Cisco to Expand Services Business

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Cisco has announced a new business strategy with a greater emphasis on services and the cloud. At the same time, the company is launching a new branding campaign.

NetworkWorld’s Stephen Lawson reported, “Cisco Systems plans to expand its services business over the next several years, seeing a more important role for itself in a world of connected machines and devices. The company will build up its managed services and consulting services, focusing on specific vertical industries, Chief Technology and Strategy Officer Padmasree Warrior said in an interview, summarizing the company’s messages from its annual financial analyst conference Friday. Cisco currently gets about 20 percent of its revenue from services, but it plans to increase that proportion to 25 percent or more over the next few years, Warrior said. However, the company will continue to work with services partners, such as Accenture and specialized firms in specific industries, rather than launching a broad, overarching services business like that of IBM, she said.”

The AP’s Peter Svensson added, “Cisco Systems Inc. isn’t content to be the world’s largest maker of computer networking gear. It says it wants to become the ‘No. 1’ supplier of information technology to big businesses by broadening its offerings of services and software. But when Cisco says ‘No. 1 IT company,’ it doesn’t mean that it’s going to be the biggest-selling company. That goal is out of reach, as IBM Corp.’s revenue is twice that of Cisco. Rather, Cisco CEO John Chambers says he wants the company to loom largest in the minds of its customers and to be the one setting the pace in the industry. Being No. 1, he says, means having the best customer satisfaction and the best profit margins for products.”

All Things D’s Arik Hesseldahl observed, “Having spent the better part of two years re-inventing and re-sizing itself through layoffs, restructurings and acquisitions, networking giant Cisco Systems has throughout the process struggled to explain itself to the world. No one is quite sure what kind of company it intends to be, and it’s not entirely clear that Cisco itself really knows. The company intends to change that, at least in one fashion, with the launch of a significant branding campaign combining broadcast, print, Web, social and augmented reality that gets under way today and should run well into next year. CEO John Chambers previewed the ‘Tomorrow Starts Now’ campaign at Cisco’s annual meeting with financial analysts in New York on Friday.”

David Zielenziger with the International Business Times noted, “Cisco’s current market value, though, is a mere $102.9 billion, which is the problem. That’s why Chambers, Moore and senior management unwrapped a new strategy to adapt to the Internet and cloud age, making Cisco the top company in the sector once again. The key is reliance on so-called software-defined networks.”