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9 billion Q1 FY'13 Employee Count: 72,360 At Cisco (NASDAQ: CSCO) customers come first and an integral part of our DNA is creating long-lasting customer partnerships and working with them to identify their needs and provide solutions that support their success. The concept of solutions being driven to address specific customer challenges has been with Cisco since its inception. Husband and wife Len Bosack and Sandy Lerner, both working for Stanford University, wanted to email each other from their respective offices located in different buildings but were unable to due to technological shortcomings. A technology had to be invented to deal with disparate local area protocols; and as a result of solving their challenge - the multi-protocol router was born. Since then Cisco has shaped the future of the Internet by creating unprecedented value and opportunity for our customers, employees, investors and ecosystem partners and has become the worldwide leader in networking - transforming how people connect, communicate and collaborate.
Vision : “Change the way the world works, lives, plays, and learns” Strategy : Solve our customers’ most important business challenges by delivering intelligent networks and technology architectures built on integrated products, services, and software platforms Q1 FY13 Revenue by Geography : Diverse and Global : 165+ Countries / 470+ Offices Nearly 70,000 / Employee Region :
Americas : Canada LATAM, USA APAC / GC / J : Australia,
Bangladesh Cambodia India Indonesia Korea Laos Malaysia New Zealand Philippines Singapore Greater China / Japan EMEA : Central Europe Emerging North Europe South Europe UK & Ireland Sri Lanka Thailand Vietnam
Breadth and Depth of Technology Portfolio
With 34,000 employees, Cisco Systems was the world's largest manufacturer of routers and switches in the early 2000s. Both form an integral part of the networking technology used to connect users to the Internet. Roughly 80 percent of the firm's revenues stem from transactions completed on Cisco's Web site, which is considered to be one of the most successful business-to-business sites in the world. Although sales in 2001 grew 17.8 percent to $22.2 billion, Cisco posted a loss of more than $1 billion. Management blamed this on a steep drop in orders—fueled by cuts in spending, particularly in the telecommunications sector—which left the firm with high levels of inventory.
Read more: Cisco Systems Inc - Early History, Growth Via Acquisition, Conducting Business Via The Internet - World, Billion, Percent, and Firm http://ecommerce.hostip.info/pages/216/Cisco-Systems-Inc.html#ixzz2KSzauD96
Cisco Systems Inc - Early History
Two Stanford University computer scientists—Leonard Bosack and Sandra Lerner— established Cisco Systems in December of 1984. The new company began marketing the internetworking technology Bosack had developed while at Stanford to universities, research centers, and government agencies. The following year, Stanford asked Cisco for $11 million in licensing fees, arguing that Stanford held rights to Bosack's technology since it had been developed at the University. Stanford accepted a settlement of $150,000 and free products and support services in 1986. That year, Cisco became one of the first networking technology firms to develop a router, a device linking a number of local area networks (LANs), compatible with Transmission Control Protocol/Internet Protocol (TCP/IP). Sales reached $1.5 million in 1987, and Cisco began marketing its networking products to businesses with offices in a wide range of locations. To fund future growth, Cisco conducted its initial public offering (IPO) in 1990. Sales that year grew to $70 million and more than doubled in 1991 to $183 million. Pacific Bell began purchasing the bulk of its routers from Cisco in 1992. New product developments that year included integrated services digital routers, as well as upgrades to fiber distributed data interface (FDDI) and token ring technologies. International expansion was launched via an original equipment manufacturer (OEM) agreement with British Telecom, and Cisco also started to market its routers to U.S. long-distance providers. After revenues surged to $340 million, Forbes ranked Cisco number two on its list of the fastest growing companies in the United States. When the development of asynchronous transfer mode (ATM) technologies threatened to render router technology obsolete in 1993, Cisco developed routers that could assist ATM transmissions. International expansion continued with the establishment of Cisco
Cisco retained Crescendo head Mario Mazzola and all of his employees.hostip. In fact. creator of copper distributed data interface technology. and Routers http://ecommerce. dubbed CiscoFusion. Japan. and expressed their support of internal research and development rather than continued purchases.info/pages/213/Cisco-Systems-Inc-EARLYHISTORY.html#ixzz2KSzqAI9W Cisco Systems Inc . Cisco started looking for a startup to purchase any time management determined that a rival had gotten a considerable jump start in an area the firm wanted to pursue. the firm beat out IBM Corp. Setting the stage for how future acquisitions would be integrated into existing operations. Stanford. She eventually headed up a team of 11 employees dedicated to making the integration process for Cisco's many acquisitions as smooth as possible. the firm released its newest networking technology.Million. which eventually included an ATM interface processor and Catalyst FDDI-to-Ethernet LAN switching technologies. and Australia. Eventually. paying $100 million for Crescendo Communications.Early History . AT&T Corp. it was these aggressive acquisition tactics that were later credited for Cisco's astronomical growth well into the late 1990s.Systems HK Ltd. In essence. When Kalpana executive Mimi Gigoux criticized Cisco's integration efforts. Cisco held a 57-percent share of the worldwide multiple protocol networking market. Eventually. By then. the firm appointed her an integration specialist. Crescendo served as the foundation for a unit of Cisco that brought in roughly one-third of total revenues. Kalpana's team was responsible for reducing the turnover rate of employees gained via takeovers to roughly two percent. Cisco continued to seek growth via acquisitions. Read more: Cisco Systems Inc . compared to an average rate throughout the networking industry of 20 percent. . and Strata-Com agreed to work with Cisco to foster compatibility among rival protocols. In October.Early History Cisco launched an acquisition spree in 1993. Technology. and its routers had started being used to power the Internet. rather than spending money on research and development to create its own products. Although shareholders protested a proposed $348 million takeover of Ethernet switch maker Grand Junction Networks Inc. Success with this purchase prompted Cisco to continue paying for companies with products and services in high growth areas. Sales exceeded $1 billion for the first time. Cisco paid $91 million for LAN technology developer Newport Systems Solutions in 1994. in Hong Kong and new units in Europe. It completed the takeover of Grand Junction networks the following year. Also in 1994. with a $204 million bid for Ethernet switch maker Kalpana Inc..
Firm. Acquisitions that year included American Internet Corp. Cisco's routers were considered an integral part of the Internet. the firm sold nearly $1 billion worth of networking equipment via its Web site..6 billion in annual revenues. which had set the previous record.Million. By 1998.info/pages/215/Cisco-Systems-IncCONDUCTING-BUSINESS-VIA-INTERNET..U. It explained: "The site provides online documentation. Cisco delivers the tools to cut the time required for negotiating contracts. which grew 44 percent from the previous year (earnings jumped 55 percent over the same time period). Read more: Cisco Systems Inc . and $220 million for Granite Systems.Conducting Business Via The Internet . one of the earliest business-to-business sites to prove successful.. in 1996. the anticipated threat of emerging low-cost routers prompted the firm to continue its efforts to grow via acquisition. Percent. Cisco paid roughly $4 billion for Stratacom Inc. took 11 years to reach the $100 billion mark.hostip. Technology.Conducting Business Via The Internet Read more: Cisco Systems Inc . Robotics and Cisco inked a technology sharing alliance in 1995. By the following year. a manufacturer of gigabit Ethernet technologies. and Global Internet Software Group elevated Cisco to the number one spot among worldwide networking equipment makers. Cisco attained a market capitalization of $100 billion.. Internet sales accounted for more than 40 percent of Cisco's $3. calculating lead times. $79 million for NetSys Technology Inc. Although Cisco's Internet-related activities thrived. According to a March 1998 article in InternetWeek. a maker of token-ring network hubs.. with an 80-percent share of the Internet router market. a converter of traditional phone lines into digital subscriber . determining pricing. Cisco ended up owning plants manufacturing three rival Ethernet switching systems. Clarity Wireless Corp. a networking technology vendor. That year.S.info/pages/214/Cisco-Systems-Inc-GROWTHVIA-ACQUISITION. Firm. Microsoft Corp. setting a record for reaching that milestone less than nine years after completing an IPO. checking on status and verifying shipment dates.Billion. the firm established its Internet Business Solutions Group after clients began asking Cisco for helping with setting up their own Internet-based business ventures.. Making its largest purchase to date. The firm also paid $100 million for Nashoba Networks.html#ixzz2KT0F7PwS The 1997 purchases of Ardent Communications Corp. and NetSpeed Inc. Cisco's Web site went well beyond simply allowing clients to place orders and make payments. order updates.Growth Via Acquisition . Also in 1998. As a result. design tools and help-desk support.html#ixzz2KT02UuFL Cisco Systems Inc .hostip. and Ethernet http://ecommerce. and Market http://ecommerce." In December. Pipelinks Inc.
In August of 1999. and Cabletron. gaining access to the high-speed optical internetworking technology Monterey used to process traffic at a network hub.000   .000.Billion. In December. Read more: Cisco Systems Inc .lines (DSL). 1995 September Combinet Internet Junction LAN switching $204. LightStream 1994 August 10. Qwest Communications International Inc. With a 50-percent share of the $21 billion networking devices industry. Bay Networks. Cisco bought Monterey Networks Inc.000. the firm decided to diversify into the $250 billion telephone equipment industry and compete with the likes of Lucent Technologies Inc. 1993 July 12. Percent.000  October 24.info/pages/215/Cisco-Systems-IncCONDUCTING-BUSINESS-VIA-INTERNET. and Nortel Networks.html#ixzz2KT1MJj00 Acquisition date September 24.500.000  Routers $95. Looking for new growth areas. Firm. Kalpana 1994 December 8.hostip.200. a manufacturer of fiber-optic network equipment serving metropolitan areas. Cisco hoped to use Pirelli's dense wave division multiplexing (DWDM) technology to transmit data between network hubs and end users in metropolitan areas.000. Three months later. Cisco superceded its $4 billion Stratacom purchase with the $7 billion acquisition of Cerent Corp.. Cisco boasted sales and earnings far above those of competitors 3Com Corp. for $500 million in stock.Conducting Business Via The Internet . Cisco paid $2 billion for the optical systems unit of Italy's Pirelli SpA.. In doing so.000  LAN switching $120. The first step in this strategy called for the acquisition of three fiber-optics developers. joined forces with Cisco in 1999 to create one of the largest Internet-based networks in the United States. roughly 80 percent of Quest's transmissions began using Cisco lines.500.000  Remote desktop software Gateway $114.000 $5. 1994 Company Crescendo Communications Newport Systems Solutions Business Country United States United States United States United States United States United Value (USD) References LAN switching $94. and Market http://ecommerce.
Grand Junction 1995 Networks January 23.000 States United States United States United States United States United States United States Canada United States United States United States $200.000.000.000  StrataCom ATM switching United $4. 1997 Skystone Systems June 24.000  October 14. 1997 September 2.000. 1995 October 27.000  —  Internet software company $115.000. 1996 September 3.000.000. 1997 Global Internet Software Group Ardent Communications $89.000  $40.100.000  Broadband Internet access $156.000  July 22.6.000  Granite Systems Computer networking $220.000  —  Telesend Broadband Internet access Synchronous optical networking Firewall —  June 9.000. 1997 Metaplex Computer networking $79. Netsys Technologies Network simulation 1996 December 1996 March 26. 1996 April 22. 1996 Modems  Nashoba Networks LAN switching $100.000  Integrated Network Digital subscriber line —  . Network Translation Firewalls 1995 November 6. 1997 June 24.250. 1996 Telebit August 6.000. 1996 TGV Software LAN switching States United States United States United States $30.000.
000  $126. 1998 September 15.000 States United States United $170.000.000  October 14.000.000.000  April 8. 1999 April 28.000. 1998 CLASS Data Systems Computer networking $50.000  February 18. Selsius Systems 1998 December 2. 1999 June 17.000  United $2.000  Broadband Internet access $236. 1999 Sentient Networks April 13.000  American Internet Computer networking $56.000.000  July 28.December 22.000. 1998 March 11.000.000.000. 1999 Fibex Systems $145. WheelGroup 1998 March 10. 1998 Summa Four August 21. 1998 LAN switching $116.000. 1998 NetSpeed $124.000.000 $407.000.000  May 4.000. 1997 LightSpeed International Voice over Internet Protocol Computer security United States United States United States United States United States United States United States United States United States United States United States United States $160.000. GeoTel Communications Amteva Technologies TransMedia $195.000  Precept Software Internet television $84.000  Clarity Wireless Wireless networking Voice over Internet Protocol Synchronous optical networking Digital loop carrier Voice over Internet Protocol Voice over Internet Protocol Voice over Internet Protocol Gateways $157.000    .000.000.000  $250. Pipelinks 1998 April 8.
000  October 26.000.000  $25.000.1999 June 29.000.000.000 States United $2.000.000. 1999 September 15.000.000  $2. 1999 December 17.000. 1999 August 31.000 States $65.000  $55.000  Cerent IBM Networking Hardware Division COCOM A/S Webline Communications United $6.000. 1999 V-Bits Worldwide Data Systems Web cache $25.000.150. 1999 September 22. 1999 Communications StratumOne Communications Calista MaxComm Technologies Monterey Networks Synchronous optical networking Private branch exchange Voice over Internet Protocol Synchronous optical networking Synchronous optical networking Computer networking States United States United States United States United States $435.000  Internet Engineering Synchronous optical Group networking Pirelli Optical Systems Fiber-optic communication $25.000  $500.900.000  $143. 1999 August 18. 1999 August 26.500. 1999 December 16. 1999 August 26. 1999 December 20. Tasmania Network 1999 Systems November 9. 1999 August 16.000   Cable modems  Denmark United States United States United States United States United States United States Italy Contact management $325.000.000  .000  Digital video Information technology consulting $128.000.600. Aironet Wireless 1999 Communications November 11.000.000  Wireless LAN $799.
000.000.000.000.January 19. 2000 March 29.000   Sweden Israel United States United States United States June 5. 2000 April 11.000  Network management Scotland United States United States United States Israel $180. 2000 May 12. 2000 HyNEX July 7.000  SightPath Content delivery $800.000.000  infoGear Technology Information management $301.700.000.000  LAN switching Wavelength-division multiplexing Internet access LAN switching United $5.000 $210. 2000 Komodo Technology $175.000. 2000 Atlantech Technologies JetCell Chipsets $355.000  Mobile telephones $200.000. 2000 March 16.000  . 2000 April 12.000.000.000.000  Computer networking Israel $19.000  July 25.000.000 States $800.000.000. 2000 Netiverse   2001 AuroraNetics Computer networking Voice over Internet Protocol $150.000  PentaCom Seagull Semiconductor Arrowpoint Communications Qeyton Systems LAN switching $118. 2000 March 16.000  February 16.000  Altiga Networks Virtual private networking $250.000 $127.000. Growth Networks 2000 March 1. 2000 Compatible Systems Virtual private networking United States United States United States $317. 2000 May 5. 2000 January 19.
000  July 27. 2000 November 13.000.000  Andiamo Systems Data storage Intrusion detection United $2.000. 2000 August 1.000  July 25. Psionic Software  .000. 2001 Allegro Systems Hammerhead Networks Virtual private networks $181.000.000.000  Radiata ExiO Communications Wireless networking $295.000  Mobile software Media player (application software) Voice over Internet Protocol Voice over Internet Protocol Integrated development environment Communication software $425. 2002 AYR Networks August 20.000.000  October 20. 2002 Navarro Networks Computer networking $85. 2000 September 28. 2000 September 28. CAIS Software 2000 November 10. 2000 August 31.000. 2000 NuSpeed Internet Systems IPmobile iSCSI United States United States United States United States United States United States United States United States United States United States United States United States United States $450.000.000.000 States United $12.000  May 1.000.000.July 27.000. 2000 December 14.000  Wireless networking $155.500.000  October 22.000  IPCell Technologies $200. 2002 Computer networking $113.000  PixStream $369.000.000  Vovida Networks $169.000.000. 2000 Active Voice $170.000  May 1. 2002 Computer networking $173.000  $266.
2004 Jahi Networks Computer networking $74.000.000  Computer security $5.500.000.000. 2004 Okena Intrusion detection States United States United States United States United States United States United States United States United States United Kingdom Israel United States United States United States United States $154. 2004 June 17. 2004 September 13.000  Web conferencing $80.000. 2004 June 29. 2004 March 22.000  P-Cube Service Delivery Platform $200.000  Riverhead Networks Computer security $39.000.000  July 8.000  Actona Technologies Data storage $82.000  Procket Networks Routers $89.000  October 21.000.000. 2003 March 20.000  .000.2002 January 24. 2003 November 12.000  NetSolve Information technology $128. 2003 March 19.000.000  Network management $16. 2004 Routers $9. Perfigo 2004 November 17.000.000.000  Linksys Latitude Communications Twingo Systems Computer networking $500.500. 2004 Parc Technologies August 23.000.000  SignalWorks Echo cancellation $13.000  dynamicsoft Communication software $55. 2003 March 12. 2004 September 9.
2005 May 26.900.000.000  Computer networking $30.000  Scientific-Atlanta Digital cable United $6. 2005 Sheer Networks September 30. Service management $97.000  Network security $70. Secure Corporation Netsift $30.000  $68. 2005 November 18. 2005 November 29.000  Virtual private networks $13.000. BCN Systems 2004 December 20.000.000 $51.000.000  Nemo Systems Computer networking $12. 2005 June 14.000  Network security $65.000 States United States United $14.000.000  Vihana FineGround Networks M.000.000  LAN switching Voice over Internet Protocol Semiconductors $250.000.000.000.000.December 9. 2004 January 12. 2005 KISS Technology Entertainment technology Denmark United States United States $61.500.000.000  July 22. 2005 May 23. 2005 March 7.000. 2005 April 26.000.000.000  Cybertrust SyPixx Networks Information gathering Surveillance   . 2005 Protego Networks Routers United States United States United States United States United States United States United States United States United States $34.000  Airespace Topspin Communications Sipura Technology Wireless LAN $450. 2005 June 27.000  July 26.I. 2005 April 14.
000  July 6.000.000. 2006 January 4.000  Social networking service —  Data storage —  WebEx Web conferencing United $3.000  Video on demand $92.000. 2006 Metreos Voice over Internet Protocol Voice over Internet Protocol Computer security States United States United States United States United States United States United States United States United States United States United States United States United States United States $28.2006 June 8. 2007 Gateways —  Mobile software $31.000. 2006 December 15. 2007 March 15.000.000. 2007 Utah Street Networks NeoPath Web services $135.000  October 10. Ashley Laurent 2006 October 25.800. 2007 February 9. 2006 Arroyo Video Solutions $43.200.700.000  Five Across Social networking service —  February 21. Orative 2006 November 13. 2007 March 13. 2006 Audium $19.000  June 8.000 States  . 2006 Meetinghouse August 21. Reactivity 2007 March 5.000  Greenfield Networks Semiconductors —  Tivella Digital signage / IPTV —  IronPort Computer security $830.
2008 Nuova Systems. 2008 January 27. Inc. Securent 2007 $330.000  Digital rights management $100.000. 2007 May 21.000. 2007 September 18.000  April 8. ScanSafe $105.000.000  DiviTech A/S Digital service management Denmark United States United States United States United States United States United States United —  July 23.000. 2008 $678. 2009 $120. Inc.000. 2009 March 19.000.000. Presence —  Richards-Zeta Building management Building Intelligence systems Pure Digital Technologies Digital video Intelligent Application Management SaaS Web Security Provider —  $590.000  Jabber.000.000 $183. 2008 September 19.March 28. Navini Networks 2007 November 1.000   . Inc.000  May 1.000  PostPath Email $215. Computer software August 27. 2007 SpansLogic BroadWare Technologies Cognio Computer networking United States United States United States United States United States United States United States —  Surveillance —  Mobile software Business performance management WiMAX —  Latigent —  October 23. 2007 September 27. 2008 Pure Networks. 2009 Tidal Software October 27. Computer networking June 10.
2011 Inlet Technologies $95. 2010 September 2.000.000  Tandberg  Norway United States United States United States United States United States MOTO Development Product design Group CoreOptics Digital signal processing —  —  ExtendMedia Arch Rock Corporation Video —  Smart Grid Network Management Software —  December 1.2009 November 2. 2011 —  Pari Networks Network Configuration and United Change Management States (NCCM) Adaptive Bit Rate (ABR) digital media processing platforms [Cisco Intelligent Automation for Cloud] IT Service Management Software Integrated Software United States United States Finland United States —  February 4. 2009 April 18. AXIOSS Software and Talent Versly —  $31.900. 2010 August 26. 2011 August 21. 2010 Starent Networks System Architecture Evolution Videoconferencing Kingdom China —  United $2.000 States $3.000.000  —  .000. Set-top box business Cable 2009 of DVN December 18. 2011 August 29. LineSider 2010 Technologies January 26. 2010 May 20.000  newScale Inc.000. 2011 March 29.300. 2010 May 18.
Dominating the market for Internet protocol-based networking equipment.com/topic/cisco-systems-acquisitions#ixzz2KT3iMAPg Acquisitions Main article: List of acquisitions by Cisco Systems Cisco acquired a variety of companies to spin products and talent into the company. 2012 that it is acquiring NDS Group for a $5B.000.000 Kingdom Israel $475. It was the most expensive acquisition made by Cisco to date. Although many buy-ins (such as Crescendo Networks in 1993. Enterprise Voice over Internet Protocol (VOIP) platform Webex. including LAN switching. set-top boxes. a start-up company located in Petaluma. and only the acquisition of Scientific Atlanta has been larger.  Also in 2010. revenues were still not on par with US$7 billion price tag paid in 1999 for Cerent. The latter came as result of Cisco acquiring Linksys in 2003 and in 2010 was supplemented with new product line dubbed Cisco Valet. Cisco announced on March 15. voice. During the Internet boom in 1999. Other products include remote access servers. and home networking.answers. In the recent merger deals. Several acquisitions. a product design consulting firm that helped develop Cisco's Flip video camera. and video traffic. Internet conferencing systems. but it also markets products designed for small businesses.000  Conditional Access United $5. IP telephony equipment. for about US$7 billion. optical networking components. In 1995–1996 the company completed 11 acquisitions. For instance. Some of acquired technologies (such as Flip from Pure Digital) saw their product lines terminated. Cisco bought Starent Networks (a mobile technology company) and Moto Development Group. the company acquired Cerent Corporation. In March 2011. and network service and security systems. 2012 January 23. were the biggest deals in the industry when they occurred.000. This transaction was expected to complete in 4–6 months.October 20. Several acquired companies have grown into $1Bn+ business units for Cisco. BNI Video 2011 March 15. Tandberg in 2010) resulted in acquisition of flagship technology to Cisco. Cisco gets nearly 60% of its sales from the Americas. . Cisco Systems routes packets and routs competitors with equal efficiency. 2013 January 29. such as Stratacom. in 2010 Cisco occupied a meaningful share of the packet-optical market. Cisco completed the acquisition of privately held network configuration and change management solutions company Pari Networks.000.000  Intucell Mobile Software  Cognitive Security Cyber Threat Protection Czech  Read more: http://www. many others have failed – partially or completely. The company sells its products primarily to large enterprises and telecommunications service providers. 2013 NDS Group Video United States $99.000. California. the company provides routers and switches used to direct data. Cisco became a key stakeholder in e-Skills Week.
and Lerner oversaw the computers at the graduate school of business. and educational institutions. They then decided to start their own business.041.9% Officers: Chairman and CEO: John T. all of which link together geographically dispersed local area networks (LANs). and providers of wireless communications.com/topic/cisco#ixzz2KT654RpG Key numbers for fiscal year ending July. and the Internet itself. Cisco serves three main market segments: large organizations.Read more: http://www. connecting to the Internet. and connecting with business partners. by a husband and wife team from Stanford University. California. Leonard Bosack and Sandra Lerner.000 and free routers and support services. wide area networks (WANs). switches. but none were interested. 500 yards across campus. The company's product line includes routers. while driving across the Golden Gate Bridge). deriving roughly 44 percent of its sales from overseas business. Cisco Systems. Chambers President and COO: Gary B.0M One year growth: 6. remote access devices. . service providers. and small and medium-sized businesses whose needs include operating networks.com/topic/cisco#ixzz2KT69N49V Competitors: Alcatel-Lucent Hewlett-Packard Juniper Networks Cisco Systems. and networking and network management software. Bosack devised a way to connect the two local area networks in the respective departments where he and his wife worked. Increasingly. Moore EVP and CFO: Frank Calderoni Read more: http://www. government entities.answers. Inc. At Stanford. Cisco's products are appearing in the consumer marketplace.answers. Bosack and Lerner were joined by colleagues Greg Setz. systems. because Bosack had developed the technology while an employee at the university. Lerner and Bosack initially tried to sell the internetworking technology that Bosack had developed to existing computer companies. but eventually the university settled for $150. Internet services devices. and Kirk Lougheed. Beginnings in Multiprotocol Routers Cisco Systems was founded in December 1984 in Menlo Park. 2012: Sales: $46. Bosack was the manager of the computer science department's laboratory.0M Income growth: 23. protocol translators. based on this technology (they came up with the name. as cofounders. Stanford University later tried to obtain $11 million in licensing fees from the new company. Bill Westfield. utilities. and services. a shortened form of San Francisco.061. including corporations. Cisco operates globally. including Internet service providers.6% Net income: $8. is a leading supplier of communications and computer networking products. telephone and cable companies.
2 million to $84. companies of all sizes were installing local area networks (LANs) of personal computers. Valentine thus became chairperson and then hired an outsider. Cisco's reasonably priced. a hardware device incorporating software that automatically selects the most effective route for data to flow between networks. required that the owners surrender to him a controlling stake in the company. and defer salaries to their friends who worked for them in order to get the venture off the ground.B. At first. for a total divestiture of about $200 million. and net income grew from $43. Cisco went public. Bosack and Lerner had to mortgage their house. Cisco developed routers serving an even greater array of communications protocols and subsequently distinguished its routers by enabling them to support more protocols than those of any other router manufacturer. When they left the company.6 million in 1992. and prior to that had spent six years as vice-president of sales and marketing at Stratus Computer. As such.8 million. a router for the TCP/IP (Transmission Control Protocol/Internet Protocol) protocol suite. In fact. and the company had only eight employees at the time. Sales for the fiscal year ending July 1990 were $69. and could therefore link together different kinds of networks. the company's greatest challenge became meeting customer support service needs.The company was established on a very tight budget. when the commercial market for internetworking began to develop. UNIX workstations. Cisco's primary product from the beginning was the internetworking router. the potential market for linking these networks. the company began to target its internetworking routers at mainstream corporations with geographically dispersed branches that used different networks. Bosack and Lerner sold the remainder of their stock for $100 million. In February 1990. In 1992.5 million. A year later. with more qualified and experienced executives. either with each other or with existing minicomputers and mainframe computers. Valentine. Cisco's routers pioneered support for multiple protocols or data transmission standards. Sales for the fiscal year ending July 1987 were $1. she was fired. also grew. Lerner maintained an outside salaried job to supplement the couple's income. The large size of the network systems for which Cisco supplied products made the user support task especially complex. and IBM mainframes. Cisco's corporate clients were the scientific departments of companies which already maintained large internal networks. Although Cisco had a high rate of sales growth. Morgridge replaced several Cisco managers. after which Bosack and Lerner began selling their shares. those having different architectures and those built on different hardware. To that end. and. By the late 1980s. regional.9 million. John Morgridge. such as IBMcompatible personal computers. who were friends of Bosack and Lerner. net income was $13. Later.000 worth of routers per month. whereupon Bosack also quit. These customers tended to use the TCP/IP protocols and UNIX-based computers. Cisco thus became the first company to provide a commercial multi-protocol router when it shipped its first product in 1986.2 million in 1991 to $339. the aerospace industry. Morgridge. Cisco's sales jumped from $183. In 1988. who had an M. Lerner reportedly did not get along well with Morgridge and. was chief operating officer at laptop computer manufacturer GRiD Systems Corp. even after two years of business. the precursor to what would become the Internet. Bosack had been given the title of chief scientist and Lerner was made head of customer service. However. and the company had 254 employees. Apple Macintosh computers. for support. Donald T.A. as the company's new president and chief executive officer. The couple subsequently gave away the majority of their profits to their favorite charities. from Stanford University. Early 1990s: Rapid Growth As Networks Proliferate Meanwhile. and government facilities by contacting computer scientists and engineers via ARPANET. In the early 1990s. The company grew at a tremendous rate as its market rapidly expanded. the young company was still short of cash. Valentine of Sequoia Capital. however. in 1988 Bosack and Lerner were forced to turn to a venture capitalist. high-performance routers gave it a head start over the emerging competition. Cisco initially marketed its routers to universities. Cisco was selling $250. Cisco was able to market its products to all kinds of major corporations to help them link the computer systems of their headquarters. As Cisco's client base grew.4 million during the same period. research centers. run up credit card debts. in August 1990. Morgridge built up a direct sales force to market the products to corporate clients. Fortune magazine rated Cisco as the second fastest growing company in . Under Morgridge. and branch offices.
the United States. Cisco also began to market its technology. In 1992. The Cisco 2000 was aimed at companies desiring to link their smaller. International sales steadily increased. and a European Technical Assistance Center was established in Brussels. the first network with over 1. 39 percent in 1993. Cisco's existing high-end router. telephone carriers enabled these companies to provide more kinds of data communications products and services. Similarly. In February 1993. Cisco entered into a joint marketing agreement with MCI International to integrate Cisco's routers into end-to-end data networks over telephone lines.6 percent of sales in 1991. and 41. Other European telecommunications companies that entered into OEM relationships with Cisco included Alcatel of France and Siemens A. Cisco then proceeded to work with IBM on further defining the APPN standard and bought a license to use APPN technology. more aggressively to long-distance telephone companies. International sales became an important part of Cisco's business. Also during this time. To reach out to less technical clients. Subsidiaries were established in Japan and Australia. In September 1992. and U.G. multivendor protocol than originally intended. the company also introduced the first Integrated Services Digital Network (ISDN) router for the Japanese market. of Germany. video. Cisco had decided not to develop a rival protocol. the Cisco 7000 router. Around the same time. British Telecom became an original equipment manufacturer (OEM) client of all of Cisco's products. lower-priced product line. Cisco's products had not addressed IBM's System Network Architecture (SNA). Cisco adapted and added the capabilities of handling new protocols to its products. Cisco also became one of the four founding members of the ATM Forum to help define the emerging standard. Cisco announced a strategy to include ATM among the protocols supported by its products. ATM is a cell-switching technique that can provide high-speed communications of data. accounting for 35. While new communications technologies became widespread. especially its software. In its role as the leading internetworking router provider. Cisco also signed marketing agreements in 1993 with Pacific Bell. In March 1993. Cisco established a partnership with Novell to integrate Cisco's routers with Novell's . In early 1993. a proprietary network structure used by IBM computers. Cisco introduced Fiber Distributed Data Interface (FDDI) and Token-Ring enhancements to its high-end router. Most of Cisco's international sales were through distributors. which featured a 50 percent improvement in performance over the AGS+. For example. however. and images without the use of routers. Cisco could redefine and expand the market as it grew. Belgium. Cisco entered into a joint development project with AT&T and StrataCom to develop standards that would ensure that ATM operated within existing Frame Relay networks. Olivetti of Italy agreed to market Cisco's products under a value-added reseller agreement late in 1992. In the fall of 1992. but unwilling to pay a premium price. Cisco similarly began contracting with major European telecommunications companies at about the same time. Until 1992. after IBM announced plans to license its Advanced Peer-to-Peer Networking (APPN) protocol used for SNA. Cisco introduced a new flagship product.S.S. Cisco responded by announcing plans for a rival Advanced Peer-to-Peer Internetworking (APPI) protocol for supporting SNA. By August 1993. as the deregulation of U. In January 1993. voice. In 1994. Cisco entered into joint agreements with Microsoft Corporation to market Cisco's first PCbased router card with Microsoft's Windows NT Advanced Server networking software through Microsoft's marketing channels. Cisco introduced its first ATM switch. remote branches or even remote individual employees. whereas in the United States the majority of sales (65 percent in early 1994) were made directly to the end users. West Information Systems Inc. Cisco introduced a new low-end. Cisco Systems (HK) Ltd. In June of that year. became a new subsidiary in Hong Kong. The emergence of asynchronous transfer mode (ATM) technology as a new standard method for multiprotocol data communications posed a challenge to Cisco and the router industry. whereby Cisco became a preferred router supplier for the company's network systems. because IBM made it clear that APPN would be a more open. Cisco made other strategic alliances to position itself better in the maturing internetworking market. Cisco entered new distribution agreements with Bell Atlantic Corp. the Cisco 2000 router family.000 Cisco routers was created. 36 percent in 1992.9 percent in 1994.
Astounding Growth Under John Chambers Starting in 1995 In January 1995 John T. and educational institutions) into the area of telecommunications access providers. who had previous stints at IBM and Wang Laboratories before joining Cisco in 1991. Chambers. The deal was also a key step in Cisco's attempt to move beyond its core customer area of "enterprise" customers (large corporations. Cisco made its first acquisition. in October. and video. completing 15 more deals. Crescendo's development of ATM technology was also a leading reason for the acquisition. a $4. The company's workforce had grown from 1. Inc. 1993-94: First Wave of Acquisitions In September 1993. utilities. which was involved in ATM switching and Ethernet switching and routing. Later in 1994. a 92 percent increase over the previous year. with $1. it acquired Crescendo Communications. The growing size of the company had necessitated larger office space.262 in July 1994. stepped up the company's acquisition pace to keep ahead of its rivals and to fill in gaps in its product line. and $314. maker of Fast Ethernet and Ethernet switching products.. Another emerging networking technology was that of voice-over-IP (Internet Protocol). government agencies. with Morgridge becoming chairman and Valentine vice-chairman. For $95 million. It spent $240 million for Kalpana. Chambers was named CEO of Cisco. and its switching technologies under development were later incorporated into Cisco's routers. software used in linking local area networks. and Nortel Networks Corporation. The largest of these was the April 1998 purchase of NetSpeed. StrataCom was a leading supplier of ATM and Frame Relay WAN switching equipment capable of handling voice.9 million in net income. The acquisitions of LightSpeed International. to develop remote-access products. Inc. bought for $220 million in September 1996. Early in 1994. a specialist in digital subscriber line (DSL) equipment. that of Newport Systems Solutions for $93 million in stock. Cisco announced a new networking architecture. from Menlo Park to a newly constructed office building complex in San Jose. CiscoFusion. 83 percent more than in 1993. an area in which it faced entrenched and formidable competition in the form of such giants as Alcatel. Additionally. in April 1998 and Selsius Systems. The largest deal during this period. Newport Solutions sold the LAN2LAN product line. including Grand Junction.451 in July 1993 to 2. to provide clients with a gradual transition from routers to the new switched networking technologies of ATM and LAN switching.. several new switching products were introduced in March 1994. was that of StrataCom.Netware network software so as to provide links between Netware and UNIX-based networks. in November 1998 helped Cisco gain a significant presence in the Internet telephony sector. The latter was the first new product of the Workgroup Businesses Unit since the acquisition of Crescendo. Crescendo Communications was renamed the Workgroup Business Unit. Cisco continued its blistering acquisitions pace in 1997 and 1998. as Cisco hired talent from smaller. which had pioneered products for a new technology called Copper Distributed Data Interface (CDDI). In 1994.. CiscoFusion allowed users to take advantage of both routing and switching techniques. Cisco topped $1 billion in sales. During this time. Cisco began working with LanOptics Ltd. and Granite Systems Inc. Cisco completed two more acquisitions of firms involved in the switching sector. a maker of high-speed Gigabit Ethernet switches.. which essentially enables the routing of telephone calls over the Internet. struggling networking companies which were laying off personnel. purchased for $400 million in September 1995. data. ending the year on July 31. California. aiming to provide one-stop networking shopping to its customers. including the ATM Interface Processor and the Catalyst FDDIto-Ethernet LAN switch. The company completed 11 acquisitions in 1995 and 1996. Inc. Cisco made its second acquisition.. The addition of Frame Relay switching products to the Cisco portfolio was particularly important as that technology was being rapidly adopted by telecommunications companies needing to increase the capacity of their networks. . Cisco moved its headquarters from one end of Silicon Valley to the other. As part of this architecture. Inc. however.. Inc. and $120 million for LightStream Corp. a maker of Ethernet switching products. an emerging technology providing homes and small offices with high-speed access to the Internet via existing telephone lines. 1994.24 billion in net sales. in August 1994. Lucent Technologies Inc.. Inc.67 billion acquisition completed in April 1996.
and restraint.15 billion by 1999. making Cisco's entry into this segment of vital importance. where Cisco aimed to capture what was predicted to be an area of rapid early 21st century growth: the networked home. 2003 interview with Business Week. Several fiber-optic companies were acquired. Chambers returned home and began what he referred to as "the most challenging time in my business career. with the addition of as many as 25 companies during 2000. The technology was also expected to be transferred to the home environment. maker of equipment that creates LANs without wires in small and medium-sized businesses. adhering to a more austere. but Chambers remained sanguine until he was forced to recognize the severity of the situation. nearly one-fifth of Cisco's payroll..A. and implemented sweeping changes throughout the company. Inc. Although Chambers admitted he was late in recognizing the seriousness of the situation. Transformation in Early 2000s Chambers only made it halfway toward his financial goal by 2005. Inc. making it the third most valuable company in the world. focused strategy.98 billion. in the process gaining presences in two more emerging areas: fiber-optic networking and wireless networking. By the late 1990s Cisco Systems was the undisputed king of the networking world. and Intel Corporation. including for the CEO. Cisco's share of the $92 billion communications-equipment market increased from 10 percent to 16 percent. In July 1998 the company's market capitalization surpassed the $100 billion mark. among others. which reached $906 million for the second quarter of the 2000 fiscal year alone. snatching up an additional 17 companies. a more than sixfold increase over the 1995 result of $1. In late 1999 Cisco announced that it would acquire the fiber-optic telecommunications equipment business of Italy's Pirelli S.2 billion. was slow to react to what became the most severe downturn in the history of the industry. Revenues reached $12. the return of favorable economic conditions did not signal the end of wholesale changes at . "Process was a dirty word at Cisco. order. and data. the biggest increase in the company's history. Chambers. just 12 years after its initial public offering. video. a maker of software for routing telephone calls. or video. Cisco's market value surpassed $450 billion. gaining Pirelli gear that takes a beam of light and breaks it into as many as 128 "colors. as were earnings. following 1999's frenzied bull market in high-tech stocks. with a total market capitalization of $555 billion). During a two-week trip abroad in March 2001. a time frame believed to be a record for achieving that level. The company.2 billion in the company's largest acquisition yet. During 1999 Cisco also acquired GeoTel Communications Corp.p. his actions ensured that further layoffs were not needed. which was purchased for about $7. Between 2001 and 2003." in a November 24.9 billion.. hearing from each that spending was to be drastically reduced in the coming months. behind Microsoft and General Electric Company (for a brief period in late March. including start-up Cerent Corporation. Cisco's key wireless acquisition also came in late 1999 with the announcement of the $800 million purchase of Aironet Wireless Communications. Rivals Lucent Technologies and Gateway. Through acquisitions and strategic alliances with such industry giants as Microsoft. By early 2000. Fiber-optic networks were particularly being built by telecommunications firms aiming to take advantage of their capacity for handling massive quantities of voice.." each of which can carry a separate stream of voice. Chambers planned to increase the company's acquisition pace. data. made great gains as conditions in the technology sector began to improve. Rather than slowing it down. Cisco actually ranked as the most valuable company in the world. Significantly. slashed overhead and trimmed their operations as market conditions soured. but the fact that Cisco doubled its revenue volume during the first part of the decade represented a remarkable achievement considering the prevailing conditions in the technology sector. for about $1. for about $2. Hewlett-Packard Company.500 workers. During 1999 Cisco became even more acquisitive.The areas of DSL and voice-over-IP provided additional examples of Cisco's strategy of acquiring its way into emerging networking sectors. He laid off 8. reigning in the freewheeling attitude toward expansion that had led to the acquisition of 73 companies between 1993 and 2000 and replacing it with discipline. described as irrepressibly optimistic and relentlessly upbeat by industry observers. he met with numerous customers. Revenues were soaring." Chambers conceded in his interview with Business Week. Chambers aimed to increase Cisco Systems' revenues to $50 billion by 2005.
s. Cisco Systems Limited (U. using the purchase to complete what industry insiders referred to as the "quadruple play" package. (Costa Rica).K. (Canada).. In July 2005. Topspin Communications LLC. Cisco was well equipped to provide the first three types of services.. Cisco Systems Belgium. Cisco Systems Chile. Sirketi (Turkey).A. S. .. NEC Corporation. Cisco Systems International Netherlands. Nortel Networks Corporation." Chambers explained in a November 21.V. Ltd.. Cisco Systems Romania SRL. Cisco Systems Malaysia. Compaq Computer Corporation. Cisco Systems (USA) Pte. Cisco Systems Co.R. a Lawrenceville. Intel Corporation. Limited. B.A. Cisco Systems Spain. encouraging Chambers.r. beginning with the purchase of Linksys Group. Newbridge Networks Corporation..o. Network Associates. The foray proved successful. Cisco Systems South Africa (Pty) Ltd. Inc. Cisco Systems Greece. Cisco Systems Europe. Nokia Corporation. Cisco Systems GmbH (Austria).K. S.. Cisco Systems (Switzerland) AG. manufacturer of cable television set-top boxes. (Brazil).. Cisco Systems Australia PTY. Georgia. Ltd. "Once you add video.V.. S. Inc. Cisco Systems (Italy) Srl. Lucent Technologies Inc. Cisco Systems (China) Networking Technologies Ltd...A. Chambers began steering Cisco in a new direction following the downturn in the technology sector. Alcatel. spol. Cisco Systems (Taiwan). Radiata. Cisco Systems Slovakia. to delve deeper into the consumer market. for Trade. opening a new avenue of growth for the company to exploit in the years ahead. Latitude Communications Pte. In November 2005. Cisco agreed to pay $6. Cisco Systems Peru.. The purchase of Scientific-Atlanta gave Chambers quadruple play capabilities.9 billion in revenue in 2005. but in being able to integrate them all together.. Cisco Technology. (France). which generated $1. vast market for the company. Cisco Systems Sales & Service. Novell. Cisco Systems Argentina S. Cisco Systems (HK) Limited (Hong Kong). Juniper Networks. Cisco Systems Danmark AS (Denmark).." the company stood poised to reap the benefits of Chambers bold move. Cisco Systems Croatia Ltd. MRV Communications. Nihon Cisco Systems... Cisco Systems Internetworking Iletsim Hizmetlieri Ltd. de C. Sterling Software. Kingston Technology Company. sr. 3Com Corporation.o... Ltd.. Cisco Systems. Chambers began to change tack. Inc. Sdn. Virgin Islands).L.. Ltd. Ltd. S. but it lacked the ability to provide anything substantial in the video realm. very unique. D-Link Corporation. "not just in products. Cable and telephone companies were interested in providing a bundle of services to their customers. a manufacturer of wireless routers for consumers. C. VZ. Cisco Systems Sweden Aktiebolag. S... Ltd. Cisco Systems de Mexico. Cisco had shied from entering the consumer market. International Business Machines Corporation. Bhd. opening a new. Cisco Systems Capital Corp.zo.V. Cisco Systems Import/Export Corporation (U. Protego Networks LLC. Inc. Cisco Systems Poland. Inc.." As Cisco prepared to enter what was being billed as the "bundle wars. In 2003.. S. Cisco Systems (Puerto Rico) Corp. Cisco Sistemas de Redes S. Principal Competitors ADC Telecommunications..A. Telefonaktiebolaget LM Ericsson. Cisco Systems Israel. Madge Networks N. preferring the stability and relatively higher profit margins enjoyed by selling networking equipment to corporations and communications providers. Inc. wireless calling. Inc. who was back to his ebullient self.A.A. Ltd.A. Cisco Systems GmbH (Germany)..A. Microsoft Corporation. (Japan).o. a small acquisition that served as a stepping stone for a massive acquisition announced later in the year. ECI Telecom Ltd. Sp...A. Cisco Systems Thailand. Cisco Systems (Korea) Ltd... Throughout its development... Inc. Cisco Systems Czech Republic.). Inc. Cisco Systems (Colombia).. Cisco announced it was acquiring Scientific-Atlanta. Principal Subsidiaries Cisco Systems Canada Limited. Cabletron Systems. Singapore. Telebit Corporation. Cisco Systems (India). Inc.V. he purchased a manufacturer of networked DVD players named KISS Technology. B.. Cisco Systems Norway AS. Inc. that gives us leadership that is very.. Telebit Corporation. Internet-based telephone service.. (Venezuela).. Inc. Cisco Systems Capital.. 2005 interview with Business Week Online.. and video services such as video-on-demand.S. Ltda.V. Cisco Systems Finland Oy.. Cisco Systems Hungary. Hewlett-Packard Company. Cisco Systems New Zealand Limited. Cisco do Brasil Ltda.Cisco. S. (Singapore). Motorola. a package of converged networks that included broadband Internet access.9 billion for Scientific-Atlanta. Cisco Systems Management B. Fujitsu Limited.L. K.
The change was a marked departure from a product-focused structure. which had been Cisco’s hallmark since inception back in1987. Small/Medium business. Phase-1: The Emergence of a Giant In April-1997 Cisco structured its products and solutions into three customer segments: Enterprise.answers. solutionsbased structure. .com/topic/cisco#ixzz2KT6MAAtx Cisco Systems a company that has reinvented itself time and again has proved that the key to corporate success lies in an organizational structure that is both responsive and in tune with the changing industry and market requirements. and Service Provider. to a customer-oriented. The organizational structure was crafted to address two major new market opportunities at that time: the service provider migration to IP services and the adoption of IP products by small and medium-sized businesses through channel distribution.Read more: http://www.
The Line of Business teams defined and implemented both market and operational strategies that enabled them to deliver end-to-end solutions to their target customers. Product Centric Organization Effectiveness Knowledge Sharing Low .All of Cisco’s research-and-development and solutions marketing would be organized under the three Lines of Business. hardware and network management. An analysis on the effectiveness of “Product Based” organizational structure reveals the following attributes. including integrated software. The different market segments at the time had nothing in common. The fact that Cisco was riding high on the imploding growth in the networking industry meant Cisco did not have to worry so much on costs since margins very high. The new organizational alignment meant increased focus on specific customer segments to provide complete end-to-end solutions.
The downturn in the networking industry that followed the broad meltdown across the technology industry in early 2000 meant Cisco had to act quickly to minimize costs and reduce overhead. To respond to these changes Cisco zeroed in on a centralized engineering and functionally driven organizational structure. Cisco Systems realigned the company's focus around changing industry and customer requirements and to reinforce the company as a dominant force in the networking industry. Customer segments and product requirements that were distinct in the past had become blurred. .Ability to reduce Costs Fostering Innovation Control and Coordination Addressing Customer / Market requirements Efficiency in Resource Utilization Phase-2: The Dot-Com Meltdown Low High Medium High Low In August-2001.
which lowered the cost of product development and manufacture. A centralized organizational structure fostered deeper sharing of knowledge and components across Cisco product groups while promoting more consistent manufacturing and testing to realize economies of scale. The company’s focus was on reigning in costs and respond to revenue shortfalls from declining growth prospects within the industry.The centralized structure was developed to bring Cisco closer to its customers. The emphasis shifted from delivering new product launches or . to encourage teamwork and to eliminate product and resource overlaps and more importantly to provide the industry's broadest family of products united under a consistent architecture designed to help Cisco’s customers improve productivity and profitability. A centralized organization structure enabled Cisco to respond successfully to changing market conditions. The rationale behind a centralized organizational structure was to design all equipments using a baseline standard and architecture.
An analysis on the effectiveness of “Centralized” organizational structure reveals the following attributes. where the network emerged as a platform for all forms of communications and data management. Brazil and India.innovation to survival. “The Technology Organization”: . the revolution in the data center. collaborative and networked Web 2.0 technologies. Centralized Organization Knowledge Sharing Ability to reduce Costs Fostering Innovation Control and Coordination Addressing Customer / Market requirements Efficiency in Resource Utilization Effectiveness High High Low-Medium High Low High Phase-3: Convergence In December-2007 Cisco announced a new “Technology Organization” structure to address the challenges imposed by the next phase of Internet growth and productivity centered on the demands of tremendous growth in video. The new organizational structure enabled Cisco to position itself for growth in new markets and cater to new and emerging markets in China.
The changes were designed to enhance Cisco's effectiveness and efficiency globally in delivering integrated products and solutions. The need for innovation and ability to cater to different market segments that had different product requirements necessitated a move toward a product-technology based organizational structure. An analysis on the effectiveness of the “Technology Organization” structure reveals the following attributes. . The emphasis on software and centralized nature of the Software Group allowed Cisco to access resources globally while driving integration and interoperability across all of Cisco product lines. as well as to provide greater synergies in its development process. reliability and adaptability in mind. With the industry evolving towards a services based Pay-As You Go” revenue model Cisco had to develop products with scalability.
High High Medium .Technology Centric Organization Knowledge Sharing (Across Divisions) Ability to reduce Costs Fostering Innovation Control and Coordination Addressing Customer / Market requirements Efficiency in Resource Utilization Effectiveness Medium Low High Medium .