“I’m thrilled that you’re going to hear from our incredible leadership team about why we’re so confident and optimistic about the future,” Cisco CEO Chuck Robbins said, as he opened the company’s first Investor Day event since 2017.
With key themes around trust, innovation, and choice, Robbins and his senior leadership team welcomed investors and analysts from around the world to hear a wide range of insights about the company’s achievements — and its ambitious goals for the future.
Cisco leaders highlighted the company’s longstanding, trusted relationship with customers and partners; its groundbreaking innovations to support critical market transitions like the shifts to hybrid cloud and hybrid work; and its great progress in flexible consumption models for both software and hardware products. Not to mention, Cisco’s deep commitment to corporate social responsibility and workplace culture that has helped make the company the world’s No. 1 place to work in 2021.
It all adds up to what Scott Herren, Cisco’s EVP and chief financial officer, called an aggregate $900 billion opportunity for the company to pursue. This equates to an expected compound annual growth rate (CAGR) for Cisco of 5 percent to 7 percent between the most recently closed year, FY2021, and end of FY2025.
In his opening keynote, Robbins began by emphasizing some of the great progress the company has made since he became CEO in 2015 — among them the move to flexible consumption models.
“Perhaps the most important aspect of our transformation that we’ve been driving is our move towards subscription software,” he said. “We started when I became CEO with $3.4 billion in subscription software, and we exited the last fiscal year at almost 12 billion dollars. That is a 23 percent CAGR over that time period. And our total software grew at a CAGR of 10 percent.”
Robbins continued by sharing his thoughts on the critical importance of Cisco technologies moving forward.
“Every customer that I talk to will tell you that they’re accelerating their digital transformation,” he said. “They’re moving faster than they ever thought they would be. This digital revolution is real and it’s accelerating. And it’s driven by this move to hybrid everything — hybrid cloud, hybrid work — that requires modernized infrastructure and a new security architecture.”
Hybrid cloud and hybrid work: technology and expertise for twin mega shifts
Robbins called on Liz Centoni, Cisco’s EVP and chief strategy officer and GM for applications, to expand further on Cisco strategy and growth — for what she called “a multi-cloud, hybrid-work, app-centric world.” It’s a strategy that’s centered around offering customers the most powerful technology to support these transitions, while delivering unparalleled visibility into highly distributed cloud environments.
“It’s an app-centric world,” said Centoni. “So, it’s critical to deliver the best user experience, both for traditional and cloud native applications, by delivering visibility, insights and actions across all of the environments and any application stack.”
Centoni continued by drilling down on what makes Cisco unique.
“We’re the only vendor that can offer customers a comprehensive view across this full stack.,” she said. “Everything we build uses a cloud-first and app-centric approach. Every product in our portfolio, if it can be, is cloud managed, cloud delivered, and offered-as-a-service, delivering unparalleled experiences at scale, with simplicity and speed.”
“We are meeting our customers where they prefer to consume,” Centoni concluded, emphasizing just what these massive trends mean for Cisco’s ongoing growth.
“This continued acceleration to the cloud is creating tailwinds for every single part of our business. We continue to be confident in cloud as a significant growth driver for the business.”
Todd Nightingale, Cisco’s EVP and GM for networking and cloud, weighed in with his own insights into how secure, agile networks will support the twin mega shifts to hybrid cloud and hybrid work.
“With secure, agile networks, we have the most feature-complete technology in the world, bar none,” he emphasized. “We have an opportunity with this platform strategy to drive a broad and aligned portfolio, and we are starting to see that transition today.”
Nightingale then illustrated a $98 billion opportunity for Cisco, a combination of networking-related areas such as hybrid cloud, IoT expansion, and HW-as-a-Service. These are in addition to existing opportunities such as wireless, SD-Branch Routing, and hybrid work.
“This can be grabbed by Cisco,” he said, “because we have enormous momentum in the market, enormous trust from our customers, and we are driving the transitions that they need to grab onto.”
As we all know, the COVID-19 pandemic accelerated the shift to hybrid work at a stunning pace. And with Webex, Cisco offers the most powerful, secure, and flexible collaboration platform for this ongoing transition. Jeetu Patel, Cisco’s EVP and GM for security and collaboration, highlighted the importance of Webex in a challenging time, while looking towards a better future, especially with recent innovations like AI-powered noise cancellation and real-time translation.
“We made major strides with WebEx in helping our customers navigate the challenges of the past 18 months,” Patel said. “And in figuring out the new normal, our customer momentum is stronger than ever. WebEx is a leading player in the collaboration market, and we’re proud to be trusted by 95 percent of the Fortune 500.”
As for the future of Webex, Patel said, “We see growth in three primary areas: capturing new customer logos, focusing on expansion of the Webex suite, and increasing the penetration of devices in hybrid-work spaces.”
“What we’re hearing from the market and our customers about why we win,” he added, “includes three things; our breadth of offering, user experience, and a trusted platform.”
Reimagining the Internet
Jonathan Davidson, EVP and general manager for Cisco’s Mass-Scale Infrastructure group, picked up the innovation theme with some thoughts on the internet of the future. To Davidson, that’s a future where the internet doesn’t just offer tremendous improvements in speed, bandwidth, and latency, but also creates opportunity for millions of underserved people.
A key part of that will be reimagining the economics of the internet.
“An internet connection is affordable in only 29 countries,” he said. “And bringing the internet to the offline world could add $6.7 trillion to the global economy and lift millions of people out of poverty.”
Cisco’s efforts to change all that, Davidson explained, include some important new innovations that will bring greater compute power, lower energy consumption, and new simplicity to networking. In short, he said, Cisco is reimagining the economics of the internet
“Over the past six years,” he said, “Cisco's invested billions in both organic and inorganic innovation to transform the internet for the future. Specifically, our strategic investments in silicon and optics technologies creates a differentiator for Cisco.”
Cisco’s Silicon One chip, combined with Acacia optics, creates an all-new paradigm, called Routed Optical Networking.
“This is the most significant change that the internet has experienced in over 30 years,” Davidson said. “Our leadership in silicon, optics, software and systems enable Cisco to once again redefine the economics of building and operating networks in ways no other vendor is capable of.”
“Cisco Silicon One architecture is so revolutionary,” he added, “we have the confidence we will lead in performance and power efficiency for the next decade.”
Jeetu Patel returned to discuss a critical challenge for all organizations: security. The risk of cyberattacks, he began, is heightened by three key trends: hybrid work, the shift to cloud, and a growing shortage of qualified security talent.
“Today, we have over 300,000 customers and 100 percent of the fortune 100 that trusts Cisco security products,” Patel said. “We’ve been relentlessly innovating. We’ve delivered more than 500 innovations across our portfolio in the past year.”
Many of those innovations are centered on making security more accessible to more organizations than ever before, by creating technology that’s easy to access, simple to deploy, and highly automated.
“We are doubling down on our pace of innovation in some specific areas to solve our customers’ biggest problems; zero trust, SASE, and threat detection and response.”
A commitment to a better future
Gerri Elliott, EVP and chief customer and partner officer, then spoke about how Cisco is making it easier than ever to adopt these great technologies, with more choice and flexibility in purchasing than ever before.
“We are launching an extremely flexible enterprise agreements platform,” she said. “We will introduce and accelerate new routes to market, like cloud marketplaces and managed services. And underpinning each of these areas are the innovations we are making to our CX and Services portfolio.”
And Liz Centoni returned to share additional insights on optimized application experiences, which she called a $36 billion market that is growing in double-digits.
“Our approach to full-stack observability builds monitoring across full-stack visibility, insights, and actions,” she said. “Customers know when there is a problem, what occurred, and how to tackle it immediately.”
The day ended with important insights on Cisco’s core purpose: powering an inclusive future for all. Fran Katsoudas, Cisco’s EVP and chief people, policy, and purpose officer, joined Chuck Robbins to share some final thoughts on the company’s commitment to social justice, sustainability, and spreading opportunity and education around the world.
“More than ever, we are focused on driving lasting generational change,” Katsoudas said. “Once upon a time, CSR sat on the side, but now we know it has to be embedded in everything we do.”
Chuck Robbins then summed up the event in his closing comments.
“I'm incredibly proud of what we've accomplished, including meeting the targets we laid out in 2017,” he said, “and the acceleration of this progress, despite the pandemic. You have my commitment and the commitment of our entire team to drive long-term profitable growth with financial and operational discipline, and to continue to deliver the innovation that matters most to our customers.”
To watch replays of the event and to learn more about Investor Day, you can click here.
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