John Chambers, Cisco Systems executive chairman (NASDAQ:$CSCO), will be not be running for re-election in December. Chambers, who has served on the board since 1993, will be replaced with current Cisco CEO Chuck Robbins.
As CEO from 1995 to 2015, Chambers saw Cisco’s annual sales rise from $1.2 billion to $50 billion. However, the company began to stagnate in 2010 and a double-digit percentage increase hasn’t been seen since.
The change is to blame on changes in the internet. Cisco largely formed the backbone of internet technology from the beginning. However, a change to remote, cloud-based computing has left the company behind. Companies like Amazon (NASDAQ:$AMZN) have been using cloud technology to remotely provide services to consumers from central hubs.
Robbins has been looking to steer the company in a new direction, away from the high priced hardware that provided the company’s backbone for so long. Robbins hopes to increase demand by making the products do more for the customers. This includes adding software management and stand-alone services over the internet.
In order to accomplish this, Cisco has made an number of acquisitions including a $320 million purchase of Springpath Inc (Traded Privately), which provides data-center technology. Of particular interest to Cisco is Springpath’s hyperconvergence technology, which allows for server-based storage systems.
Last December, at its annual meeting, the board reduced its size to 11 members, 10 of which act as independent directors. At 68, Chambers is just shy of the Cisco board’s mandatory retirement age of 70.
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