Cisco CEO Chuck Robbins was all smiles during CNBC’s ‘Squawk on the Street’ this week reassuring investors that, “the consistency we saw in the quarter from beginning to end is what gave us confidence” and his track record tells us that everything is under control.
Despite this, competitor forums leaped on to the apparent ‘fall from grace’ after a slight revenue decline in Q1 FY2021, quick to bemoan the enterprise tech giants’ less than typical performance – no shocks there then, but what are the experts saying?
JP Morgan reaffirmed Chuck’s outlook, summarising;
“A favourable outlook for Cisco‘s positioning in software capabilities, which we believe are well aligned to the transformation in the industry from primarily hardware to proprietary software, adding flexibility and agility to the network.”
Innovate or Die.
Chuck’s only just getting started… Despite global events disrupting traditional Cisco sales – the stock market reacted well. Why? Unsurprisingly because there is an abundance of trust in Cisco and unwavering belief in Robbins’ strategy.
For me, a CEO who is comparable to Microsoft‘s Satya Nadella and The Walt Disney Company‘s Executive Chairman, Bob Iger. Like them, Robbins is an exceptional individual, entrusted with the keys of an incredible and historically successful organisation. All three CEO’s have gone on to transform those same companies, whilst protecting their heritage, legacy, and loyal customer base.
(Note to the forums; Revenues will obviously take an initial hit as you transition from selling hardware worth billions of dollars into a subscription business, offering packages for less than $20 per month).
Strangely however, the revenue decline did surprise us here at Cisilion.
As one of the top performing partners in the UK & Ireland, our own Cisco–related business has more than doubled to +122% YoY in Q1 alone. Cisco commented recently:
“Cisco value partners like Cisilion who play a crucial role in our success as a company. Their recent YoY growth across Enterprise Networking, Collaboration and Software reaffirms how well they have performed as a Cisco Gold & Master Collaboration partner, aligning with our core strategy. Cisilion are recognised as one of Cisco UKIs most mature partners with their Managed Service portfolio, underpinned with our most innovative technologies.”
Our Cisco Collaboration business grew by 29% as we continued to leverage Cisco’s end-to-end capability across UC, meeting room solutions, and contact centre services. Bolstered by some great co-wins within Insurance, Legal, and Financial sectors, we are unequivocal that Cisco are still a great force within this space.
Expectedly, Cisilion’s Cisco Security number sky–rocketed to +422% in the same period, leveraging existing Cisco products to create value through Enterprise Agreements. With so much focus on secure remote working this year, we anticipated a big number in the aforementioned industries. But, as our public sector, charity, and luxury retail clients attest; Cisco is the safest of hands to back in this Zero-Trust world.
Additionally, Datacentre remained healthy with 13% growth, which was to be expected as customers get to grips with a multi-cloud environment and Cisco’s innovative position within that world.
Cisilion have helped Cisco to win a number of ‘Service Full Coverage‘ clients also. Their ‘Rolls-Royce’ service, offering greater predictability in operation and costs. Larger, cross-vertical organisations have been snapping this service up, as they look to mitigate risks, in spite of having smaller teams and heightened traffic.
Most notably for me, our Cisco Enterprise Networking sales DOUBLED.We attribute this to our ability to offer Enterprise Agreements for our customers whilst leveraging Cisco Capital which ensures that costs are flexible over a longer term. But still, doubling hardware is a phenomenal result for us during a period in time when it’s safe to say that most organisations aren’t updating their core infrastructure – or are they?
The smart ones are.
We discussed this on our CisilionLIVE podcast recently; how so many businesses scrambled to access the tools they needed for an instantaneous mass migration to WFH. With so many options for freeware available, coupled with legacy investments and budget cuts, it was easy for organisations to access point-tools that serviced the minimum requirements.
This all happened to a decent level of success, globally. Did Cisco’s customers rush out to buy new switches and firewalls? Clearly not as many as usual. But did those same customers look to reduce expenditure where possible? Yes, they absolutely did.
Of course, we supported that. We demonstrated how technology is not only a short-term necessity, but also a savvy long-term investment during the crisis to forward-thinking CIO/CEOs. These same clients trust Cisco, especially as they plan for the future.
Global insurance companies, law firms, banks, luxury brands, logistics, hospitals – you name it. Many industries have worked with Cisilion’s Cisco practice (throughout the many surprises 2020 threw at them) to plan and build for the future.
Cisco continues to solve more and more business challenges – most notably: secure innovation at scale in a post pandemic world. As Cisilion navigate the transformation space and engage with clients at the business level to tailor solutions to their visions, we see how Cisco’s revenue bounce-back is going to play out in the longer-term… Cloud-native, easy to consume, families of applications which are cost effective and relevant.
Cisco’s platform approach exhibits incredible value when executed as just that, a platform and that’s where clients are utilising Cisco to transform effortlessly. Cisco have also developed multiple Enterprise Agreement subscriptions so that businesses can consume their technologies and benefit from them securely, at scale. For me, these two constituents of Cisco’s strategy mark the cornerstone of their future success.
Following the upbeat numbers call, Barclays stated;
“..both tone and visibility has improved since last quarter and we believe CSCO has room to run in the post pandemic recovery”
Still not sure why there was negativity from competitors?
Neither are we. As the pandemic exploded into our lives, Cisco brought out free trial versions of its software to market, which likely resulted in a hit to their own run-costs. Moreover, Cisco focused on the global issue with a $225m donation to support COVID-19 efforts as well as pivoting to make masks and ventilator parts, plus kicking off a business resilience fund to support customers.
Kudos to Cisco! Another reason why we didn’t understand the drop in revenue (and no doubt additional reasons as to why Cisco’s shares performed so well).
It’s all coming together for Cisco
Harking back to Iger’s Disney, and much like the multi-billion dollar assimilations of LucasFilm, Marvel, 20th Century Fox and Pixar, Cisco’s recent acquisitions of SaaS leaders OpenDNS, Duo, AppDynamics, CloudLock, ThousandEyes etc. are all shaping Cisco’s own transformed offering.
These purchases are fundamentally different from Cisco’s Tandberg, Crescendo, and even Meraki purchases of days gone by. Aside from the latter all having hardware in their portfolio, Cisco have bought with the sole intention of integrating some insanely good subscription services – like the open cloud-native platform, SecureX and a revitalised Webex.
Concluding the Cisco and Disney parallelism, my prediction is this: before long, Cisco will have an equivalent ‘Disney+’ style offering, where clients can access Cisco’s best architectures in an easy-to-consume and flexible subscription model.
A nod to Cisco’s detractors; these strategic buys don’t come cheap.
Let’s face it, Cisco build great technology, and they ‘buy it in’ equally as well. Cisco under Robbins is becoming more streamlined, integrating technologies into the stack faster and with more powerful customer benefits than ever before.
It is not only Cisco’s end-to-end platforms which guarantee them future success – their resurgent ability to integrate seamlessly with established Cloud providers ensures that Cisco will stay relevant for the long–haul.
As independent transformation consultants, Cisilion share our passion for Cisco whilst partnering with their allies in this space. This independent perspective helps our clients successfully transform and enables us to provide managed services which give our Cisco clients a single throat to choke outside of their Cisco infrastructure. It’s another winning formula as our results attest.
We’re not always right.
Please forgive us. We thought that Cisco were selling tons of their products, because WE are. Cisilion work to create visions for our clients and, like Chuck, we understand that transformation takes time. We also understand the impact of Cisco’s major initiatives both pre- and post-pandemic, in which they gave back, supported businesses and took a stand against oppression in all its forms.
We might not have seen the revenue blip coming, but ultimately we understand that when the rest of the partner community catches onto the Cisilion approach, Cisco’s numbers will sky-rocket, and the business world will feel proud that they ‘stuck with Chuck’.
Last one for the critics; Come on guys, Chuck’s just getting started!!
Keen on hearing more about Cisilion and Cisco’s success story or how your business can innovate for the future with Cisco? You know where we are.