Cisco's ambition in moving into these and the other markets caused it to forsake its bread-and-butter business. In the end, the company killed off a big chunk of its ambition. How many more of those 30 market adjacencies will end up the same way?

Chambers said the product transition that caused a plunge in switching revenue and profits in the second fiscal quarter took the company by surprise. In a , Chambers said the company lost focus, and was slow to make decisions and execute. He said Cisco needed to better align operations with innovation (i.e., product development).

Chalk these shortcomings up to distraction. For whatever reason, Cisco , injecting the market with lower-margin/higher-performance gear that killed demand for more lucrative platforms. It upset the balance.

Perhaps Cisco was preoccupied with the performance of all of its newer businesses? Perhaps distracted by the disappointing results in its consumer business? Perhaps plotting the eventual closure of the Flip videocam business?