the few companies I have seen that truly are strategy-driven, with strategy being an explicit choice and their vision and mission something distinctive.

The interesting thing here is that Cisco seems to be pulled in the direction of a higher-margin consulting company by its customers, which could leave it vulnerable to a low-end disruption from, say, Chinese home and SMB networking component companies powered by open source software. For those few companies that have been able to survive such a disruption, their survival has either been based on a move towards other places in the value chain (somewhat consistent with what Cisco is doing, it could be argued) or by a conscious choice to allow cannibalization by lower-margin products or services. In the cases I have heard of (such as Intel’s creation of the Celeron chip) this has dependent on top management with strong decision power and a long-term view of technology evolution. Could it be that decentralized management could make such a move, should it be necessary, harder for the organization to execute? Or,perhaps, easier, since at least the start phase can be done in a skunkworks fashion.

Nevertheless, Cisco is at it, again. I am looking forward to the rest of the story.