Cisco is seeking to meet their customers’ demands for a more sophisticated service that will allow them to manage more business workings through the internet. The company already controls more than 85% of the business networking hardware market. John Chambers, CEO and Chairman of the Board of Cisco Systems, is aware of what consumers desire from services and has planned on refocusing the company toward complex products and services for telecommunications firms, big businesses and government agencies.
The company has more than $46 billion available to fund such a move. The San Jose, California based company had net income of $3.14 billion in the second quarter, compared to $2.18 billion during the same period last year. Cisco’s revenue increased 5% to $12.8 billion in contrast to last year. Recently, the company reported earnings that grew 44%. This was more than Wall Street experts expected. The company’s increases were mainly due to sales growth in both Asia and the Americas.
Cisco Systems is steering their business legacy towards a larger future. Mr. Chambers said in an interview that the company has broken away from the traditional players. At one point, the company was considered the most valuable company in the world. Cisco’s new “The Internet of Everything” ad campaign highlights the company’s understanding of how the world needs to connect.
Erik Suppiger, a JMP securities analyst, mentioned how well the company maintained their margins and costs. However, some analyst have concerns with how the company will be able to build additional revenue in the future. Cisco will need to produce software and services that are distinct from its current hardware setup. Many see signs of progress and wonder if it will prevail before Mr. Chambers retires. The CEO has been leading the company for 18 years and has spoken about his retirement taking place in the next 2 to 4 years.