News Release

Cisco Unveils "Network of Networks" Strategy

The message at Cisco's Worldwide Analyst Conference was
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Dec 08, 2000

The message at Cisco's Worldwide Analyst Conference was delivered loud and clear by CEO John Chambers: Cisco is perfectly positioned to break away from its competitors.

"The Internet is causing rapid change and creating disruptive market transitions in not only the communications industry but nearly every sector of the economy," said Chambers. "We believe that the Internet is a historic economic change agent and that Cisco's Internet expertise will enable our customers to successfully navigate through the market transition and come out stronger than before."

Chambers reflected on the state of the New Economy and pointed to the Internet as the "Network of Networks." The "Network of Networks," he said, enables businesses, telecommunications companies and large enterprises to more efficiently deploy services and thereby keep pace with emerging business models. With a clear, global balance across product families, architectures, customer markets and geographies, Cisco is the only company that can provide changing businesses with comprehensive, end-to-end solutions. As a result, Chambers said, "Cisco can grow in good times or bad."

Recognizing the signs of economic slowdown, Chambers said a market in transition gives Cisco a great opportunity to surge ahead of its competitors. Chambers explained how the breakaway strategy works through four lines of business. First, the Enterprise Line of Business is taking advantage of the competition's departure from the market to solidify its leadership role due, in part, to its success in Voice over Internet services. Second, the Commercial Line of Business is creating a new market of services that enable business professionals to access their company's network from remote locations. Third, the Service Provider Line of Business is driving the change to data-centric networks and helping service providers make the transition from voice-only to converged services. And the fourth differentiator, Chambers said, is Cisco's Internet Business Solutions Group, a consulting arm dedicated to helping customers with Internet business strategies.

"Cisco is fortunate to be at the center of an economic revolution that is reshaping not only the economy, but all facets of the society. As the most advanced user of the Internet, Cisco has developed unique relationships with customers seeking to understand how they, too, can leverage the Internet to achieve the "Network Effect" of increased productivity, competition and growth," said Chambers.

Cisco reported first quarter earnings for fiscal year 2001 of $6.52 billion, a 66 percent increase over the first quarter of fiscal 2000. The Company currently has twelve product families that are at or above billion-dollar run rates and each of its regional theaters grew bookings in the double digits sequentially and grew over 50 percent year over year in the first quarter of fiscal year 2001.