John Chambers, a former CEO of Cisco, is suing his former organization.

John Chambers, a former CEO of Cisco, is suing his former organization. With about $50 billion in yearly revenue and enormous clients all over the world, John Chambers transformed Cisco during his two decades as CEO from a fledgling computer networking company.

After selling switches and routers for seven years, Chambers is now taking on his old company with a firm that will come out of stealth mode on Wednesday. Chambers, 73, has partnered with former Cisco development executive Pankaj Patel to create the Nile, a business that aims to revolutionize the corporate Wi-Fi industry.

It’s a market where Cisco has competed against Juniper Networks and Aruba Wireless, which is now a part of Hewlett Packard Enterprise, for years. According to Chambers and Patel, neither Cisco nor its current competitors have created the wireless technology required to fulfill the needs of the modern office, with its swarm of devices, a tendency toward hybrid work, and sophisticated security concerns.

In a CNBC interview, Chambers stated, “We’re building something that our old firm was not building. It’s an entirely new region. It’s not like we did something and are now attempting to improve it.

In the four years since he and the CEO, Patel, teamed up to launch the company, Nile has raised $125 million, albeit its investment rounds have remained private until now. Chambers claimed to control 10% of Nile via his investment company, JC2 Ventures. March Capital, 8VC, and Iconiq Capital are additional investors.

Since Nile’s technology has only been generally accessible to customers since May, the company still has a ways to go before discussions about market share are useful. The Nile has 20 production deployments, according to a spokeswoman, including those at Sprinklr, ThoughtSpot, and the University of Missouri-Kansas City.

A common phrase in the sector.

While Chambers and Patel were still employed by Cisco, a number of Silicon Valley entrepreneurs acquired significant amounts of capital while promoting a strategy known as “software-defined networking,” which included creating sophisticated software and installing it inside low-cost hardware. However, the incumbents, especially Cisco, bought their way into the industry, thus the excitement never materialized into significant new businesses.

With the launch of what it calls Cisco+ in 2021, Cisco has more recently begun allowing users to pay for networking as a service (NaaS). Additionally, HPE introduced GreenLake for Aruba earlier this year. However, according to Brandon Butler, an analyst at technology market researcher IDC, not many major corporations have entered into these kinds of agreements.

As Arista CEO in 2008, the pair hired Jayshree Ullal, a former top Cisco executive. Chambers took the action personally. Chambers “told executives to prevent Arista from getting any new business from Cisco customers,” the Wall Street Journal said in 2011. After that, his sales team organized a “Tiger Team” to obstruct Arista’s “promotion efforts and thwart its initial public offering strategy,” according to the Journal.

Cisco filed a lawsuit against Arista in 2014 alleging patent and copyright infringement. The lawsuit lasted for four years before Arista agreed to settle it by paying Cisco more than $400 million.

When asked about the comparison between his current work and those of former Cisco leaders, Chambers referred to it as a “legitimate question.” He said that he and Patel had left Cisco “for many years” and that they had since worked on about eight firms together. He claimed that the Nile is pursuing a market that is undergoing transformation and to which all the incumbents have been unable to adapt. He also said, “I’ve always felt that competition always comes from below.”

Chambers also mentioned another former employee of Cisco who left the business to found a successful rival company called Zoom. The CEO and founder of Zoom, Eric Yuan, joined Cisco in 2007 when that company purchased WebEx. He departed Cisco in 2011 when his efforts to develop a more contemporary video-conferencing system failed to gain traction within the company.

Zoom was founded by Yuan, and during the epidemic, it became well-known due to how simple it was to set up and use video chat on any device at work, at home, or while traveling. Yuan receives high praise from Chambers, who also uses Zoom for his online meetings (including this one).

Yuan was described by Chambers as “extremely innovative.” I wish we had moved more quickly to counteract that.