https://www.channelfutures.com/wp-content/themes/channelfutures_child/assets/images/logo/footer-new-logo.png
  • Home
  • Technologies
    • Back
    • Analytics
    • Artificial Intelligence
    • Cloud
    • Data Centers
    • Desktop
    • IoT
    • Mobility
    • Networking
    • Open Source
    • RMM/PSA
    • Security
    • Virtualization
    • Voice/Connectivity
  • Strategy
    • Back
    • Best Practices
    • Business Models
    • Channel 101
    • Channel Programs
    • Channel Research
    • Digital Transformation
    • Diversity & Inclusion
    • Leadership
    • Mergers and Acquisitions
    • Sales & Marketing
    • Specialty Practices
  • MSSP Insider
    • Back
    • Business of Security
    • Cloud and Edge
    • Endpoint
    • Network
    • People and Careers
    • Training and Policies
  • MSP 501
    • Back
    • 2021 MSP 501 Application
    • 2020 MSP 501 Rankings
    • 2020 Hot 101 Rankings
    • 2020 MSP 501 Report
  • Intelligence
    • Back
    • Our Sponsors
    • From the Industry
    • Content Resources
    • COVID-19 Partner Help
    • Galleries
    • Podcasts
    • Reports
    • Videos
    • Webinars
    • White Papers
  • EMEA
  • Awards
    • Back
    • Excellence in Digital Services
    • 2021 MSP 501
    • Top Gun 51
  • Events
    • Back
    • CP Conference & Expo
    • Channel Partners Evolution
    • Channel Evolution Europe
    • Channel Partners Event Coverage
    • Webinars
  • Channel Mentor
    • Back
    • Channel Market Intelligence
    • Channel Educational Series
Channel Futures
  • NEWSLETTER
  • Home
  • Technologies
    • Back
    • Analytics
    • Artificial Intelligence
    • Cloud
    • Data Centers
    • Desktop
    • IoT
    • Mobility
    • Networking
    • Open Source
    • RMM/PSA
    • Security
    • Virtualization
    • Voice/Connectivity
  • Strategy
    • Back
    • Best Practices
    • Business Models
    • Channel 101
    • Channel Programs
    • Channel Research
    • Digital Transformation
    • Diversity & Inclusion
    • Leadership
    • Mergers and Acquisitions
    • Sales & Marketing
    • Specialty Practices
  • MSSP Insider
    • Back
    • Business of Security
    • Cloud and Edge
    • Endpoint
    • Network
    • People and Careers
    • Training and Policies
  • MSP 501
    • Back
    • 2021 MSP 501 Application
    • 2020 MSP 501 Rankings
    • 2020 Hot 101 Rankings
    • 2020 MSP 501 Report
  • Intelligence
    • Back
    • Our Sponsors
    • From the Industry
    • Content Resources
    • COVID-19 Partner Help
    • Galleries
    • Podcasts
    • Reports
    • Videos
    • Webinars
    • White Papers
  • EMEA
  • Awards
    • Back
    • Excellence in Digital Services
    • 2021 MSP 501
    • Top Gun 51
  • Events
    • Back
    • CP Conference & Expo
    • Channel Partners Evolution
    • Channel Evolution Europe
    • Channel Partners Event Coverage
    • Webinars
  • Channel Mentor
    • Back
    • Channel Market Intelligence
    • Channel Educational Series
    • Newsletter
  • REGISTER
  • MSPs
  • VARs / SIs
  • Digital Service Providers
  • Cloud Service Providers
  • CHANNEL PARTNERS ONLINE
 Channel Futures

Data Centers


Chuck Robbins, CEO of Cisco

Cisco Outlook Shows Robbins Turnaround Hasn’t Spurred Growth

  • Written by Bloomberg
  • September 21, 2017
Cisco’s transition into a company that’s less dependent on hardware is hurting its overall growth as the software and services businesses that CEO Chuck Robbins is trying to build take time to gain ground.

Cisco Systems Inc., whose machines form the backbone of the internet, predicted another revenue decline as the company tries to remake itself amid a changing networking industry.

Revenue in the current period may decline as much as 3 percent from a year earlier, the San Jose, California-based company said. That indicates sales of as little as $11.98 billion and compares with an average estimate by analysts for $12.1 billion. Net income in the fiscal first quarter, which ends in October, will be 48 to 53 cents a share. On average, analysts project earnings of 52 cents.

Cisco’s transition into a company that’s less dependent on hardware is hurting its overall growth as the software and services businesses that Chief Executive Officer Chuck Robbins is trying to build take time to gain ground. The company still gets the biggest chunk of revenue from high-priced hardware and that’s a challenge during an industry shift toward cheaper, software-based networking.

“It’s a big company and this kind of transition just has to be a gradual one,” said Simon Leopold, an analyst at Raymond James & Associates. “People will be patient. If you ask me how patient, I can’t say.”

Cisco shares fell 3.7 percent to $31.14 at 10:03 a.m. in New York Thursday. That brought its gains for the year to 3 percent, compared with a 17 percent gain by the Nasdaq Composite Index.

Cloud Competition

Robbins is working to restore the kind of growth that made Cisco one of the world’s largest companies. The networking-gear maker hasn’t reported an annual revenue gain of more than 10 percent since 2010. His effort to fire up sales are being hampered by a shift to computing in the cloud — in remote data centers that provide services over the internet. Owners of such facilities like Amazon.com Inc.’s Amazon Web Services, are increasingly building their own hardware and replacing traditional suppliers of servers, storage and networking.

Profit in the fiscal fourth quarter, which ended July 29, was $2.42 billion, or 48 cents a share. Sales fell 4 percent to $12.1 billion, Cisco said Wednesday in a statement. That marked the seventh consecutive year-over-year contraction in quarterly revenue. Analysts on average projected profit of 51 cents a share on revenue of $12.06 billion, according to data compiled by Bloomberg.

Sales in Cisco’s biggest business, switching, declined 9 percent in the fourth quarter as did revenue from routing, the second-largest unit. Collaboration, which includes videoconferencing, fell 3 percent.

Cisco’s customers had held back on ordering ahead of the company offering a new set of products for the switching market, according to Robbins. That was just a “pause” and demand for the new range of switches is good, he said. Overall, orders improved in the quarter compared with the preceding three months.

Slower Transition

The company’s transition into a software company that books recurring revenue is more difficult than at other companies because Cisco has traditionally been paid upfront for hardware, he said in a phone interview. Offering switches and routers that are more flexible and come with software-as-a-service subscriptions will help speed up that shift and rekindle revenue growth, he said.

“One of the key things that we needed to do was get some energy in our core markets,” Robbins said. That started with the offering of new switch products in June. “You’re going to see more and more of that innovation coming from us.”

Software and subscription deferred revenue is now more than $5 billion, Robbins said. That represents a gain of 50 percent from the same period a year earlier. He declined to predict when company revenue will return to growth.

“I don’t believe that any type of company has been through the type of transition that we’re going through,” he said. “It may take a little longer. I feel good about where we are.”

Tags: MSPs VARs/SIs Data Centers Strategy

Related


  • Growth depiction
    UK Channel Expects Big Growth in 2021, Cybersecurity a Big Driver
    Many partners view COVID-19 delays as one of the least important challenges they face.
  • Assessment
    CompTIA Rolls Out New Tech Vendor Assessment Tool
    Vendors may be overestimating their own channel readiness.
  • No Racism
    Racially Charged Tweet Costs Alteryx CRO His Job
    Numerous individuals, including a customer, criticized Alteryx for the tweet, which led to the CRO's resignation.
  • Select a Hire
    AvePoint Taps Ingram Micro, Palo Alto Networks Vet to Lead Channel
    He held channel exec roles at Ingram and Palo Alto Networks

Leave a comment Cancel reply

-or-

Log in with your Channel Futures account

Alternatively, post a comment by completing the form below:

Your email address will not be published. Required fields are marked *

Related Content

  • The Top IT Challenges Executives Will Face in 2021
  • The Smart Money’s on a Staged Approach to Security Services Provision
  • Xerox Financial Services Launches to Help Enterprise, SMB Customers
  • Protegrity Partners Get New Program with Added Training, Certification

Galleries

View all

Channel Partners Virtual 2021 Is the Hottest Ticket in Town

February 26, 2021

Industry Perspectives

View all

Backup Vulnerability: 4 Targets Hackers Might Utilize to Infiltrate Your Backup Solution

March 2, 2021

The “Roaring 20s” Are Coming

February 25, 2021

Three Ways MSPs Can Improve Supply Chain Security

February 24, 2021

Webinars

View all

A Partner’s Perspective on Channel Success in 2021

March 23, 2021

XDR and Why it Matters to MSPs

March 24, 2021

Top Security Trends Impacting Technology Security Providers In 2021

March 25, 2021

White Papers

View all

Why Fortinet for my MSSP?

March 2, 2021

Small and Mid-Size Business Security: 4 Steps to Success

March 2, 2021

How SMBs Can Secure Endpoints and Remote Workers for the Long Haul

March 2, 2021

Upcoming Events

View all

Channel Partners Virtual

March 2, 2021 - March 4, 2021

Channel Partners Conference & Expo

November 1, 2021 - November 4, 2021

Videos and Fastchats

View all

FASTCHAT: How SOAR Eliminates Security Challenges and Elevates Service Provider Revenues

January 6, 2021

Happy Holidays from Channel Partners & Channel Futures!

December 21, 2020

FASTCHAT: How Old, Unpatched Technologies Are Creating New Security Threats for MSPs and Their Customers

December 3, 2020

Twitter

ChannelFutures

#COVID19 is ramping up #socialengineering – time for MSSPs to step in. @Electric_AI dlvr.it/RtvRQc https://t.co/ebTJNJcOxz

March 3, 2021
ChannelFutures

.@pluribusnet launches expanded, simplified partner program. #SDN dlvr.it/RtvGtQ https://t.co/bRDqYLEhXJ

March 3, 2021
ChannelFutures

#SupplyChain agility is changing global distribution patterns and #ictservices, says @NeecoICT.… twitter.com/i/web/status/1…

March 3, 2021
ChannelFutures

.@Centrify, @Thycotic merging, creating potential challenge to PAM leader @CyberArk. #cybersecurity… twitter.com/i/web/status/1…

March 3, 2021
ChannelFutures

RT @Channel_Expo: Day 2 of #CPVirtual is live! 👏 In this preview, @Craig_Galbraith highlights some of the biggest sessions and activities y…

March 3, 2021
ChannelFutures

RT @ChannelEurope: Daniel Warelow of @GiacomCM & Kelvin Murray of @Webroot say companies must take comprehensive approach to address #malwa…

March 3, 2021
ChannelFutures

.@spectralogic updates #partnerprogram to reflect changes within the company. dlvr.it/Rtsmwl https://t.co/Gtt1mXLfve

March 3, 2021
ChannelFutures

.@Netrality launches expanded partner program. #datacenters dlvr.it/RtrKXt https://t.co/2qHhnqrF7g

March 3, 2021

MSSP Insider

Newsletters and Updates

Sign up for The Channel Report, Channel Futures Update, MSP 501 Newsletter and more.

Live Channel Events

Get the latest information on the next industry-leading Channel Partners event.

Channel Partners Online

Want more? Find more channel news and analysis on our sister site, Channel Partners.

Media Kit And Advertising

Want to reach our audience? Access our media kit

DISCOVER MORE FROM INFORMA TECH

  • Channel Partners Online
  • Channel Partners Events
  • MSP 501
  • MSSP Insider
  • IoT World Today
  • Webhostingtalk

WORKING WITH US

  • Contact
  • About us
  • Advertise
  • Newsletter

FOLLOW Channel Futures ON SOCIAL

  • Privacy
  • CCPA: “Do Not Sell My Data”
  • Cookie Policy
  • Terms
Copyright © 2021 Informa PLC. Informa PLC is registered in England and Wales with company number 8860726 whose registered and Head office is 5 Howick Place, London, SW1P 1WG.
This website uses cookies, including third party ones, to allow for analysis of how people use our website in order to improve your experience and our services. By continuing to use our website, you agree to the use of such cookies. Click here for more information on our Cookie Policy and Privacy Policy.
X