John Chambers described his company’s previous organizational structure as seen from 2001:
“Our line of business structure served us well over the last four and a half years [from 1997 to 2001] as we grew from $6 billion in revenue to over $22 billion. However, we were beginning to experience product overlap and were less effective in sharing both resources and innovations across our broad engineering organization than I would have liked.”
On John Chambers’ outlook for the 2001 organizational structure  featuring technology silos:
“We moved to a structure that optimizes Cisco's ability to deliver a seamless Network of Networks. With this new organization, our three customer segments remain key to our future success, and will remain the core focus throughout our company.”
John returned to this theme of the Network of Networks in the 2004 Annual Report. Until then, he established three business councils for each customer segment – Enterprise, Service Provider, and Commercial. Each customer grouping was led by an experienced senior vice president to ensure focus was maintained.
He explained, in 2001, “Moving forward, I fully expect that our enterprise and service provider businesses will fluctuate on a yearly and industry trend basis as we have experienced over the last several years. What is difficult to forecast is the degree to which our enterprise customers will build their own networks, or outsource their needs to a service provider. Regardless of the balance, I believe Cisco is in a position to provide both solutions. Our goal is to be the number-one market player in all three segments as they move toward integrated data, voice, and video networks.
James Richardson described how Cisco maintains its entrepreneurial spirit:
“Innovation, entrepreneurial spirit, and taking calculated business risks have always been hallmarks of the Cisco culture.”
In the years leading up to 2002, most of the risk takers were entrepreneurs acquired from both successful (e.g., Cerent in optical transport) and failed (e.g., Qeyton Systems in Metropolitan WDM) startups. Cisco did a commendable job in retaining the engineering talent from these startups.
Examples of these “motivated” recipients include Paul Elliott, who became one of Cisco’s distinguished engineers in 2000 , although, after his Cerent options vested, Paul left Cisco as a multi-millionaire in 2001. As far as the Pioneer Technology Award program went, Jayshree Ullal lobbied hard for the optical transport team (primarily the Cerent folks) to be considered for the award. The ONS 15454 (formerly the Cerent 454) was a 2002 finalist for the Pioneer Technology Award, but not the winner .
James notes, “The Distinguished Engineer and Cisco Fellow programs were developed as a way of recognizing the contributions of key technical employees and allowing them to set and influence the company's technical direction, while encouraging them to communicate those developments to the industry at large . . . The Pioneer Technology Award program recognizes the contributions of engineering teams that drive the development of innovative products and core technologies to a new level of excellence.”
 Cisco’s 2001 reorganization was studied by many in academia. In one such study the authors “illustrate the notion of compensatory fit through an in depth discussion of a reorganization that occurred in 2001 at Cisco Systems, which appeared to have helped this company renew its capability base in order to pursue the cost-differentiation duality. We then revisit the ideas described in the illustration of the Cisco reorganization in a more rigorous and general theoretical framework.”
 Paul Elliott was Cerent’s second employee, hired by Ajaib Bhadare. He told me during our 2013 interview, “Ajaib and I had been talking and wanting to do something different for a couple of years. DSC was treating me well and I really had no complaints . . .” but Paul couldn’t resist the allure of startup Fiberlane, which would soon splinter, with the Petaluma team members forming startup Cerent.
 On the Pioneer Technology Program, Jayshree told me, “[The statue the ONS 15454 team received] says, ‘Pioneer Finalist in 2002.’ We didn’t get the award, but we got the finalist recognition, but I asked them to make a special one for us as a finalist. That [recognition] was huge. Too often the bigger company [Cisco] when they are swallowing the small company [Cerent] forgets the emotions and pride aspect. They think, oh yeah, they made a lot of money and that’s it. Money is a necessary but not sufficient condition for long-term health. Most of us do this for passion. There was a pride in the journey and a desire to go to the next phase of the journey.”