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Cisco Systems Inc

In: Business and Management

Submitted By royal22
Words 3949
Pages 16
Cisco Systems Inc.

INDIVIDUAL PROJECT REPORT

Date Submitted
November, 20, 2013

Table of Contents

SUMMARY DESCRIPTION OF BUSINESS 0
Products and Services Offeered 0
Global Markets Currently Served 0
Corporate Structure and Leadership
Resources and Competitive Position 0
COMPANY'S EXTERNAL ENVIRONMENT 0
Competitors in Top Five Countries Served 0
Marktst For Company and Rivals 0
Key Success Factors for Their Market 0
COMPANY'S COMPETITIVE POSITION 0
Competitive Position in Top Fice Countries 0
Basis for Current Competitive Position 0
Potential for Growth and Expansion 0
EXHIBITS 0
Information Sources
Additional information
Other

Summary Description of Business

Products and Services Offered

Cisco offers a wide range of products and networking solutions designed for enterprises and small businesses across a variety of industries. Cisco services provide intelligent network technologies. Their products and services are made for small business, mid-size businesses, homes, and enterprises or large corporations.

Cisco Systems is a leader in manufacturing network hardware used in computer networks. The company's specialty is making network connectors-routers, bridges and switches. They also design technologies and services for Internet communication. Cisco is known for network products that support more than one protocol. Protocols are standards or sets of instructions that regulate or enable a communication, data transfer or connection between two points (sender and receiver). While Cisco does not write protocols, its products use them to communicate.

The Corporate market refers to enterprise networking and service providers. The products and services involved in this market are borderless networks, collaborations, datacenters and virtualizations, and IP NGN (Next Generation Networks).

Small businesses include home businesses and (usually technology-based) startups. The products and services involved in the market are routers and switches, security and surveillances, voice and conferencing, wireless connections, and network storage systems.

Home user refers to individuals or families who require these kinds of services as the other segments but without much complication and complexity. The products and services involved in this market are broadband, and flip video.

Global Markets Currently Served

Cisco has operations or facilities in North America, Africa, Asia Pacific, Europe, Latin America, and the Middle East. Cisco serves the entire world in terms of products and services.

Cisco often finds itself involved with technical education. With over 10,000 partnerships in over 60 countries:

• Algeria
• Argentina
• Australia
• Austria
• Belgium
• Brazil
• Canada
• Chile
• Colombia
• Costa Rica • Croatia
• Cyprus
• Czech Republic
• Denmark
• Estonia
• Egypt
• Finland
• France
• Germany
• Greece • Hong Kong
• Hungary
• Iceland
• India
• Ireland
• Israel
• Italy
• Japan
• Kenya
• Korea • Latvia
• Liechtenstein
• Lithuania
• Luxembourg
• Malaysia
• Malta
• Mexico
• New Zealand
• Nigeria
• Norway • Oman
• Poland
• Portugal
• Puerto Rico
• Russia
• Saudi Arabia
• Singapore
• Slovakia
• Slovenia
• South Africa • Spain
• Sweden
• Switzerland
• Taiwan
• The Netherlands
• Turkey
• United Arab Emirate
• United Kingdom
• United States
• Venezuela
Corporate Structure and Leadership

The Chairman and Chief Executive Officer of Cisco is John Chamber. Executives work on committees that are referred to as councils and boards and the company makes most of its decisions collaboratively. Cisco's decision to create councils was to foster collaborative team work amongst their structure. Cisco’s corporate structure includes 244 executives and 22 subsidiaries.

Cisco has a council structure with a collection of three cross-company councils which include enterprise, service provider and emerging countries. The Service provider council is led by Pankaj Patel and Nick Adamo, senior vice presidents of service provider engineering and service provider sales, respectively. Enterprise is led by Padmasree Warrior and Paul Mountford, senior vice president/CTO and senior vice president, sales, respectively. Emerging countries is led by Wim Elfrink, chief globalization officer and Edzard Overbeek, president, Cisco Asia Pacific and Japan.

Cisco’s Worldwide Field Operations organization is organized into three regions: the Americas (including U.S., Canada and Latin America); Europe, the Middle East and Africa; and Asia Pacific/Japan/Greater China. The business is managed by geographic regions, but there are dedicated teams for large enterprises, public sectors, commercial, small businesses, service providers and Cisco partners. Rob Lloyd, executive vice president, leads the Worldwide Field Operations.

Resources and Competitive Position

At Cisco customers come first and an integral part of their DNA is creating long-lasting customer partnerships and working with them to identify their needs and provide solutions that support their success. Cisco has shaped the future of the Internet by creating unprecedented value and opportunity for their customers, employees, investors and ecosystem partners and has become the worldwide leader in networking - transforming how people connect, communicate and collaborate.

Some of Cisco’s tools and resources include the support case manager, Cisco feature navigator, error message decoder, output interpreter, command lookup tool, bug search tool, and special file access.

The support case manager allows you to create and manage support cases with the TAC. The Cisco feature navigator allows you to quickly find the right Cisco IOS, IOS XE, IOS XR and Cat OS software release for the features you want to run on your network. The error message decoder helps you research and resolve error messages. You follow each step to receive a description, recommended action, and related resources for your one- or two-line error message. Output interpreter is a troubleshooting tool that reports potential problems by analyzing supported "show" command output from such products as routers, switches, PIX firewalls, IOS wireless access points, and Meeting Place Platforms. Command lookup tool is a detailed description for a particular Cisco IOS, Catalyst, or PIX/ASA command. Bug search tool searches for software bugs based on product, release and keyword. And, special file access is used to download files that have been published with Special File Publish (SFP).

Cisco’s major competitive position is that they like to reinvest their profits to improve customer satisfaction. Thus, Cisco is able to have higher quality products and services. Today, networks are an essential part of business, education, government, and home communications. Cisco hardware, software, and service offerings are used to create the Internet solutions that make these networks possible, giving individuals, companies, and countries easy access to information anywhere, at any time. Cisco was widely regarded as an industry expert and uses its cutting edge technology to run every aspects of its business on the web.

Company’s External Environment

Competitors in Top Five Countries Served

Load balancing was once considered a market that would rapidly be commoditized, but F5 has managed to create sustainable differentiation as the "L4-7" market that evolved into "Application Delivery Controllers" (ADCs). F5 today has the broadest and deepest application relevancy and can significantly reduce the deployment time and improve the performance of applications, such as SharePoint and Exchange. F5's strategy has worked so well that it caused Cisco to dump its own product in favor of partnering with the No. 2 vendor, Citrix.

One can argue the technical merits of Riverbed's Steelhead versus Cisco's WAAS. Riverbed can accelerate the performance of a broader range of applications than Cisco, but for many of the core enterprise applications, WAAS is close. However, the real reason many customers buy Riverbed is that it's fast to deploy and easy to manage. Riverbed does a great job of creating sustainable differentiation, after adding application optimization features over the years.

Juniper's enterprise initiatives have floundered over the years, the company is No. 2 vendor in the service provider routing space. Cisco and Juniper tend to leap-frog one another in technical superiority. But Juniper's latest releases include the T4000, MX and PTX lines.

Arista seems to have the right mindset to create sustainable differentiation against Cisco in the data center. Arista doesn’t venture into markets like ADCs or Metro Ethernet, and will remain laser-focused on data center networking. Arista wants to be to the data center what Juniper is to SP routing.

Over the past five years, Aruba's share in Wi-Fi has more than doubled and is now in the high teens. This hasn't all been at Cisco's expense (Aruba has taken share from Motorola as well), Aruba did implement a "Trojan Horse" strategy with its Airwave management tools. Aruba accepted that Cisco customers buy Cisco hardware, and sold Airwave into those environments to manage the solution. Aruba then jumped all over the 802.11n upgrade cycle and used the Airwave footprint to grab some share.

Brocade has been the market and technology leader in Fibre Channel switching. It was first to have 8 Gig FC, 16 and will likely get to 32 Gig first as well. Brocade has kept its focus on delivering faster and more feature-rich FC and now owns about two-thirds of the market. The company appears to have a real shot now, as the shift to fabrics and software defined networks (SDNs) require data networks to be more efficient, resilient and reliable — like a storage fabric.

HP Networking came out of nowhere and went from relative obscurity to the No. 2 share vendor almost overnight. HP caught Cisco sleeping and managed to grab some share with value buyers at the access edge. Since then, Cisco has countered with purpose-built products that are more in line with HP pricing. HP then countered by acquiring 3Com to refresh its portfolio and challenge Cisco in the data center. Both companies are building integrated data center "stacks," so we should expect to see the once-great partners remain bitter rivals as the battle for the data center rages on.

The most problematic rival for Cisco is Microsoft. Lync, Microsoft's UC solution, introduced new buyers into the mix that have the same level of loyalty to Redmond as network engineers have to Cisco. Cisco has spent countless hours trying to prove that its solution is not only more reliable than Lync, but cheaper and broader. This may be true, but customers buy Lync because of Microsoft familiarity, and that's a tough value proposition to compete with.

Before there was a Cisco-versus-Microsoft battle, there was Cisco versus Avaya. Most people don't realize this, but through its acquisition of Nortel, Avaya actually has over 20% share in voice (not VoIP, but all voice) meaning they control 1 out of every 5 business phones. Under Kevin Kennedy the company has streamlined much of its business, making it more agile than it was in the past, and it will continue to be a threat in the UC space.

Market for Company and Rivals

Competition is only getting tougher for Cisco as it continues to expand in 30 or so new markets while attempting to maintain growth in its core routing and switching businesses. Juniper took one-third of Cisco's share in core routing shortly after coming onto the scene in 1997. Juniper remains Cisco's one and only rival in core Internet routing with a 30% share of the $643 million market in the second quarter. The two companies seek to one up each other with every announcement of a higher speed, higher density system. Current entries in this race are Cisco's recently-announced CRS-3 and Juniper's 250Gbps per slot ASICs for its T series systems. Juniper is also Cisco's closest competitor in a number of security markets, including the $2 billion VPN hardware and software market, and in the $7 billion overall security market, which includes firewalls, VPNs, unified threat management and intrusion detection and prevention systems. Juniper gained a big presence in firewall/VPN systems with its 2004 acquisition of NetScreen. Alcatel-Lucent and Juniper take turns trading the No. 2 position in edge routing, where Ethernet service delivery is a key requirement for applications such as IPTV, Ethernet VPNs and mobile backhaul. Both companies are targeting Cisco's aged 7600 series and new ASR 9000 routers as their key competitive targets. Cisco's has 43% of the $1.34 billion market. Alcatel-Lucent's is looking to grow beyond its 19% share with terabit ASICs for its Service Router 7750 optimized for traffic management and processing of IPTV, WebTV, mobile backhaul and business VPN traffic; and 100Gbps Ethernet interfaces for the edge router. With a 72% share of the $16 billion market, Cisco is dominant in Ethernet switching. Yet HP is most active and vocal in taking on Cisco in enterprise switching. At 10% share, HP is the No. 2 vendor. It verbally challenges Cisco every opportunity it gets at trade shows and conferences. Despite its dominant lead, Cisco is not standing pat. The company continues to unveil new platforms and enhance existing ones, all optimized for three key strategic markets: video, virtualization and collaboration. Former partners HP and Cisco are also becoming bitter data center rivals. HP may have drawn first blood by pledging to revive its ProCurve networking division after Mark Hurd became CEO in 2007. Then Cisco invaded HP's, and IBM's, traditional turf by coming out with its own blade and rack mount data center servers. HP responded by acquiring 3Com to boost its switch market share and overall networking portfolio. Finally, Cisco vanquished HP as a reseller; and HP banished Cisco from its data centers. Similar to switching, Cisco has a close-to-dominant position in wireless LANs with a 58% share of the $1.6 billion market. Aruba's next with 9%. Though that gap is sizeable, Aruba gives Cisco all it can handle in North America sales, where it had a higher percentage penetration in the U.S. than Cisco. Aruba is especially strong in higher education, healthcare and other enterprise verticals, and is outpacing Cisco in 802.11n penetration, according to Dell'Oro Group. And over the last four quarters, Aruba's market share has grown from 8.7% to 11.9% while Cisco's has declined from 60.7% to 54.8%. Not that Aruba is the sole beneficiary of that decline but it undoubtedly played a leading role. Avaya's sole success is UC and collaboration. Indeed, Avaya and Cisco are Nos. 1 and 2 in enterprise telephony, with 17% and 14.6% shares, respectively, of the $12 billion market. The companies were early entrants and decade-long competitors in IP PBXs and handsets. The most recent battlefield for the two is tablet computers tailored specifically for enterprise collaboration and unified communications. Brocade and Cisco are 1 and 2, respectively, in Fibre Channel storage-area networks. Brocade has the lion's share of the Fibre Channel SAN market at 64% and Cisco's attempting to take the industry to Fibre Channel-over-Ethernet, a converged SAN/LAN switching fabric dependent on Ethernet switches, an area where Cisco is dominant. Brocade also recently proposed a unified data center, called Brocade One, as an alternative to those from Cisco and IBM/Juniper. Even so, Brocade continues to invest in, develop and aggressively market its native Fibre Channel technology to its deep installed base and cash cow. Cisco entered the Fibre Channel SAN business in 2002 and, after initially taking half of the modular SAN switch market in 2007, has fallen to 36% share of the $843 million market in 2009. In that time, Brocade's share rose from 50% in 2007 to its current 64%.

Key Success Factors for their Market

Key success factor and overall approach for Cisco is to solve their customers’ facing problems by developing network applications through “Client Funded Projects” by aligning business and IT; through leverage relationships with partners and create ubiquitous, enterprise-wide connectivity and electronic publication model A factor in Cisco’s success is that they keep steady. A more detailed look at the financial underpinnings of the company reveals a remarkable consistency at the heart of Cisco’s performance over the years. A strategy of under estimate and over deliver has led the company (despite its recent troubles) to beat its earnings estimates for the last 8 quarters in a row. Compared to the erratic nature of its competitors performance, such as Juniper (who have been having their own restructuring problems recently), this performance is amazingly steady. Cisco has remained a leader in market share. Not only does Cisco have a huge range of products in its portfolio which allows it to keep its margins intact at all times, it also places a huge level of importance on market share leadership. The company has a minimum target share of 40% in all markets it is active in and won’t even contemplate staying in a market if its share drops below 20%. The company has dominated the networking industry (with a 70% share) for the better part of the last decade. Cisco is always sensible about mergers and acquisitions. Another clear trend running throughout the history of Cisco is a clear and coherent strategy for gobbling up smaller companies. This focus on picking up software assets that complement the overall structure and goals of the company mean that the company tends to keep its purchases relatively small in the area of hundreds of millions. Another factor is that Cisco was quick to try and establish themselves in the emerging market economies of the largest emerging economies, with China and India now providing 20% of the company’s business. The success of this strategy comes from the recognition that the majority of the world’s population lives in these countries and the potential spending, earning and innovative power that could be unlocked through raising the standard of living is immense.
Company’s Competitive Position

Company’s Competitive Position in Top Five Countries

Juniper's enterprise initiatives have floundered over the years, the company is No. 2 vendor in the service provider routing space. Cisco and Juniper tend to leap-frog one another in technical superiority. But Juniper's latest releases include the T4000, MX and PTX lines.

Arista seems to have the right mindset to create sustainable differentiation against Cisco in the data center. Arista doesn’t venture into markets like ADCs or Metro Ethernet, and will remain laser-focused on data center networking. Arista wants to be to the data center what Juniper is to SP routing.

Over the past five years, Aruba's share in Wi-Fi has more than doubled and is now in the high teens. This hasn't all been at Cisco's expense (Aruba has taken share from Motorola as well), Aruba did implement a "Trojan Horse" strategy with its Airwave management tools. Aruba accepted that Cisco customers buy Cisco hardware, and sold Airwave into those environments to manage the solution. Aruba then jumped all over the 802.11n upgrade cycle and used the Airwave footprint to grab some share.

Brocade has been the market and technology leader in Fibre Channel switching. It was first to have 8 Gig FC, 16 and will likely get to 32 Gig first as well. Brocade has kept its focus on delivering faster and more feature-rich FC and now owns about two-thirds of the market. The company appears to have a real shot now, as the shift to fabrics and software defined networks (SDNs) require data networks to be more efficient, resilient and reliable — like a storage fabric.

HP Networking came out of nowhere and went from relative obscurity to the No. 2 share vendor almost overnight. HP caught Cisco sleeping and managed to grab some share with value buyers at the access edge. Since then, Cisco has countered with purpose-built products that are more in line with HP pricing. HP then countered by acquiring 3Com to refresh its portfolio and challenge Cisco in the data center. Both companies are building integrated data center "stacks," so we should expect to see the once-great partners remain bitter rivals as the battle for the data center rages on.

Basis for Current Competitive Position

The basis for Cisco’s competitive position is to solve their customers’ facing problems by developing network applications through “Client Funded Projects” by aligning business and IT; through leverage relationships with partners and create ubiquitous, enterprise-wide connectivity and electronic publication model Cisco’s competitive strategy is to remain steady. A more detailed look at the financial underpinnings of the company reveals a remarkable consistency at the heart of Cisco’s performance over the years. A strategy of under estimate and over deliver has led the company (despite its recent troubles) to beat its earnings estimates for the last 8 quarters in a row. Compared to the erratic nature of its competitors performance, such as Juniper (who have been having their own restructuring problems recently), this performance is amazingly steady. Cisco has remained a leader in market share. Not only does Cisco have a huge range of products in its portfolio which allows it to keep its margins intact at all times, it also places a huge level of importance on market share leadership. The company has a minimum target share of 40% in all markets it is active in and won’t even contemplate staying in a market if its share drops below 20%. The company has dominated the networking industry (with a 70% share) for the better part of the last decade.
Potential for Growth and Expansion

The regions of emerging markets include Central and Eastern Europe, Latin America and the Caribbean, the Middle East and Africa, and Russia and CIS.

The countries of the Emerging markets regions are each experiencing double-digit growth by transforming their societal landscape through the power of technology. Cisco is working with some to build out basic broadband.

Fiscal 2013 for Cisco was marked by the emergence of new technologies and business models, and industry consolidation. These factors yielded both headwinds and tailwinds for Cisco's business, and their ability to consistently navigate through dynamic environments has continued to make them uniquely positioned in the industry. They remain focused on prioritizing and simplifying their business operations to both drive Cisco's continued market leadership and accelerate through these industry changes rapidly and with optimal flexibility. They realize that they must rebalance their resources to invest in new opportunities as well remain focused on profitable growth. By managing their overall business across geographic regions, customer markets, and technologies they continue to increase their strategic position in the market and deliver on their commitments to shareholders.

Cisco can see opportunities to continue to drive profitable growth. These include cloud and the unified data center, the mobility market transition, and next-generation video. They are investing for growth in services, security, emerging markets, and software offerings. And, they will continue to move into new markets that provide recurring revenue streams. Longer term, they intend to focus on IoE. They believe that by bringing "everything" online, IoE will create significant opportunities for organizations, communities, and countries to obtain greater value from networked connections.

Though Cisco is attempting to take a leadership role in shaping the Internet of Everything, it isn't the only major player vying for influence.
Microsoft has been working on the concept for several years. The software giant has recently promoted its StreamInsight technology, for example, which provides for near-continuous, real-time analysis of data. Many of the devices within the Internet of Things are equipped with sensors that collect information at all times, doing everything from allowing an iPhone to find a nearby restaurant to helping the NYPD catch criminals. The best way to harness all the data will be among the Internet of Everything's primary debates, so it should be no surprise that Microsoft is laying plans.
Qualcomm is another contender. Its AllJoyn project is an open source network that connects devices to one another, rather than linking each object back to the Internet. Intel is also in the field, and an Internet of Things Consortium and Internet of Things Architecture Forum already exist. Cisco would of course be thrilled if it can unite various factions under a common umbrella. Chambers said that a cooperative, standards-based approach would spread growth across all industries. Even players who have a head start would benefit, he implied, because it's better to have a big piece of an enormous pie than a huge piece of a small one.

Exhibits

Web Sites

Cisco www.cisco.com Network World
www.networkworld.com

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