Cisco CEO: Two-thirds of enterprise companies won’t exist in 25 years
Cisco CEO John Chambers doesn’t mince words when asked about the rapid transition of enterprise clients towards services that run in the cloud.
“Of the top 5 or 6 [top IT] players today, only 1 will exist in 5 years,” Chambers told Fortune’s Andy Serwer at Brainstorm Tech 2014 — a bold reference that presumably includes competitors HP (HPQ) and IBM (IBM). Even more dire, he predicted that just one-third of all major enterprise companies will exist in 25 years, becoming casualties in what he recently called a “brutal consolidation” of IT. As more businesses and organizations migrate, they rely more and more on networking solutions like those offered by newer services like Rackspace (RAX).
The Cisco CEO wasn’t all doom and gloom, however. Over the last 2 years, Cisco (CSCO). has set some extremely high goals for itself, including becoming the #1 IT company. It also wants to be at the forefront of a growing movement called the Internet of Things, where the majority of devices in the home — even that Whirlpool fridge — is connected to Web. And Chambers argues that’s possible because Cisco “isn’t afraid to disrupt itself”: killing services it rolls out quickly if in lieu of others that could yield better sales.
Chambers’s nearly 20-year reign has seen no shortage of controversy, particularly as CISCO has struggled to build successful new revenue streams beyond its traditional router business. (Indeed, Cisco’s stock hasn’t passed $35 a share since 2001.) Which has prompted speculation about when Chambers could might make way for a successor. Answered Chambers simply: “No comment.”