Because the Cisco of today was built on a hundred acquired start-ups, the company's top technologist wants to know: "What happened to all those entrepreneurs?"
Cisco's Chief Development Officer Charles Giancarlo raised this question in a talk at the company's C-Scape analyst conference on Tuesday. He said Cisco is realigning itself to squeeze new ideas out of its internal talent pool -- built through 108 acquisitions since 1993, with almost half of the 10,000 employees it has acquired still on board.
To spur more internal inventiveness, Giancarlo said Cisco has reorganized how it manages and supports its Emerging Technology groups -- product areas outside of Cisco's core routing and switching, and its six Advanced Technologies: enterprise IP communications, home networking, optical networking, security, storage-area networking and wireless technology.
"There was criticism in press for some time that said Cisco couldn't innovate, and that Cisco had to buy [companies] to come up with new things," Giancarlo said.
He said he wonders what happened to all the inventive technologists Cisco acquired "who were considered very innovative, and then as soon as they became part of Cisco, couldn't invent their way out of a paper bag," according to some industry perceptions.
Cisco defines Advanced Technologies as product areas where the company expects to see US$1 billion in annual sales. Emerging Technologies are defined as areas that have the potential to become US$1 billion businesses.
Cisco over the last few years became more aggressive with these Emerging Technology initiatives; in 2005, CEO John Chambers said Cisco would announce a new Emerging Technology once a quarter.
Examples of those recently announced include Cisco's telepresence and video efforts, its converged first-responder radio and IP telephony technology and its Application Oriented Networking technology. Each of these was, for the most part, cooked up inside of Cisco, instead of through acquisition, Cisco said.
Giancarlo said Cisco has reorganized how it manages its Emerging Technologies group around a start-up mentality that helped build the products that make billions of dollars in sales. Cisco now has internal start-up teams organized around the Emerging Technologies it is pursuing. Each team includes resources and personnel such as those from research, manufacturing, sales, marketing and IT.
"This gives [the teams] the ability to go out into [the company] and make the changes they need to be successful in the market," Giancarlo said. "If you're an entrepreneur, there is nothing more satisfying than being with a company that can take what you've invented, and make it successful in the market."
Positioning technologists at Cisco to come up with start-up-like ideas and products is a good thing, says analyst Zeus Kerravala with the Yankee Group. With the pool of venture capital funding on the decline, "innovation has to be done somewhere."
"Cisco has been accused of being a good integrator, versus a good innovator," Kerravala says. Examples of this include all the various technologies -- from wireless LANs, to security and VOIP -- Cisco has morphed into its Catalyst 6500 switch and ISR router lines, for example. With its Emerging Technologies effort, Kerravala expects to see more innovation in video and consumer technologies.