Cisco restructure: What implications for the channel?

Reporting lines to shift.

Big changes are in the works for Cisco's Worldwide Partner Organisation (WWPO) in the midst of Cisco's ongoing corporate restructuring, including yet-to-be-determined changes to the WWPO's share of Cisco's overall resource pool, a number of major Cisco executive shifts directly relevant to the channel, and some strategic moves that in theory will mean greater emphasis on partner-led sales with Cisco.

The various changes -- some strategic, some organisational, some tied to specific executives -- were confirmed to CRN by sources with direct knowledge of the WWPO and how Cisco is revamping both the WWPO and the global sales organisation during its restructuring.

The various moves come following several successive quarters' worth of disappointing earnings from Cisco and an ongoing series of high-profile headaches, including several major executive departures in recent months.

During Cisco's third quarter earnings call in early May, Cisco said it would look to remove US$1 billion in expenses by the end of its fiscal 2012, including broad cuts in underperforming business units and the promise of layoffs. That announcement came nearly a month after Cisco Chairman and CEO John Chambers hinted at organisational changes in an unusually candid memo to Cisco employees.

Cisco plans to shift its emphasis away from the 30 to 50 "adjacencies" -- that is, market segments where Cisco sees itself as a potentially dominant player -- and re-focus its efforts on five business categories. Those categories include its core businesses, including routing, switching, services, security and mobility, as well as collaboration, data center/virtualisation and cloud, video, and architecture for business transformation. That re-focusing was described to recent attendees of Cisco's Partner Executive Exchange (CPEE) conference.

Cisco doesn't plan to abandon any of the adjacencies it's been focusing on, according to sources, but will emphasise the five strategic areas and how those adjacencies might fit the profile of one or more of the five, rather than overwhelm partners with the possibility of investing in too many areas.

Elsewhere, Cisco has already made a number of executive changes as part of its restructuring, and according to sources, many more are about to become official.

Among the biggest executive changes are that two executives well known to the Cisco partner community will have higher-profile roles going forward. One is Chuck Robbins, senior vice president of U.S. enterprise, commercial and Canada markets, who according to sources has been bumped up to run all of Cisco's Americas-based sales. Robbins' ascent comes as Cisco has realigned its various worldwide sales theatres into three categories, down from nine. Americas is one, Europe, the Middle East and Africa, two, and Asia Pacific, China and Japan, three.

Robbins' new title is senior vice president of Americas, and all of the heads of Cisco's sales theaters within the Americas -- including, for example, Bruce Klein, senior vice president of Cisco's U.S. public sector organisation, and Michael Glickman, vice president of U.S. service provider -- now report to Robbins.

According to sources, Cisco wanted three single sales heads in each of its three regions with single-source decision-making power, as it hopes to simplify the sales organisation overall. Robbins has that role in the Americas and has total P&L responsibility for Americas sales. He reports to Rob Lloyd, executive vice president, worldwide operations for Cisco.

The re-organisation of Cisco's Worldwide Field Operations into the three regions was previously announced by Cisco in early May. Cisco's former Emerging Markets theater has been broken into two pieces, with Latin America moving under the Americas organisation and the rest now part of the EMEA organisation.

NEXT: A New Role For Cisco's Paul Mountford

Another big executive change is that former Cisco channel chief Paul Mountford, who was most recently president of Cisco's Emerging Markets Theatre, has a newly created role: senior vice president of worldwide enterprise.

What that means is that Mountford will be the one executive in charge of Cisco's technology architectures and the solutions and vertical markets focus that goes with them. The various technology architecture leaders within Cisco -- Ross Fowler, vice president of Borderless Network Architecture, for example, and Stephanie Carullo, vice president, data center and virtualisation -- now report to Mountford instead of Rob Lloyd.

Mountford himself reports to Lloyd, according to sources, and the "enterprise" in his title refers broadly to large enterprise customers, public sector customers, and commercial, or midmarket and SMB, customers.

Mountford's equivalent in Cisco's service provider business is Nick Adamo, who continues to lead Cisco's global service provider market segment from a sales perspective as senior vice president, service provider sales.

Specific to Cisco's WWPO, the roles of Keith Goodwin, senior vice president, WWPO, and Edison Peres, senior vice president, worldwide channel organisation, will not change, according to sources, nor will that of Wendy Bahr, senior vice president, global and transformational accounts.

Senior Vice President, U.S. and Canada Channels Jim Sherriff, however, will now report fully to Robbins, with a dotted line into Goodwin, instead of a full line to Goodwin and dotted line to Robbins. What that means, according to sources, is that Robbins will ultimately have more oversight of the channel sales organisation, as well as a say in the Americas sales resources that get allocated to it.

Cisco will have two go-to-market models: "customer-led," which will be Cisco's traditional high-touch selling motion for large and strategic enterprise accounts, and what Cisco's internally calling "partner-led," which according to sources will mean a greater focus by Cisco on sales through channel partners to all but its most strategic global accounts.

Philosophically, those sources said, the model will be good for the channel, and also could mean greater investment in partner-specific resources down the road, even though sources couldn't confirm whether the WWPO itself will see greater or less investment by Cisco in the short-term. Those conversations and decisions, the sources added, are happening now.

Specific to the WWPO's marketing investment, Cisco has not yet named a replacement for former vice president, WWPO marketing Luanne Tierney, who left Cisco for rival Juniper in January.

According to sources, Cisco expects to name Tierney's replacement within the next 30 days, and that executive will have a role expanded beyond Tierney's former purview. Specifically, the new WWPO marketing head will work more closely with Cisco's global marketing organization, headed by Chief Marketing Officer Blair Christie, and have even more Cisco resources at his or her disposal than Tierney did. Cisco Partner Velocity, the partner marketing-centric conference Tierney spearheaded, will likely continue, although the sources had no knowledge on whether Partner Velocity has been scheduled this year.

Read on for more on Cisco's executive reshuffle...