Cisco Systems, Inc. at a Glance

Uppers

  • Excellent work/life balance and flexible work options
  • Good benefit package

Downers

  • Finding a career path and earning promotions can be challenging for some employees

The Bottom Line

  • Cisco Systems is a well-respected technology company with a top reputation as employer.

About Cisco Systems, Inc.

Cisco Systems makes the network gear -- routers, switches, and servers as well as software -- that move information around the internet and corporate networks. The company, which has dominated the market for internet protocol-based networking equipment, also makes security devices, internet conferencing systems, set-top boxes, and other networking equipment to businesses and government agencies. Software that controls networks has become an increasing focus for Cisco, which also provides consulting services. Most sales come from customers in the Americas. Cisco's primary customers are large enterprises and telecommunications service providers, but it also sells products designed for small businesses.

Operations

The meat-and-potatoes of Cisco has been its switching equipment which generates 30% of its revenue while its next-generation networking routing gear accounts for 15% of revenue. Services provide about a quarter of the company's. The rest of the company's product lines are collaboration products (about 10% of revenue), data center (less than 10%), and wireless and security (about 5% each).

Cisco engages independent third-party contractors to make printed-circuit boards, conduct in-circuit testing, make product repairs, and assemble products.

Geographic Reach

While the Americas is Cisco's largest market, accounting for some 60% of its sales, about half its employees reside outside of the US. European customers generate 25% of revenue and the Asia/Pacific region supplies about 15%.

Cisco's headquarters is in San Jose, California. It also has regional headquarters in Amsterdam and Singapore. Cisco has a Globalization Center East campus in Bangalore, India. The company has other significant operations in Belgium, China, France, Germany, India, Israel, Italy, Japan, Norway, and the UK.

Financial Performance

Cisco Systems' revenue slipped 3% to $48 billion in 2017 (ended July) from 2016. Product revenue fell 4% while service revenue rose 3% year-to-year. Revenues from Switching and NGN Routing were off 5% and 4%, respectively, in 2017. Switching sales were hurt by lower sales of switches used in campus environments due to general economic uncertainty and competition. Sales in Security and Wireless grew by 9% and 5%, respectively.

Net income dropped 11% to $9.6 billion in 2017 from 2016. While the company reduced costs in 2017, it had a higher effective tax rate for the year.

Cash flow from operations closed out 2017 at $13.8 billion compared to about $13.6 billion in 2016.

Strategy

Cisco has been a hardware company, making the switches and routers and other devices that transfer information. But it is building up its software offerings for cloud computing and software-defined networks (SDN). Telecom service providers, in particular, are moving toward SDN to program their networks. In response, Cisco is shifting its business to a more subscription and software-based model. To address the emergence of SDN, the company offers its Application Centric Infrastructure (ACI), which delivers centralized application-driven policy automation, management, and visibility of both physical and virtual environments as a single system. The system is composed of Cisco's Nexus 9000 portfolio of switches, improved versions of its NX-OS operating system, and the Application Policy Infrastructure Controller (APIC).

In another software-centric strategy the company's Cisco DNA Center, a centralized management dashboard for its intuitive network, and ETA are available through subscriptions on the Cisco Catalyst 9000 Series Switches. Such moves get Cisco closer to cloud-managed products and services across our its networking portfolio. In 2017 (ended July), the company's deferred product revenue related to software and subscriptions grew to $5 billion, a 50% year-to-year increase and a doubling over two years.

The company is also addressing its software capabilities through acquisitions. In 2017 the company was to spend nearly $6 billion to shore up its software side in networking, file systems, and telecommunications.

In 2015, Cisco partnered with Ericsson to develop products and services in areas such as 5G, cloud computing, internet protocol, and the Internet of Things. Their goal is to add $1 billion in revenue for each company by 2018. The deal helps Cisco and Ericsson counter the merger of Alcatel-Lucent and Nokia, which created the second biggest provider of telecom equipment (Huawei is #1).

In 2017, Cisco teamed up with Google to build more efficient hybrid cloud offerings. They are to work on the security, configuration, and policy requirements of enterprises, as well as capabilities for delivering real-time networking and performance data.

Mergers and Acquisitions

Cisco actively acquires companies to expand technologies and fill gaps.

Cisco started 2017 with the $3.7 billion acquisition of AppDynamics, which develops software that monitors performance of applications. The acquisition further fills out Cisco's networking software lineup. Cisco's acquisition offer came just before AppDynamics sold stock to the public in an initial public offering. The deal, concluded in March 2017, reinforced Cisco's software-centric strategy.

In mid-2017 Cisco agreed to acquire Springpath Inc., a developer of a distributed file system built for hyperconvergence that enables server-based storage systems, for about $320 million in cash. The companies have had a relationship that includes development of HyperFlex, an integrated hyperconvergence infrastructure. Cisco also was an investor in Springpath. Hyperconvergence integrates computing, storage, networking, and virtualization resources in hardware.The deal further builds out Cisco's data center capabilities.

Cisco continued its software shopping spree later in 2017 with its agreement to buy BroadSoft, a developer of telecommunications software, for $1.9 billion. The deal would provide Cisco with a range of software and services that allow mobile, fixed-line and cable service providers to offer unified communications over their internet protocol networks. The transaction closed in early 2018.

In another 2017 deal Cisco acquired MindMeld Inc., an artificial intelligence company that develops conversational interfaces for applications and devices, for about $125 million. The acquisition would help Cisco build voice and text capabilities into its collaboration products.

In 2016 Cisco completed the acquisition of Jasper, which develops a cloud-based Internet of Things (IoT) service platform, for $1.4 billion. With the deal, Cisco can provide more comprehensive range of IoT products and services.

In 2016 Cisco completed the acquisition of Jasper, which develops a cloud-based Internet of Things (IoT) service platform, for $1.4 billion. With the deal, Cisco can provide more comprehensive range of IoT products and services.

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Cisco Systems, Inc.

170 W Tasman Dr
San Jose, CA 95134-1706
Phone: 1 (408) 526-4000
Fax: 1 (800) 818-9201

Stats

  • Employer Type: Public
  • Stock Symbol: CSCO
  • Stock Exchange: NASDAQ
  • Chairman and CEO: Charles H. Robbins
  • EVP and CFO: Kelly A. Kramer
  • Chairman and CEO: Charles H. Robbins
  • 2017 Employees: 72,900

Major Office Locations

  • San Jose, CA

Other Locations

  • Montgomery, AL
  • Bentonville, AR
  • Phoenix, AZ
  • Concord, CA
  • Costa Mesa, CA
  • Gold River, CA
  • Half Moon Bay, CA
  • Irvine, CA
  • Milpitas, CA
  • Pleasanton, CA
  • Rancho Cordova, CA
  • San Diego, CA
  • San Francisco, CA
  • Boulder, CO
  • Centennial, CO
  • Colorado Springs, CO
  • Denver, CO
  • Superior, CO
  • Farmington, CT
  • Norwalk, CT
  • Doral, FL
  • Fort Lauderdale, FL
  • Saint Petersburg, FL
  • Atlanta, GA
  • Lawrenceville, GA
  • Honolulu, HI
  • Melbourne, IA
  • West Des Moines, IA
  • Boise, ID
  • Bloomington, IL
  • Champaign, IL
  • Des Plaines, IL
  • Carmel, IN
  • Shawnee Mission, KS
  • Louisville, KY
  • Boxborough, MA
  • Columbia, MD
  • Frederick, MD
  • Detroit, MI
  • Southfield, MI
  • Bloomington, MN
  • Chesterfield, MO
  • Helena, MT
  • Charlotte, NC
  • Durham, NC
  • Fayetteville, NC
  • Iselin, NJ
  • Montvale, NJ
  • Moorestown, NJ
  • Albuquerque, NM
  • Las Vegas, NV
  • Albany, NY
  • Melville, NY
  • New York, NY
  • Beavercreek, OH
  • Cincinnati, OH
  • Dublin, OH
  • New Bremen, OH
  • Richfield, OH
  • Lake Oswego, OR
  • Allentown, PA
  • Guys Mills, PA
  • Malvern, PA
  • Bluffton, SC
  • Columbia, SC
  • Franklin, TN
  • Allen, TX
  • Dallas, TX
  • El Paso, TX
  • Houston, TX
  • Irving, TX
  • Lubbock, TX
  • Plano, TX
  • Richardson, TX
  • Roanoke, TX
  • San Antonio, TX
  • Spring, TX
  • Salt Lake City, UT
  • Herndon, VA
  • Richmond, VA
  • Bellevue, WA
  • Seattle, WA
  • Spokane, WA
  • Madison, WI
  • Kortrijk, Belgium
  • Brasilia, Brazil
  • Rio De Janeiro, Brazil
  • Calgary, Canada
  • Dartmouth, Canada
  • Edmonton, Canada
  • Kanata, Canada
  • Montréal, Canada
  • Nepean, Canada
  • North York, Canada
  • Ottawa, Canada
  • Regina, Canada
  • Spruce Grove, Canada
  • Toronto, Canada
  • Vancouver, Canada
  • Waterloo, Canada
  • Winnipeg, Canada
  • Guangzhou, China
  • Biot, France
  • Cesson Sevigne, France
  • Gellainville, France
  • Lyon, France
  • Mougins, France
  • Strasbourg, France
  • Toulouse, France
  • Wan Chai, Hong Kong
  • Chennai, India
  • New Delhi, India
  • Milano, Italy
  • Roma, Italy
  • Vimercate, Italy
  • Bulandet, Norway
  • Seoul, South Korea
  • Göteborg, Sweden
  • Skellefteå, Sweden
  • Stockholm, Sweden
  • Rolle, Switzerland
  • Taipei City, Taiwan
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