Cisco Gives Giancarlo the Nod

A veteran gets another promotion as investors wonder who might succeed Chambers.
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Cisco (CSCO) - Get Report has crowned a would-be king.

In the networking giant's second management shake-up in as many years, longtime exec Charlie Giancarlo will get another promotion, this time to the company's No. 2 job.

Cisco says Giancarlo will take the chief development officer post when Mario Mazzola retires at the end of this month, according to an announcement late Thursday.

Though Cisco's sprawling organization chart lists 25 senior vice presidents and doesn't exactly name Giancarlo as the second-in-command under CEO John Chambers, observers say the power structure is obvious.

Giancarlo has been a fast-rising star at Cisco. Last year, he was promoted to chief technology officer and named president of Linksys, Cisco's consumer and small business router unit.

Chambers isn't expected to leave anytime soon, but there has long been debate over who among Cisco executives would be likely to take his job. Cisco has been careful not to create a


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-type problem, by naming the next CEO in line and watching the rest of the team defect.

"I think the longer-term issue for Cisco is developing a succession plan," says JMP Securities analyst Sam Wilson, who expects Chambers to stick around for a while.

The problem is that Cisco's rise from a Silicon Valley upstart to a tech titan has elevated the CEO to a high-profile business celebrity status.

"They have as much ego strength as they have bench strength," says one observer. The presumption is that if the top job is unavailable to any given hard-charging Cisco vice president, exiting to run a start-up becomes a very compelling option.

The timing of the latest shake-up is somewhat interesting, given that Cisco's quarter ends this month and the company has not been able to revive its once-formidable growth engine.

But instead of signaling trouble, Cisco watchers say Giancarlo's rise is part of a broader infusion of new management blood at the growth-challenged tech giant.

In addition to Giancarlo's promotion, security tech chief Jayshree Ullal will add the storage and switching business to her list of responsibilities, replacing Luca Cafiero, who is retiring. And router technology chief Mike Volpi will also head Cisco's telco business as Prem Jain retires.

Analysts say the executive shuffle is probably not any indication of business trends, but more likely is related to the end of the company's fiscal year. This is a natural time to make management moves and reset priorities, say observers.

On Friday, Cisco rose 25 cents to $19.09.