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Wireless Week
September 18, 2000
Listwin Leaves Cisco 'Status Quo' To Pursue New Digs
One of the biggest merger-and-acquisition stories this year-not just for
telecommunications but all industries-was the merger agreement in August
between Phone.com Inc. and Soft-ware.com Inc. One of the reasons for the
excitement was the selection of Cisco Systems Executive Vice President Don
Listwin to run the newly merged company. Wireless Week Data/IP Networking
Editor Brad Smith recently caught up with Listwin while he was shuttling
between jobs. Listwin's new post is only 18 minutes commute time from his
old job, but the two environments are much further apart.
Wireless Week: Tell us about your decision to move from the No. 2 job at
Cisco Systems, certainly one of the Internet powerhouses, to head what
basically will be a startup. How difficult a decision was it?
Listwin: You suggested this is a startup. I think it's a little past that.
We're approaching 1,500 employees, a quarter-million dollars in revenue and
150 customers, so it's past that sleeping-bag stage certainly. It has a
fine management team with an incredible amount of talent for a company of
any kind and particularly at this stage. The key thing is that I joined the
merger of the companies rather than leaving Cisco.
WW: How big a factor was it that [CEO] John Chambers does not appear to be
leaving Cisco anytime soon, which gave you little opportunity for
advancement at the company?
Listwin: People should realize I had a fabulous job at Cisco and was
involved in strategy and Wall Street and anything that I really wanted. But
the real opportunity here was to do what I'm particularly good at, which is
growth and using the Internet to change industries. The environment at
Cisco was going to be status quo for a number of years as the company
executed on strategies and plans that I and others put into place. This is
really about a learning opportunity and being able to work with people in a
new industry and the type of stuff that I love.
WW: Cisco is an investor in Software.com. What synergies and relationships
do you see going forward?
Listwin: Cisco will not have a seat on board. Alain [Rossmann] has
suggested broadening the board over time but the current structure will be
three members from Phone.com: Roger Evans (a general partner at Greylock
Limited Partners); (Phone.com CEO) Alain Rossmann as chairman; and (former
FCC Chairman) Reed Hundt. Then we've got myself, (Software.com CEO) John
MacFarlane and Bernard Puckett, a former senior vice president at IBM.
WW: Cisco will have an equity holding in the new company.
Listwin: That's right, approximately 3.2 percent.
WW: And obviously some prior relationships with Software.com. I'm wondering
what synergies and relationships do you see going forward vis- a-vis Cisco?
Listwin: The opportunity comes from the fact that Cisco is, I think, the
predominant supplier of Internet systems infrastructure, and our merged
company will be the predominant supplier of Internet software systems.
That's the model that I hope happens. Obviously, we would do this in an
open Internet architecture. I believe in that. It is what makes the
Internet, so there will be no exclusive relationships in any way. It will
be about working more closely with our joint customers and other partners.
WW: Alain Rossmann said that there are few business opportunities left like
that offered in the merged company. Is this really a merger without
boundaries?
Listwin: I think there is a tremendous opportunity that the Internet
provides. We've seen the Internet as a major technological disruption
turning into arguably one of the [biggest] sociological disruptions this
planet has ever seen from an opportunity perspective. Our view is that the
Internet allows you to break down proprietary models, or closed models, and
open them up. That in concert with the fact that technology is moving out
of the enterprise into the service provider infrastructure and added with
the view that these are going from exclusively wireline to wireline and
wireless. This does provide a huge opportunity to become a key player in
carrier class software. That's what this merged company is all about.
WW: You have some established personal relationships already with the
carriers. How important do you see those being?
Listwin: I would say they are valuable, not strategically indispensable,
but certainly valuable. I have relationships with many senior executives at
Internet companies and at large carriers like AT & T and SBC and others. So
it certainly provides some access. I think for the most part it is a
trusted relationship. I've always tried to deliver what we said we could
do. I would hope that trust can be extended to this new environment.
WW: What about with the wireless community?
Listwin: Very modest for me. This is an area that Cisco has just begun to
get engaged in over the last six months so my relationships there are just
starting. I do know some people through our relationship with Motorola
because I had done the deal with them, and we've done some work with Nokia.
I know some of the carriers as we began talking to the carriers about IP
backbones but nowhere near the type of relationship that Alain [Rossmann]
has, for instance.
WW: Some people have compared the opportunity for the new company to the
opportunity that Cisco and Microsoft initially had in their markets. Is
that a good comparison? Can the merged company be the next Cisco or the
next Microsoft?
Listwin: Wow. Microsoft and Cisco are companies of the ages. It remains to
be seen whether or not we can occupy such a lofty position. That being
said, I think we've got the market, the technology, the products and the
talent to take a run at it. But there's a whole lot of execution between
now and the intervening years to be anything like one of those companies.
WW: What do you see as the biggest challenges for the new company?
Listwin: In the short term the biggest challenge is to get through the
integration seamlessly while continuing to focus on our customers.
WW: Two corporate cultures coming together sometimes don't fit all that
well. Can you compare the two corporate cultures here and how they fit?
Listwin: In the broad sense, the cultures are very similar. [First], they
are customer driven as organizations. And they are very focused on being
No. 1 in whatever they do. They both move very, very quickly and try to
have fun as they are doing it. Where they are compPhone culture is a stronger sales-oriented culture and perhaps Software.com
is more of a technology-driven culture. We find those things to be
extremely complementary and will contribute to the foundation of success
for the company.
WW: How difficult will it be to bring those together?
Listwin: We see that working exceptionally well, both from a complement of
talent perspective and from our leadership. John MacFarlane will be
executive vice president of technology and product development. Alain
[Rossmann] will be executive vice president of strategy and corporate
development. They are both very good at those things. And in the operations
area, sales and marketing and finance, these groups will report directly to
me. From a skills perspective the three senior executives have a very nice
fit.
WW: Cisco has been known for its aggressive acquisition strategy, in which
you've played a role. Phone.com also has moved beyond its original borders
through acquisitions. How important will mergers and acquisitions be for
the new company?
Listwin: I expect the mergers and acquisitions will continue to play an
important role. But my experience has been that it is somewhat more complex
to bring software technology together, and it takes a bit longer to
integrate and bring to market as it does with systems software, where it is
quite straightforward. That being said, I believe the joint companies have
done 12 acquisitions, not counting the merger. They both have been active
in this area, and I expect that they will continue to be active. |
