Cisco's mid-term growth strategy betting on IT software, security

Cisco's mid-term growth strategy betting on IT software, security

Summary: Cisco's John Chambers is expected to announce a new vision for the company as the world goes more mobile.

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Cisco CEO John Chambers was expected to reveal expansion plans and a mid-term growth strategy during the networking giant's annual analyst day in New York City on Friday.

According to Bloomberg, Chambers "affirmed the company’s long-term revenue growth target of 5 percent to 7 percent as he expands software and services offerings."

Reuters added that within five years, "Cisco plans to double revenue from software, which is currently at $6 billion," and that this "growth will be mostly organic but will include some acquisitions."

In an interview with The New York Times this week, Chambers explained that these plans are supposed to take "Cisco from simply making the boxes through which most of the Internet’s traffic zips, to being a company that designs and sells software and services for a world of pervasive information technology."

Remarking that the IT solutions segment is a "$4 trillion market," Chambers also told the NYT that Cisco has also been trying to make progress in this area through acquisitions of "companies that rely on high-profit-margin software."

Cisco, the chairman and chief executive says, will shift toward customers in government and large businesses, handling projects like designing and managing systems for efficient traffic and clean water across entire cities. Cisco’s plan is to create networks of sensors and data analysis systems, working closely with government officials and civil engineering companies. And it will work with companies to set up efficient mining, manufacturing and distribution systems.

The determination to reposition Cisco as the potential global leader in IT services is evidently part of the legacy that Chambers wants to leave behind.

Don't forget that Chambers already revealed a list of potential successors to his post in an interview with Bloomberg back in September. He also admitted to Bloomberg that his retirement could come as soon as within two to four years

Topics: Cisco, Enterprise Software, IT Priorities, Networking, Security

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