Why is cisco such a big name?

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Cisco is involved in the design, production and selling of networking equipment. Cisco isn't the first company to develop network nodes. Then why is it so successful? "Cisco" is short for San Francisco, the city where Stanford computer scientists Leonard Bosack and Sandy Lerner founded the company in 1984. Cisco Systems Inc. is an American multinational company that operates in the Networking industry. Cisco was the first company where commercial routers were capable of multiple network protocols. The classic CPU architecture in their early devices set them apart as well. Their devices were very advanced and hardware was rarely an issue.

Cisco is by no means a household name but their name has been heard they’re one of the world’s biggest networking companies being valued over 200 billion dollars placing them as number 64 in the fortune 500 lists. Through its numerous acquired subsidiaries, such as OpenDNS, Webex, Jabber and Jasper. Cisco specializes in specific tech markets, such as the Internet of things (IoT), domain security and energy management.

Cisco - Company Highlights

Startup Name cisco
Headquarters San Jose, California, United States
Sector Public
Industry Networking Hardware, Networking Software
Founders Leonard Bosack, Sandy Lerner
Founded December 10, 1984
CEO Chuck Robbins
Areas served Worldwide
URL www.cisco.com

Cisco - What is Cisco?
Cisco - Logo and Meaning
Cisco - Founders And Team
Cisco - How it started?
Cisco - Growth by Acquisition
Cisco - Business Model
Cisco - Revenue
Cisco - Funding and Investors
Cisco - Investments
Cisco - Products
Cisco - Competitors
Cisco - Mistakes and Downfall
Cisco - Future plans

Cisco - What is Cisco?

Cisco Systems, an American technology company, operating worldwide, is best known for its computer networking products. As a company that sold its products mostly to other businesses, Cisco did not become a household name, but in the second decade of the 21st century, it was one of the largest corporations in the United States. Cisco was founded in 1984 and has its headquarters in San Jose, California.

Cisco - Logo and Meaning

Cisco logo depicts the two towers of the Golden Gate Bridge in San Francisco, California.

Cisco Logo
The Golden Gate Bridge

The name "Cisco" was derived from the city name San Francisco, which is why the company's engineers insisted on using the lower case "cisco" in its early years.

Cisco - Founders And Team

Sandra Lerner and Leonard Bosack are the founders of cisco.

Sandra Lerner and Leonard Bosack, founders of cisco

Sandra Lerner and Leonard Bosack a married couple (later divorced) who had met while students at Stanford University, founded Cisco. After graduating in 1981, they worked at the school, directing the computer facilities of two different departments. They were heavily inspired by the Standford technology that was used in the early 1980s. Bosack found a way to link their respective computer networks using technology that other Stanford employees had devised in the 1970s. He and Lerner came to recognize that router technology, as it was called, could be adapted very profitably for large-scale use outside the university. In December 1984 the two founded Cisco Systems (originally written “Cisco Systems”), taking the company name from the city of San Francisco. Stanford eventually licensed its proprietary software to Cisco.

In 1985, Cisco sold its first product, a network interface card for Digital Equipment Corporation’s computers. It's first big success, a router that served multiple network protocols, came the following year. In 1990, soon after Cisco sold its first shares of stock to the public, Lerner was ousted from the company, and Bosack subsequently quit.

Chuck Robbins became the CEO of Cisco replacing John Chambers.

Chuck Robbins, CEO of cisco with John Chambers, ex-CEO of cisco

This revitalized the company. Chuck Robbins brought an outside perspective as he had been at that company for past 17 years and this did help the company as they shifted their focus to cloud-based networking and this picked up the company from the fall. They sold to consumer companies like Technicolor for 600 million dollars and invested in newer startups like Velocloud. And in February of 2017, they launched their cloud-based secured internet gateway called Cisco Umbrella.

In my opinion, they simply just spread too thin and just needed focus on what they want to focus best on, to find success once again.

And just 2 years ago, they bought an AI-driven business intelligent company called accompany for 270 million dollars and today they are doing better than ever before.

Cisco - How it started?

Cisco was off to a pretty rough start due to inner conflicts among members, but their small team made things happen.

In 1985 they sold their very first product which is a network interface card which they sold to Digital Equipment Corporation. But the following year was the one when they came out with their first blade successful product. This was simply a router. What made it special was that it served multiple network protocols. This router was so successful that they required more cash to expand and as the result, they turned to investment.

In late 1987, the venture capitalist from Sequoia Capital took control of the company. This might have appeared to them as the right thing to do but it came back to bite them later. Just a couple of months they came, they changed the president and CEO of Cisco. The new CEO didn't get along well with the founders of the company. Despite this, the company continued to grow and on February 16, 1990, the company went public on NASDAQ with a market cap of 224 million dollars. But unfortunately soon after, in August 1990, Sandy Lerner and Bosack both left the company. They walked away with 170 million dollars. As for Cisco systems, they were still doing good, but they completely transitioned from a family-owned business to a very corporate business.

In the early 1990s, they used their savings and put it towards a few part companies like grand junction and similar other companies that formed the capital business unit.


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Cisco - Growth by Acquisition

Over the past four years, Cisco Systems Inc. has been on a mission: to dominate its data networking market much as I.B.M. did with mainframes and as Intel and Microsoft have done with personal computers. In order to fulfill this ambitious goal, Cisco, based in San Jose, Calif., has gone on a major buying spree, acquiring 14 companies since late 1993. Cisco grew and adapted to its changing environment. As the internet age rose, Cisco adapted to the internet protocol during the mid to late 1990s. They introduced products like ASA 5200 and GSR(Gigabit Switch Router) routers but just like any other technology company during this time, the dot-com bubble heavily influenced their growth. But Cisco was able to carve benefits from the dot-com bubble more than any other technology company.

In fact, by late March of 2000, Cisco became the most valued company in the entire world(valued over 500 billion dollars). But of course when the dot-com bubble burst Cisco Systems experienced a significant decline just like any other technology company like Dell and Oracle. But none of the other companies has reached the heights that Cisco Systems had reached and as a result, they weren't hurt as deeply.

Cisco Systems plans to dominate its market and is well on the way, having acquired 14 companies since 1993. While many acquisitions bring with them attendant stress, Cisco has more than doubled its sales and net income in 1996. The secret: not just buying, but finding organizational synergies prior to the purchase.


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Cisco - Business Model

Cisco makes money by selling networking and communications equipment and software that are the backbone of the Internet.

  • Infrastructure Platforms: Revenues are derived from the sale of core networking technologies of switching, routing, data center products, and wireless.
  • Applications: Revenues are derived from the sale of software-oriented offerings that sit on top of Infrastructure Platforms, such as collaboration (Cisco TelePresence etc) and internet of things (IoT) and analytics software.
  • Security and Other products: Revenues are derived from the sale of threat detection, management and security products and cloud and system management tools. This segment also used to house the company’s Service Provider Video Software and Solutions business, which was hived off in 2018.
  • Services: Revenues are derived from providing technical consulting and support services.
“The networks that we build we’re going to have to think about fundamentally differently, there is no room for technology religion,” Mr. Robbins said.

Over more than three decades, Cisco Systems became a Silicon Valley giant partly because of one facet of its business: technological complexity.

Managing Cisco’s many varieties of networking equipment, which help computers exchange data, became such a convoluted process over time that customers who learned to do so became loath to try competing products.

But that pattern can’t go on, according to Chuck Robbins, Cisco’s chief executive, who took over the company in 2015. At Cisco’s annual technology conference, he declared that technical shifts were affecting how all companies used the internet, forcing Cisco to rewrite its product playbook.

Cisco - Revenue

  • Cisco revenue for the quarter ending July 31, 2020 was $12.154B, a 9.49% decline year-over-year.
  • Cisco revenue for the twelve months ending July 31, 2020 was $49.301B, a 5.02% decline year-over-year.
  • Cisco annual revenue for 2020 was $49.301B, a 5.02% decline from 2019.
  • Cisco annual revenue for 2019 was $51.904B, a 5.22% increase from 2018.
  • Cisco annual revenue for 2018 was $49.33B, a 2.76% increase from 2017.

Source: macrotrends

Cisco - Funding and Investors

Cisco has raised a total of $2.5M in funding over 1 round. This was a Series A round raised on Jan 1, 1987.

Date Stage Amount Investor
Jan 1, 1987 Series A $2.5M Sequoia Capital

Cisco - Investments

Cisco has made 210 investments. Their most recent investment was on Oct 7, 2020, when Illusive Networks raised $24M.

Date Stage Amount Organization Name
Oct 7, 2020 Series B $24M Illusive Networks
Aug 5, 2020 Grant $25K Respira Labs
Apr 2, 2020 Series C $230M Illusive Networks
Jan 29, 2020 Venture Round $8.6M Illusive Networks
Oct 30, 2019 Venture Round $7.6M Illusive Networks
Mar 20, 2019 Series C $27M Illusive Networks
Mar 12, 2019 Venture Round $50M Illusive Networks
Jan 2, 2019 Series G $10M Illusive Networks
Dec 1, 2018 Grant $300K Illusive Networks
Oct 3, 2018 Series D $30M Illusive Networks

Cisco - Products

Security

ASA 5506-X NGFW, the industry’s first Threat-focused Next-gen Firewall. It combines the proven network firewall with the industry’s most effective next-gen IPS, URL filtering, and advanced malware protection. This NGFW has earned the highest security effectiveness scores in third-party testing for both NGIPS and AMP, blocking 99.4% and 99.2% of threats, respectively. Top-rated Item: ASA5506-K9.

Collaboration

With cost-effective Cisco 7800 IP Phones, increase your business call efficiency and productivity while reducing IT operating costs. Deploy the IP Phone 7800 Series whether your platform is on premises, Cisco Webex Calling, or from third-party Cisco approved Unified Communications as a Service (UCaaS) providers. Top-rated Cisco IP Phone 7800 Models: CP-7821-K9, CP-7841-K9

Catalyst Switching

Small business network solutions from Cisco 2960-X switches deliver the manageability and flexibility your business needs to grow across one office or many. 2960-X Series are stackable Gigabit Ethernet Layer 2 and Layer 3 access switches. They’re easy to deploy, manage, and troubleshoot. They offer automated software installation and port configuration. And they help you cut costs with energy-efficient features. Top-rated Models: WS-C2960X-24TS-L, WS-C2960X-48TS-L, WS-C2960X-24PS-L, WS-C2960X-48FPS-L, WS-C2960X-48LPS-L.

Routing

The 4000 Series offers solutions for highly secure SD-WAN connectivity, application experience, unified communications, network automation, virtualization, and branch and direct Internet access security–all in one platform. Top-rated Cisco ISR 4000 Models: ISR4221/K9, ISR4321/K9, ISR4331/K9.

Cisco Umbrella

Cisco Umbrella provides safe access to the internet users who don't use corporate networks or VPN to connect to remote data centers.

Cisco Umbrella offers flexible, cloud-delivered security when and how you need it. It combines multiple security functions into one solution, so you can extend protection to devices, remote users, and distributed locations anywhere. Umbrella is the easiest way to effectively protect your users everywhere in minutes.

Cisco - Webex

Cisco Webex is the solution for video conferencing, online meetings, screen share, and webinars.

With one button to push, audio and video are clear and screen sharing is as easy as it gets. Cisco Webex and Cisco Spark(Cisco Spark is an app-centric cloud-based service that provides a complete collaboration suite for teams to create, meet, message, call, whiteboard, and share, regardless of whether they're together or apart) came together to create a whole new set of collaboration tools and improve the way people work. At the 2018 Collaboration Summit, Cisco leaders unveiled a slew of new features and products, which will make connecting with co-workers, clients, and customers easier than ever.

Cisco AnyConnect Secure Mobility Client empowers remote workers with friction-less, highly secure access to the enterprise network from any device, at any time.

Features and Benefits- The industry-leading AnyConnect Secure Mobility Client is a modular endpoint software product. It not only provides VPN access through Secure Sockets Layer (SSL) and IPsec IKEv2 but also offers enhanced security through various built-in modules. These modules provide services such as compliance through the VPN with ASA or through wired, wireless, and VPN with Cisco Identity Services Engine (ISE), web security along side Cisco Cloud Web Security, network visibility into endpoint flows within Stealthwatch, or off-network roaming protection with Cisco Umbrella. AnyConnect clients are available across a broad set of platforms, including Windows, macOS, Linux, iOS, Android, Windows Phone/Mobile, BlackBerry, and ChromeOS.

Cisco Networking Academy

Cisco Networking Academy is a global platform used to inspire students and instructors to make their future brighter. Cisco Networking Academy puts theory and hands-on-experience into practice.

In 1997, Cisco donated some networking equipment to a local school. But no one was trained on it, so the gear sat unused. Technology is truly powerful when combined with education. Cisco Networking Academy was born that day, when they trained the staff to build their network. Cisco Networking Academy quickly grew from a single school to become an ever-expanding community of students, educators, employers, NGOs, Cisco employees, and customers. Now taught in 180 countries, Cisco Networking Academy help shape communities and economies around the globe. Impacting the lives of 12.7 million students, they have created a pipeline of technical talent ready to innovate and shape the future.

Cisco Networking Academy is in partnership with 28,400 educators at 11,800 academies. Cisco Networking Academy has made in-kind contributions worth billions in tools, resources, and support to students, schools and instructors. By empowering individuals and organizations with problem-solving skills and transformative technologies, they have planned to bring the benefits of digitization to one billion people by 2025.


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Cisco - Competitors

The circumstances in the early 2000s made a perfect opportunity for competitors of Cisco to jump in. The biggest competitor Juniper Networks were very determined to pass the IP and MPL package. They released their first part a couple of years ago in 1999 but this is when they grew. They were chip away from Cisco’s market share and grew to hold 30%. Cisco retaliated very quickly by developing faster processing cards and GSR routers. They also developed A6 which are simply application-specific integrated circuits. They were especially popular with Bitcoin and theory mining and in 2004, they started migration into a new high-level platform called CSR-1. They also got a new software architecture called iOS-XR. All of these changes allowed Cisco to bounce back from the dot-com bubble and they started to grow once again.

Cisco - Mistakes and Downfall

In 2006, Cisco made a mistake of trying to become a household company. They started with this by changing their name from Cisco Systems to Cisco. They also put a lot of money and effort into promoting links of these products and their future consumer prices as well. At the same time, they were also trying to focus on their traditional business as well. While all of this was going on, they were also trying to expand internationally growing into new markets. For example- they tried to build a presence in India by establishing a global center of the ease in Bangalore for 1 billion dollars.

On top of all of this, they were trying to acquire their way to new markets as well. But here's the thing, there's only so many things that one can do at the same time and be successful at all of them. And Cisco trying to do all of these at the same time was a recipe for disaster. Despite all of these efforts, their competitors were gaining ground very quickly.

They had domestic competitions from companies like Juniper Networks and they also had international competition from Huawei which have recently been very popular in the news. All of these led to very disappointing profits for Cisco and in 2011, they decided to cut their spending by 1 billion dollars per year. And how exactly did they accomplish this? Well, mainly by cutting employees. They cut off 3000 straight off the bat and thousands more were offered early retirement packages and things of that sort. When everything was said and done 10,000 jobs were eliminated, eliminating14% of their workforce. Cisco was clearly in a very bad place.

In 2013, Cisco sold links east to Belkin international and this interchanged from consumer side back onto network side. But years of missteps continued to have devastating consequences. In 2013 and 2014, they had to cut 4000 and 6000 more jobs, respectively.

Cisco - Future plans

Cisco has been profiting from the development of the internet and the increase in traffic over the last couple of decades. And with the growth of online services such as video streaming and gaming, Cisco forecasts that global network traffic will grow by 26% annually through 2022.

"Innovation requires focused investment, the right team and a culture that values imagination," said Chuck Robbins, chairman and CEO of Cisco. "We are dedicated to transforming the industry to build a new internet for the 5G era. Our latest solutions in silicon, optics and software represent the continued innovation we're driving that helps our customers stay ahead of the curve and create new, ground-breaking experiences for their customers and end users for decades to come."

Cisco is planning to bring its 75,000 employees back into the office after the pandemic subsides - while still keeping remote work as an option. After switching its over 75,000-person global workforce to remote, the tech giant is taking steps to continue to make it possible for employees to continue to do their jobs at home, like making networks stronger to allow more remote access to internal databases. "How do we make our networks, our connectivity more robust, more resilient. How do we scale up much more effectively," Irving Tan, Cisco chief operating officer, told Business Insider. "There's a lot of learning and it's still somewhat early days.
By empowering individuals and organizations through Cisco Networking Academy, with problem-solving skills and transformative technologies, they have planned to bring the benefits of digitization to one billion people by 2025.

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