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Cisco Systems Inc
Cisco Systems Inc. (CSCO), the largest maker of computer-networking gear, said Padmasree Warrior is taking on an expanded role to oversee strategy, underscoring the company’s move away from the consumer-focused acquisitions favored by her departing predecessor, Ned Hooper.
Pankaj Patel, 58, will lead Cisco’s engineering organization, a job he shared with Warrior, 51, the San Jose, California-based company said yesterday in a blog posting. Hooper, 45, is forming an independent investment partnership company that will have Cisco as a partner.
The changes are part of a broader overhaul undertaken by Chief Executive Officer John Chambers last year to cut costs and bureaucracy and reverse market-share losses. To help Cisco focus on its main businesses of routers and switches, which handle Internet traffic, Chambers is also shutting consumer businesses that were bolstered by a Hooper-led acquisition spree.
“He doesn’t fit anymore in the new Cisco,” said Joanna Makris, an analyst at Mizuho Securities USA Inc. in New York. “Padma has much more of a bird’s-eye view of technology.”
Warrior will oversee deals activity as one of the most acquisitive companies in technology reconfigures strategy. Hooper orchestrated some of Cisco’s biggest purchases in his 13- year tenure. These include security firm IronPort Systems Inc., cable set-top box maker Scientific-Atlanta Inc. and conferencing software maker WebEx Communications Inc.
Yet his focus more recently turned to consumer companies, such as Pure Digital Technologies, which made the Flip Video camera. The foray left Cisco overextended in markets it doesn’t dominate, and Chambers discontinued sales of the Flip last year.
Cisco didn’t make executives available for interviews, and Hooper did not respond to a phone call and e-mail.
Chambers, who has worked at Cisco since 1991, said in 2009 that he planned to remain on the job at least another three to five years. He has been overhauling management to rebuild confidence among investors and customers who grew concerned that the company had expanded into too many new businesses.
Chambers has emphasized that Cisco is working on succession planning and that a number of current executives would be good candidates.
Makris said Warrior would probably be in consideration for the job along with other executives.
“I wouldn’t rule her out,” Makris said. “Within Cisco she’s in the inner circle. Whether or not she’s anointed, it’s too early to say.”
Warrior, who was hired from Motorola Inc. in 2007, is a frequent presenter at Cisco conferences and has a wide following on Twitter Inc. She has posted more than 10,000 times about Cisco and technology trends as well as personal notes, such as a tweet three days ago informing her 1.4 million followers that she was celebrating her 28th wedding anniversary.
At Cisco, Warrior’s focus has been on “unifying” businesses and selling the idea of how the products work together, a job that she has done well, said William Kreher, an analyst at Edward Jones & Co.
She also wrote a blog in 2007 that said she saw “nothing revolutionary or disruptive about any of the technologies” in Apple Inc.’s iPhone.
“As worshippers come out of the heady, enthralling, grandstand production called Macworld, the hype settles and reality sets in,” she wrote after Apple introduced the iPhone at an annual conference.
Apple has since sold more than 200 million of the devices.
Hooper’s departure marks another high-profile loss for Cisco, whose ranks of potential successors to Chambers has dwindled in the past five years. Charlie Giancarlo, the former No. 2 to Chambers, left in 2008 to join Silver Lake Partners. Jayshree Ullal, Mike Volpi and Tony Bates, who were all senior vice presidents, also departed in recent years, as did Hooper’s second in command, Charles Carmel, who left last year for Warburg Pincus LLC.
Hooper also ran a $2 billion venture capital fund within Cisco to invest in new markets and technologies. Cisco plans to work with Hooper in his role at the investment company, which the company declined to identify.
“Ned has been working on his plan with us over a number of months, and we look forward to partnering with him in his new endeavor,” Chambers and Chief Operating Officer Gary Moore wrote in the blog post.
The corporate strategy and business development team, which includes acquisitions, will report to Warrior, according to Cisco. Pankaj Patel previously ran Cisco’s service provider business, which sells to Internet providers and telecommunications operators.
Cisco fell 0.7 percent to $16.82 at yesterday’s close in New York. The stock has dropped 7 percent this year.
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