Contact
Contact Me:sadagopan@gmail.com Linkedin Facebook Twitter Google Profile Search
Resources
Labels
online Archives
Wednesday, June 23, 2004
Cisco Systems celebrated its 20th anniversary not long ago, a milestone CEO John Chambers noted by reflecting on his company's "rich history of enabling the Internet." Yet, before the candles cooled on Cisco's cake, Chambers was looking ahead, as well he should, given the company's continued reliance on a maturing networking business that, in its most recent quarter, still accounted for 70% of revenue. For future growth, Cisco is aggressively branching into six new lines of business--and Chambers is planning for even more. The networking leader is looking for growth in new markets such as security, wireless, storage, and telecommunications. Last year, Cisco spent $3 billion on research and development--more than 15% of its $18.9 billion in sales in 2003. Forty percent of the R&D budget went to what the company calls advanced technologies. So far, the vendor has targeted six such areas--security, optical, IP telephony, home networking, wireless, and storage--which now account for 15% to 20% of revenue. Chambers believes each of those six segments could grow into a billion-dollar business on its own, and has indicated he would like to expand into four to six more new areas over the next several years.Increasingly, Cisco is packaging its products for companies with industry-specific requirements. In addition to targeting telecom companies and Internet service providers, Cisco tailors products for health care, financial, energy, government, retail, and manufacturing companies. Chambers says,"You'll see more product announcements this year from Cisco than you've seen in any year before by a factor of two, most all of it from organic growth. It's the best product pipeline I've ever seen as CEO, across all product lines," Cisco, is a class act -in what it has done in the past, in what it is doing now, and in what it intends to do in future.
