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Cisco announces major restructuring plan

Vendor plans to reorganise business around eleven operating units, to enable greater focus on technology

Cisco Systems is planning a major restructure to simplify engineering and marketing operations. The move, announced at the time of going to press, will see the company split into eleven operating units. John Chambers, chief executive of Cisco, said the aim is to restructure along product lines, rather than customer type.

“Our line of business structure has served us very well in the past when customer segments and product requirements were very distinct,” he explained. “Today, the differences have blurred between these customer segments.”

The moves will not harm the channel, according to Charlie Giancarlo, VP and GM. “Our sales force is not changing. To the extent that anyone in the channel interacted with specific people within Cisco, they will probably be interacting with the same people tomorrow. The only difference is who those people will report to might change.”

Previously, engineers and developers were organised by customer segment: small- and mid-sized business, enterprise and service provider. Under the new plan, they will be organised by the following technology areas: access aggregation, Cisco IOS Technologies Division, Internet switching and services Ethernet access, network management services, core routing, optical, storage, voice and wireless.

The move was welcomed by Wall Street, as Cisco’s share price rose by 6% on the announcement.

The move has been met with mixed responses from US channel partners. Some resellers have said that they will welcome being able to focus on the relevant technologies, while others have said the move is confusing. Whether resellers will now have to deal with eleven different sales people instead of just one is also unclear.

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