The spin-in culture that developed some major innovations and once shaped a ton of advanced technologies at Cisco isn’t dead but it sure is unrecognizable.
That’s because the notions of innovation and developing new ways of bringing cutting-edge technology to the networking arena at least from Cisco has changed.
The spin-in model was very successful for Cisco as a way to bring new products quickly into new markets. Over time products such as Andiamo Systems for SAN switching, Nuova Systems for data center switching and Insieme Networks for software-defined networking systems that have all become multi-billion dollar products for the company and all were developed outside Cisco and “spun” back in.
The business model was a favorite of previous Cisco CEO John chambers – but not so much current CEO Chuck Robbins who has been in charge for a little over a year now.
In an recent interview with Network World Robbins cleared up his stance on the spin-in model saying it was not dead: “I’ve said that if there are situations where spin-ins make sense we will absolutely consider them and execute against them. We have multiple levers we pull on innovation. We have our own R&D capability. We clearly have our acquisition strategy. We now have deep strategic partnership capability in addition to our historical success in our classic ecosystem,” Robbins said. “We have the ability to invest from our balance sheet which we’ve connected more tightly to our overarching strategy and we’ve begun to really execute on this co-development effort with customers around this iterative design process. In the acquisition space, we’re absolutely open to spin-ins if the requirements of what we’re trying to accomplish align more directly with that as a solution.”
Indeed what Robbins has formed is a more open field for innovation within Cisco through programs such as Alpha, which encourages small teams of Cisco engineers looking at specific problems across networking, security, collaboration and other areas that are important to Cisco. Hilton Romanski, chief strategy officer with Cisco, told Network World in a February interview that Alpha projects typically last two to three years to develop a product.
“In the next couple of quarters you’re going to see us launch at least two of these Alphas into the marketplace and it’s going to be a great testament to having a traditional engineering model but, at the same time, being able to take what we’ve learned from startups outside of Cisco and bring that into the DNA of the company. That’s a good example of where we’ve worked with engineering to drive things differently,” Romanski said.
In a blog post published in August Sumeet Arora, who leads engineering development for Service Provider infrastructure products at Cisco, wrote that Cisco alpha projects are a great example of valuing and generating innovation from within. “Over the last two years, there are many alpha success stories. My team’s project focused on innovating and building products for hyper-scale infrastructure. This meant combining deep customer listening, cross-company collaboration, busting silos and bottlenecks with a team that represented the best networking talent, all at a tire burning and gravity-defying speed. Thus, our internal code name for this project was xSpeed. The xSpeed alpha project disrupts our own product portfolio and processes in a significant way. This, in turn, forces us down a path of further innovation and new frontiers; frontiers that are broader than the current technology spectrum and promise exciting times for us engineers,” he wrote.
“What Robbins has done is democratize the development process within Cisco, said Zeus Kerravala, who is the founder and principal analyst with ZK Research. “This process he has in place now allows for innovation to come from more parts of the company – anyone who has an itch to be an innovator can do so from within their day job.”
Another interesting angle is in the networking arena that deep-pocketed Cisco could afford to develop technologies outside the company and buy them back. Not many networking competitors could afford to do that.
“The closest thing to a spin-in might have been Juniper and its QFabric development," Kerravala noted. QFabric was designed to create a flat structure of servers, storage and networking for data center resources, Kerravala noted.
Kerravala and others said that the way some of the innovative technologies were developed at Cisco – especially around the time of the most prominent spin-in Cisco leaders (Mario Mazzola, Prem Jain, and Luca Cafiero and Soni Jiandani known as MPLS) -- created animosity around the company despite their astounding success.
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The four left Cisco in a highly publicized resignation earlier this summer and with them, the spin-in business model as Cisco knew it.
“I would be very surprised if you saw another spin-in emerge under Robbins like the three founded by these engineers. There’s the “Alpha” internal start-up project, billions in funding with other start-ups and a slew of other avenues for Cisco to pursue for innovation” said Jim Duffy, a senior analyst with 451 Research. "Robbins needs all hands on deck and spin-ins created an acrimonious hierarchy internally. Anything’s possible, but I doubt we will see another structured funded and rewarded like these were."