Cisco Commences Overhaul, Shuts Down Flip Cam

by Jordan Richardson on April 13, 2011

Cisco is going through some significant ch-ch-ch-changes, that’s for sure. In an effort to “align its operations,” the company has announced a restructuring of its consumer businesses. First up on the chopping block is Cisco’s Flip video camera business – and 550 employees.

The San Jose-based company’s plans to “align its operations” will see the remaining consumer businesses draw in to support Cisco’s key priorities: core routing, switching and services; video; collaboration; and architectures. The loss of the Flip cam business is to streamline the company to place it more in touch with its priorities. Cisco promises to provide current FlipShare customers with a “transition” plan that will help ease the pain.

Cisco bought Pure Digital, the company behind the popular Flip Video cameras, just a couple years ago for $590 million. Since then, the company has seen other consumer products hone in on what the Flip could do and finally took the opportunity to dump it. The focus now is away from the standard consumer and toward the enterprise consumer.

In many ways, this is good news for Cisco. The opportunity to focus on what the company is good at is something it needs badly and many have felt that its focus on standard consumer products has distilled Cisco’s frontline business.

Along with ditching the Flip cam, Cisco is announcing a plan to realign its “Home Networking business for greater profitability and connection to the company’s core networking infrastructure as the network expands into a video platform in the home.”

“We are making key, targeted moves as we align operations in support of our network-centric platform strategy,” said John Chambers, Cisco chairman and CEO. “As we move forward, our consumer efforts will focus on how we help our enterprise and service provider customers optimize and expand their offerings for consumers, and help ensure the network’s ability to deliver on those offerings.”

So will this plan to concentrate its efforts on enterprise customers work in Cisco’s favour? At this point, there’s really nothing to lose. In its bid to regain market confidence, Chambers’ company will have to stick by its “bold steps” and “tough decisions.” There’s no room for turning back now.

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