Orlando, Florida (US): In February, networking-gear maker Cisco Systems Inc. posted revenue growth for the first time in over two years, raising hopes of a turnaround in the fortunes of the firm. The San Jose-based company has faced stiff competition from new-age rivals such as Arista Networks, and has also been confronted with a declining market for high-priced networking hardware.
Under chief executive Chuck Robbins, who took over in 2015, the firm has pivoted to a new business model that has focused on generating more revenues from software subscriptions and services. Robbins spoke to reporters on the sidelines of the annual Cisco Live conference.
Edited excerpts:
How far along is Cisco on its turnaround journey? Is the worst over?
First, we are very pleased with our results and next quarter’s guidance is one of the highest growth quarters we’ve had in a while...
There were two major things that we needed to do when I became CEO. We needed to reignite innovation in our big core franchises. The other was to focus on a more predictable and a more software-oriented business model. We’ve made tremendous progress on both of those.
What has driven Cisco’s pivot towards software subscriptions? Is your transformation towards becoming a software-subscription company complete?
Let me say we’re completely committed and completely not finished. We have a long way to go and we’ve made a great deal of progress in the last three years...
We will continue to add more software content to our portfolio, but we will continue to build massive high-performance hardware, which our customers need... We will have a combination.
What is the road ahead for Cisco in India, after your leadership changes in the country over the past year?
I was there recently and the new leadership team is doing a great job. I am very happy with them.
You’ve spoken about the importance of your Smart Cities project in India, but it is yet to take off in India in a big way. How are you planning to change that?
When you look at projects like Smart Cities, sometimes the expectations of what you see from work going on in Smart Cities is disconnected from the reality of what they’re doing.
I think there’s a tremendous amount of work that is going on that is very positive. We’ll continue to remain very involved. India is still a huge potential market for us and it is very strategic for us.
There has been a lot of heated debate on the issue of net neutrality and the recent changes that have been made. Where does Cisco stand on this issue?
Net neutrality is an interesting dynamic….While I don’t think anybody should be able to throttle traffic for competitive differentiation, I think there are healthcare applications and other applications out there that would warrant prioritization and paid usage. If I’m receiving healthcare services from my physician who happens to be engaged with me on a video conference over the Internet, I would like that to be prioritised over my neighbour watching a cat video.
The writer was in Orlando at Cisco’s invitation.