Carson Chen

Carson Chen hasn't made any public announcements about cutting his salary to $1 a year. He'll leave that kind of grandiosity to his boss, Cisco Chairman and CEO John Chambers, and happily cash each paycheck he gets as vice president and general manager of Cisco's Cable & Wireless Business Unit.

He'll also let Chambers handle the 8500 job cuts for a company that was — and perhaps still is — the darling of the new telecom era, although he will surely share the pain of losing some of his own people.

Finally, Chen will share his boss' concerns about a company that seems to be spiraling downward in the stock market, in customer orders and, perhaps most dangerously, in public perception. Even Chen's area — cable and broadband fixed wireless — is seeing the impact, although to a lesser extent than other parts of the overarching telecom giant.

“We're seeing somewhat of a pullback by some of the [multiple systems operators] in terms of ordering, or what have you,” Chen admits.

Nevertheless, the company has no intentions of cutting back on its aggressive broadband strategy. “We have a heavy investment in broadband. We believe in it,” Chen says. “We believe that full action has begun, and there's no going back.”

A significant portion of that investment and focus is on high-speed data, where Cisco is spreading its bets between cable and broadband wireless with an interest in DSL.

“Clearly, business services — things like telecommuting — are prime. You get much better rates than the normal $39 per month,” Chen says. “As MSOs start looking at providing multiple services, one layer they need to do is provide open access [to multiple ISPs] and shore up the technology for policy-based routing. We continue along those thrusts.”

The movement is stutter-stepping.

“The markets have made it a little bit more difficult,” he says. “I think everybody is being cautious.”

Cisco itself is in the turmoil one might expect at an acquisitive company that has hit the first economic bump of the new millennium. In addition to the 8500 job cuts, Cisco has written off $2.5 billion of unsold stock because of a lack of product demand. The company is in the midst of a $1.2 billion restructuring. Some of that touches Chen's group; much of it doesn't. “Cable is in pretty good shape,” Chen says. “We're going to be impacted to a small degree, but it's really areas that aren't necessarily producing the revenue that we anticipated.”

And that doesn't include fixed-broadband wireless?

“The wireless business is just in an embryonic stage right now,” Chen said. “We just started introducing products within the last quarter.”

But the market holds promise, he says.

“Wireless provides an opportunity where the infrastructure isn't that expensive. There's no plant to worry about, no plant to upgrade. The plant is in the antennas and radios,” he says.

Cisco doesn't sell those. It plays in the backend, where it can use the same routers it runs on wireline cable systems and merge many of its standards-compliant DOCSIS products with wireless ones. That includes a very public marriage of vertical ortgonal division multiplex technology with DOCSIS.

Cisco's big opportunity, however, has fiber and coaxial cables and cable modems attached to it. Cable is an industry that prides itself on being recession-proof, but that was when it was an entertainment option. High-speed data is a different matter. “When things are difficult, people want to be entertained, so they spend more time at home with the cable service,” Chen says. “They'd rather cut back on everything else and keep their cable service connected.”

Chen's faith in the demand for broadband is unwavering. “Broadband is addictive,” he says. “Once you have it, you don't want to go back. People still want broadband, both in the DSL and cable broadband space.”

Even with this pseudo-positive outlook, Chen admits that things are not as all-out happy at Cisco as they were a year ago when the company was at the top of its game — and the top of the stock market. As a result, Cisco is doing some personal grooming, removing some of the pieces it acquired that don't quite fit and “aren't necessarily producing the revenue that we anticipated,” Chen says, adding, “We still have a policy of growing very quickly.”

Besides, a little paranoia among the employee base keeps things sharp.

“We try to keep a culture of bizno-techno,” he says. “It's not just technologists developing technology for technology's sake. All these folks are being paranoid as part of the Cisco culture and looking out for the business.”

Even if that business seems to be going less smoothly than in the past?

“It's absolutely as exciting. The team has not slowed down. The market has slowed down a little bit, but the team is aggressively pursuing the road maps that they had in place,” Chen says. “Once we come out of this, whenever it is — three, six, nine months — there's going to be so much demand for these additional services, and we're pursuing each one of those areas.”