Is John Chambers the Jack Welch of Tech?

By Rich Tehrani

President and Editor-in-Chief

 

(The following is taken from Rich Tehrani’s VoIP blog:)

Cisco’s incredible strength comes from its ability to leverage its strong brand and enourmous salesforce to sell virtually every sort of product in telecom and datacom. This report makes it seem like the outlook for the competition is bleak.

It is worth pointing out however that if you focus on a niche, you can likely make better products in your specific area than a larger company with broader focus. This is basic business and has been shown time and time again to be true.

However the report should not be taken lightly. Cisco is a fierce competitor and as an acquisition machine they do it better than any other company I have ever seen.

Having said that, the company is getting bigger and bigger and when that happens, invariably size works to the company’s disadvantage.

In addition, I am beginning to hear stories about how the Cisco salesforce is inundated with new products to sell and just can’t do justice to all of them. Of course, this isn’t unique to Cisco. Companies with far fewer products in their portfolios have similar problems.

There was a time between 1998 and 2000 when Cisco competitors seemed paralyzed by the sheer number of acquisitions the company had made. At more than one large telecom company, over the past years, I remember hearing that people within the organization didn’t know who handled other product lines at the company.

Worse, they didn’t even know how to find out! Whenever I started to hear things like this at a company, I noticed the company’s stock plummeted in the following years.

Microsoft (News - Alert) is another example of a company full of great people who are slowed down by the enormity of their organization. They didn’t need to acquire to be slowed down by their sheer size.

To date, I have seen no sign of any of these problems at Cisco - and I am not sure why. The company is huge and should have more problems than it does.

So when I read positive analyst reports about Cisco I agree the company is in a great position, but I also wonder of the sheer size of the organization will slow it down like size has done to countless others.

So far, this hasn’t happened, and one wonders if John Chambers has some sort of magic formula that others have yet to understand. Is John Chambers the Jack Welch of technology?

While it is too soon to tell, I believe at some point the company will be faced with the challenge of making the massive Cisco ocean liner turn as quickly as competitive speedboats.

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Rich Tehrani is President and Group Editor in Chief at TMC (News - Alert). In addition he is the Chairman of the world’s best attended VoIP event, Internet Telephony Conference & Expo.