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About Cisco Ironport Systems LLC

Cisco Systems (Cisco) is a maker of the network gear -- routers, switches, and servers as well as software -- that moves 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 and other networking equipment for businesses and government agencies. Software that controls networks has become an increasing focus for Cisco, which also provides cloud connectivity. 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 and public sector.

Operations

Cisco offers products and services in four categories.

The company's infrastructure platforms, which generate 55% of its revenue, consist of switching, routing, wireless, and data center products that provide networking capabilities and transport and store data.

Applications, which account for more than 10% of revenue, are primarily software-related offerings that run on the company's networking and data center platforms. The applications include collaboration offerings (unified communications, Cisco TelePresence, and conferencing) as well as AppDynamics and Internet of Things software.

The Security product category, over 5% of revenue, includes network security, cloud and email security, identity and access management, advanced threat protection, and unified threat management products.

The Other Products category consists of cloud and system management products and emerging technologies products. The Services segment, beyond 25% of revenue, provides service and support for customers, including comprehensive advisory services.

Cisco contracts with independent third-party companies to make printed-circuit boards, conduct in-circuit testing, assemble products, and make repairs.

Geographic Reach

Cisco does well in the US and the Americas, which account for some 60% of its sales. Internationally, Cisco runs up against competitors like Huawei and Nokia, which have strongholds in Asia and Europe, respectively. Cisco gets more than 25% of its revenue from customers in the Europe, Middle East, and Africa region and customers in the Asia/Pacific, China, and Japan region supply 15%.

Cisco's headquarters is in San Jose, California, and it has regional headquarters in Amsterdam and Singapore. The company has significant operations in Australia, Belgium, Canada, China, Germany, India, Japan, Mexico, Poland, and the UK.

Sales and Marketing

Cisco customers primarily operate in the following markets: enterprise, commercial, service provider, and public sector.

In enterprise market, the company offers service and support packages, financing, and managed network services through service provider partners. Cisco sells these products through a network of third-party application and technology vendors and channel partners, as well as selling directly to these customers. In commercial, it also sells through a combination of its direct sales force and channel partners. Service providers offer data, voice, video, and mobile/wireless services to businesses, governments, utilities, and consumers worldwide. Public sector (include federal governments, state and local, and educational institution) sell through third-party application and technology vendors, channel partners, and direct sales.

Advertising costs were approximately $187 million, $204 million, and $166 million for fiscal 2020, 2019, and 2018, respectively.

Financial Performance

Cisco's revenue has trended higher in the past five years with some fluctuations on the way. The company's net income has followed a similar pattern. Total revenue in fiscal 2020 decreased by 5% to $49.3 billion compared with fiscal 2019. Product revenue decreased by 8% and service revenue increased by 3%.

The company's total revenue reflected declines across each of their geographic segments. Product revenue for the emerging countries of BRICM, in the aggregate, experienced a 25% product revenue decline, with decreases in India, China, Mexico and Brazil.

The company's net income increased to $11.2 billion in 2019 compared to $11.6 billion in the prior year.

In 2020, Cisco had about $11.8 billion in cash compared to $11.77 billion in 2019. Its operations generated $15.4 billion in 2020 and investing activities provided $3.5 billion, while financing activities used $18.9 billion (including $2.6 billion spent to repurchase stock).

Strategy

As the company's customers add billions of new connections to its enterprises, and as more applications move to a multicloud environment, the network becomes even more critical. Cisco's customers are navigating change at an unprecedented pace and the company's mission is to inspire new possibilities by helping transform its infrastructure, expand applications and analytics, address its security needs, and empowers its teams. The company believe that its customers are looking for intent-based networks that provide meaningful business value through automation, security, and analytics across private, hybrid, and multicloud environments. Cisco's vision is to deliver highly secure, software-defined, automated and intelligent platforms for its customers.

The company are expanding its research and development (R&D) investments in certain product areas including cloud security, cloud collaboration, and application insights and analytics. Cisco are investing to optimize its product offerings for application to education, healthcare and other specific industries. Cisco also make investments to enable increase automation and support the customer as the workplace changes. In addition, it also continue to remain focused on investments around Software-Defined Wide Area Network (SD-WAN), multicloud environments, 5G and WiFi-6, 400G speeds, optical networking, next generation silicon and artificial intelligence (AI). Cisco are also accelerating its efforts to enable the delivery of network functionality as a service.

Mergers and Acquisitions

Cisco regularly acquires companies to expand technologies and fill gaps.

In mid-2020, Cisco completed the acquisition of ThousandEyes. ThousandEyes' internet and cloud intelligence platform expands visibility and insights into the digital delivery of applications and services over the internet and the cloud. ThousandEyes enables organizations to visualize any network as if it was their own, quickly surface actionable insights, and collaborate and solve problems with service providers. Financial terms were not disclosed.

Cisco agreed to buy Voicea, which provides meeting transcription, voice search, and meeting highlights, to add to its Webex portfolio of products. Voicea's technology blends artificial intelligence and automated speech recognition to provide digital notes from meetings. 

In 2019, Cisco agreed to buy Acacia Communications, which designs and manufactures high-speed, optical interconnect technologies, for about $2.6 billion. The deal allows Cisco to amplify its switching, routing, and optical networking products to address customer demanding for faster transmission of data. Acacia would join Cisco's Optical Systems and Optics business. The transaction was expected to close in second half of Cisco's 2020 fiscal year.

In 2019, Cisco acquired privately-held Luxtera, which uses silicon photonics to make chips with optics capabilities for faster transmission, for about $596 million. Cisco bought Luxtera's technology to increase the speed and capacity that its networking equipment can provide for webscale and enterprise data centers, service provider market segments, and other customers.

Cisco Ironport Systems LLC

170 W Tasman Dr
San Jose, CA 95134-1706
Phone: 1 (650) 989-6500

Firm Stats

Employer Type: Privately Owned
Vice President Software Engineering Serv: Rob Esterling
Vice President: Ambika Gadre
Partner Business Manager: Tom Kelchner
Employees (This Location): 260
Employees (All Locations): 520

Major Office Locations

San Jose, CA