However, the big new market opportunities in front of Cisco are all in the emerging, developing markets, and there, the bloated cost structure will become a real problem as the Chinese start giving them a run for their money!
This is a difficult article for me to write, as I have friends at Cisco who are part of this “bloated” cost structure. The same applies to many of the BIG Silicon Valley employers like SUN, Oracle, Intel, AMD, etc.
But, almost inevitably, over the next 5-10 years, there is going to be a tremendous slimming down at all these companies, especially Cisco, where the emerging market opportunity is already well upon them.
The good news is that many of these people are from those very low-cost destinations which would absorb the impact of the downsizing. Perhaps, some of these employees would be happy to go back home. To make this transition smooth and effective, I invite you to read an earlier article: Team Of Twenty One.
The news for Silicon Valley is likely to not be that good, though. Most likely, real estate in San Jose, Cupertino, Fremont and other areas where these employees live today, would crash. An exodus of tens of thousands of people away from the valley would be a shock quite difficult to absorb, I presume.
But is there an alternative? Cisco’s fat, I am afraid, is unhealthy, and it would make them vulnerable to competition that is trim and nimble. China, particularly, is a country to fear.
As a shareholder, I do want to know what is Cisco’s slim down program.