Cisco - Why Is It Such a Big Name in the Networking Industry?

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Cisco is a networking equipment corporation, that designs, manufactures, and sells its products. Cisco might not be the only corporation that has developed network nodes. So, what accounts for its victory?

The name "Cisco" is an acronym for San Francisco, where the company was founded in 1984 by Stanford computer scientists Sandy Lerner and Leonard Bosack. Cisco Systems Inc. is a networking multinational corporation based in the United States.

Cisco was the very first company to provide routers that could handle several internet protocols. Their early devices were also distinguished by their traditional CPU architecture. Their technology was cutting-edge, and hardware was rarely an issue.

Cisco isn't a household brand, but it is well-known. They are one of the world's largest networking firms, with a market capitalization of over $200B, ranking them at number 64 on the Fortune 500 list.

Here's learning all about Cisco, its Founders and Team, Funding and Investors, Business and Revenue Model, Growth, Challenges Faces, Name, Tagline, Logo and more.

Cisco - Company Highlights‌

  • Startup Name-Cisco
  • Headquarters-San Jose, California, United States
  • Industry -Networking hardware, Networking software
  • Founders-Leonard Bosack and Sandy Lerner
  • Founded-December 10, 1984
  • Areas Served-Worldwide
  • Revenue US-$49.81 billion (2021)
  • Current CEO-Chuck Robbins (CEO & Chairman)

Cisco - Latest News

As of January 26th, 2022, Cisco released its Data Privacy Benchmark Study for 2022, a yearly worldwide examination of security business practices that emphasizes the influence of privacy on enterprises and their perspectives on data protection.

Privacy is mission-critical, according to the 2022 research, with 90 per cent of respondents considering it a business requirement. According to the poll, privacy expenditure continues to climb, and businesses see a strong return on investment from privacy spending.

As of January 20th, 2022, Cisco has announced an extension of the Cisco Catalyst 9000 range, which is built on the powerful Unified Access Data Plane (UADP) ASIC silicon, to provide additional enterprise-grade switching capabilities to the industrial edge for industries like utilities, oil and gas, highways, and rail.

As companies strive to increase economies, employee safety, and business agility and promote hybrid work, functional connectivity in industrial areas is rising at an exponential rate. As operational technology (OT) devices are integrated onto corporate networks, IT knowledge is necessary to expand and protect the network as the operational world advances.

About Cisco

Cisco Systems is a multinational technology corporation headquartered in the United States that specialises in computer networking.

Cisco networking services link computing devices, and communication networks with people, enabling individuals to access and transmit data regardless of computer system type, location, or time.

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 is the only company that can assert a 'legacy' in a market as youthful as networking systems. Cisco's networks not only carry 85% of all Online traffic; the corporation actively utilizes the Internet to operate its businesses, from purchases made online and stock management to employee evaluations and travelling expenditures.

Cisco - Logo and Meaning

The two towers of the Golden Gate Bridge in San Francisco, California, are shown in Cisco's company logo.

‌The company's engineers were insistent upon using lower case "cisco" in its early years since the term "Cisco" was taken from the city name San Francisco.‌

Cisco - About Founders and Team

Cisco was founded by Sandra Lerner and Leonard Bosack.

‌Cisco was created by Sandra Lerner and Leonard Bosack, (then) a married couple who met as students at Stanford University. They continued working at the institution after graduating in 1981, supervising the computer facilities of two distinct departments.

They were strongly influenced by Standford's technology from the early 1980s. Bosack used technologies developed by other Stanford employees in the 1970s to connect their individual computer networks.

He and Lerner realised that router technology, as it was known at the time, could be extremely inexpensively adapted for large-scale usage outside of the institution. Cisco (originally called "Cisco Systems") was created in December 1984 by the two, who named the business after the city of San Francisco. Cisco eventually bought Stanford's proprietary technology.

Cisco's initial product, a network interface card for Digital Equipment Corporation computers, was introduced in 1985. The next year, it had its first major success with a router that supported numerous network protocols. Lerner was fired from Cisco in 1990, shortly after the firm sold its first stock to the public, and Bosack also quit.

‌This revitalized the company. Chuck Robbins brought an outside perspective as he had been at that company for the 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. 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 - Startup Story

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 it required more cash to expand and as the result, it 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 later came back to bite them. Just a couple of months after they came, they changed to 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.‌

‌‌Cisco - Business Model

Cisco earns money through selling networking and communications hardware and software, which represents the Internet's backbone.

Applications: The selling of software-oriented services that sit on top of Infrastructure Platforms, such as collaboration (Cisco TelePresence, for example), analytics software, and, the internet of things (IoT) generates revenue.

Infrastructure Platforms: The selling of fundamental networking technologies such as routing, switching, data centre devices, and wireless yields revenue.

Services: The provision of support services and technical consulting generates revenue.

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.

Cisco - Growth

Cisco Systems Inc. has been on a goal for the past few years: to conquer the data networking business, just like IBM did with mainframe computers and Microsoft and Intel did with pcs.

Cisco, situated in San Jose, Calif., has gone on a significant acquisition binge to achieve this lofty aim, purchasing 14 firms since late 1993. Cisco evolved and adapted to its ever-changing surroundings. During the mid to late 1990s, Cisco adapted to the internet protocol as the internet age progressed.

They introduced devices such as the ASA 5200 and GSR (Gigabit Switch Router) routers, but the dot-com bubble, like that of any other technological business at the time, had a significant impact on their growth. But, more than any other technological business, Cisco was able to reap the rewards of the dot-com bubble.

Cisco had become the most valuable firm in the world by late March 2000, after surpassing Apple in the game. When the dot-com market collapsed, Cisco Systems, like Oracle and Dell, suffered a huge drop. However, because none of the firms had achieved the same heights as Cisco Systems, they were not as badly affected.

Cisco Systems intends to dominate its industry and has already made 237 acquisitions since its inception. While many acquisitions are stressful, Cisco's revenues and net profits have more than quadrupled since 1996. The key is to look for organisational synergies before making a purchase.‌

Cisco - Competitors

The circumstances in the early 2000s provided an ideal opportunity for Cisco's competitors to enter the market. Juniper Networks, the largest rival, was adamant about passing the IP and MPL package. They published their first part a few years before in 1999, but this is when they started to take off.

Cisco's market share was eroding, and they now own 30% of the market. Cisco swiftly countered by introducing more powerful processing cards and GSR routers. A6 are application-specific integrated circuits, which they created as well.

They were particularly popular with Bitcoin and theory mining, and in 2004, they began migrating to CSR-1, a new high-level platform. They also received IOS-XR, a new software architecture. Cisco was able to recover from the dot-com bubble thanks to these reforms, and it began to thrive again.

Cisco - Mistakes and Downfall

Cisco made the mistake of attempting to become a household name in 2006. They began by renaming themselves Cisco rather than Cisco Systems. They've also spent a lot of time and money advertising links to these items, as well as their prospective consumer costs.

They were also attempting to focus on their conventional business at the same time. They were also seeking to expand globally and enter new markets while all of this was going on. For example, they attempted to develop a foothold in India by investing $1 billion in a global centre of ease in Bangalore.

They were also attempting to acquire their way into new markets on top of all of this. But here's the thing: one person can only do so many things at once and be effective at all of them. And Cisco's attempt to achieve all of these things at the same time was doomed to fail. Despite their efforts, their opponents were rapidly gaining momentum.

They faced domestic rivalry from Juniper Networks, as well as international competition from Huawei, which has recently gained a lot of attention. Cisco's revenues were so low as a result of all of this that they chose to slash their spending by $1 billion each year in 2011. What precisely did they do to achieve this?

Mostly by laying off workers. They fired 3000 people right away, and hundreds more were granted early retirement packages and other benefits. After everything was said and done, 10,000 jobs were lost, accounting for 14% of their workforce. Cisco was clearly in a poor situation.

Cisco sold eastbound lines to Belkin International in 2013, and this interchanged from the consumer to the network side. Years of mistakes, however, continued to have disastrous repercussions. They had to reduce 4000 and 6000 positions in 2013 and 2014, respectively.

Cisco - Future Plans

Over the previous two decades, Cisco has reaped the benefits of the internet's growth and increased traffic. Cisco predicts that worldwide network traffic would expand by 26% annually until 2022, thanks to the expansion of online services such as video streaming and gaming.

"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 intends to bring its 75,000 employees back into the office once the epidemic has passed, while still allowing for remote work. After converting its entire worldwide staff to remote work, the IT giant is taking efforts to ensure that employees can continue to work from home, such as strengthening networks to allow for more remote access to corporate databases.

"How can we improve the robustness and resilience of our networks and connectivity?" "How do we scale up much more effectively," Cisco's chief operating officer, Irving Tan, explained. "There's a lot to learn, and it's still early in the game." By equipping individuals and businesses with problem-solving skills and revolutionary technology through Cisco Networking Academy, they want to offer the advantages of digitalization to one billion people by 2025.

Cisco - FAQs

What does Cisco do?

Cisco Systems is a multinational technology corporation based in the United States that specialises in communication networks.

When was Cisco founded?

Leonard Bosack and Sandy Lerner founded cisco on December 10, 1984.

How does cisco make money?

Cisco earns money through selling networks and telecommunications software and hardware, which represents the Internet's backbone.