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Cisco Systems, Inc.

Cisco Systems Logo
Type	Public
Traded as	NASDAQ: CSCO, SEHK: 4333 Dow Jones Component S&P 500 Component
Industry	Networking equipments
Founded	San Francisco, California, U.S. (1984)
Founder(s)	Len Bosack,Sandy Lerner
Headquarters	San Jose, California, U.S.[1]
Area served	Worldwide
Key people	John Chambers (Chairman & CEO)
Products	Networking Device Network Management Cisco IOS and NX-OS Software Interface and Module Optical networking Storage area networks Wireless, Telepresence, VOIP, Security Datacenter List of Cisco Products
Revenue	US$ 43.2 billion (2011)[2]
Operating income	US$ 7.67 billion (2011)[3]
Net income	US$ 6.49 billion (2011)[3]
Total assets	US$ 87.09 billion (2011)[3]
Total equity	US$ 47.25 billion (2011)[3]
Employees	71,825 (2012)[4]
Subsidiaries	List of acquisitions
Website	Cisco.com

Cisco Systems, Inc. (NASDAQ: CSCO) is an American multinational corporation headquartered in San Jose, California, United States,^[5] that designs, manufactures, and sells networking equipment. The stock was added to the Dow Jones Industrial Average on June 8, 2009, and is also included in the S&P 500 Index, the Russell 1000 Index, NASDAQ 100 Index and the Russell 1000 Growth Stock Index.^[6]

History[link]

One of the many buildings on the Cisco Systems campus in San Jose

1984–1995: early years[link]

Len Bosack and Sandy Lerner, a married couple who worked as computer operations staff members at Stanford University, later joined by Erich Drafahl, founded Cisco Systems in 1984. Lerner briefly moved on to direct computer services at Schlumberger, but returned full time to Cisco in 1987.^{[citation needed]} The name "Cisco" was derived from the city name, San Francisco, which is why the company's engineers insisted on using the lower case "cisco" in the early days. For Cisco's first product, Bosack adapted multiple-protocol router software originally written some years before by William Yeager, another Stanford employee who later joined Sun Microsystems. The company's first CEO was Bill Graves, who held the position from 1987 to 1988.^[7] In 1988, John Morgridge was appointed CEO.

On February 16, 1990, Cisco Systems went public (with a market capitalization of $224 million) and was listed on the Nasdaq stock exchange. On August 28, 1990, Lerner was fired; upon hearing the news, her husband Bosack resigned in protest. The couple walked away from Cisco with $170 million, 70% of which was committed to their own charity.^[8]

Although Cisco was not the first company to develop and sell dedicated network nodes,^[9] it was one of the first to sell commercially successful routers supporting multiple network protocols.^[10] Classical, CPU-based architecture of early Cisco devices coupled with flexibility of operating system IOS allowed for keeping up with evolving technology needs by means of frequent software upgrades. Some popular models of that time (such as Cisco 2500) managed to stay in production for almost a decade virtually unchanged - a rare sight in high-tech industry. Although Cisco was strongly rooted in the enterprise environment, the company was quick to capture the emerging service provider environment, entering SP market with new, high-capacity product lines such as Cisco 7000 and Cisco 7500.

Between 1992 and 1994, Cisco also acquired several companies in Ethernet switching, most notably Kalpana, Grand Junction and Crescendo Communications which together formed the Catalyst business unit. At the time, the company envisioned layer 3 routing and layer 2 (Ethernet, Token Ring) switching as complementary functions of different intelligence and architecture – the former was slow and complex, the latter was fast but simple. This philosophy dominated the company's product lines throughout 1990s.

In 1995, John Morgridge was succeeded by John Chambers.

1996–2005: Internet and silicon intelligence[link]

The phenomenal growth of the Internet in mid - to late 1990s quickly changed the telecom landscape. As the Internet Protocol (IP) became widely adopted, the importance of multi-protocol routing declined. Nevertheless, Cisco managed to catch the Internet wave, with products ranging from modem access shelves (AS5200) to core GSR routers that quickly became vital to Internet service providers and by 1998 gave Cisco de-facto monopoly in this critical segment.

In late March 2000, at the height of the dot-com boom, Cisco became the most valuable company in the world, with a market capitalization of more than US$500 billion.^[11][12] In November 2011, with a market cap of about US$94 billion,^[13] it is still one of the most valuable companies.^[14]

Meanwhile, the growth of Internet bandwidth requirements kept challenging traditional, software-based packet processing architectures.

The perceived complexity of programming routing functions in silicon, led to formation of several startups determined to find new ways to process IP and MPLS packets entirely in hardware and blur boundaries between routing and switching. One of them, Juniper Networks, shipped their first product in 1999 and by 2000 chipped away about 30% from Cisco SP Market share. Cisco answered the challenge with homegrown ASICs and fast processing cards for GSR routers and Catalyst 6500 switches. In 2004, Cisco also started migration to new high-end hardware CRS-1 and software architecture IOS-XR.

2006–current: The Human Network[link]

As part of a massive rebranding campaign in 2006, Cisco Systems adopted the shortened name "Cisco" and created "The Human Network" advertising campaign. These efforts were meant to make Cisco a "household" brand – a strategy designed to support the low-end Linksys products and future consumer products (such as Flip Video camera acquired by Cisco in 2009).

On the more traditional business side, Cisco continued to develop its extensive enterprise-focused routing, switching and security portfolio. Quickly growing importance of Ethernet also influenced the company's product lines, prompting the company to morph the successful Catalyst 6500 Ethernet switch into all-purpose Cisco 7600 routing platform.^[15] However, limits of IOS and aging Crescendo architecture also forced Cisco to look at merchant silicon in the carrier Ethernet segment. This resulted in a new ASR9000 product family intended to consolidate company's carrier ethernet and subscriber management business around EZChip-based hardware and IOS-XR. Cisco also expanded into new markets by acquisition - one example being a 2009 purchase of mobile specialist Starent Networks that resulted in ASR5000 product line.

Throughout mid-2000s Cisco also built a significant presence in India. establishing its Globalization Centre East in Bangalore for $1 billion planning that 20% of Cisco's leaders would be based there.^[16]

However Cisco continued to be challenged by both domestic Alcatel-Lucent, Juniper Networks and overseas competitors Huawei. Due to lower than expected profit in 2011, Cisco was forced to reduce annual expenses by $1 billion. The company cut around 3,000 employees with an early-retirement program who accepted buyout and planned to eliminate as many as 10,000 jobs (around 14 percent of the 73,400 total employees before curtailment).^[17][18] During the 2011 analyst call, Cisco's CEO John Chambers called out several competitors by name,^[19] including Juniper and HP.

Media and awards[link]

Cisco products, most notably IP phones and Telepresence, are frequently sighted in movies and TV series.^[20] The company itself and its history was featured in the documentary film Something Ventured which premiered in 2011.

Cisco was a 2002–03 recipient of the Ron Brown Award,^[21][22] a U.S. presidential honor to recognize companies "for the exemplary quality of their relationships with employees and communities". Cisco commonly stays on top of Fortune "100 Best Companies to work for", with position No. 20 in 2011^[23]

Acquisitions[link]

Cisco acquired a variety of companies to spin products and talent into the company. In 1995–1996 the company completed 11 acquisitions.^[24] Several acquisitions, such as Stratacom, were the biggest deals in the industry when they occurred. During the Internet boom in 1999, the company acquired Cerent Corporation, a start-up company located in Petaluma, California, for about US$7 billion. It was the most expensive acquisition made by Cisco to date, and only the acquisition of Scientific Atlanta has been larger. Several acquired companies have grown into $1Bn+ business units for Cisco, including LAN switching, Enterprise Voice over Internet Protocol (VOIP) platform Webex, and home networking. The latter came as result of Cisco acquiring Linksys in 2003 and in 2010 was supplemented with new product line dubbed Cisco Valet. Cisco announced on March 15, 2012 that it is acquiring NDS Group for a $5B.^[25] This transaction is expected to complete in 4–6 months.

In the recent merger deals, Cisco bought Starent Networks (a mobile technology company) and Moto Development Group, a product design consulting firm that helped develop Cisco's Flip video camera.^[26] Also in 2010, Cisco became a key stakeholder in e-Skills Week. In March 2011, Cisco completed the acquisition of privately held network configuration and change management solutions company Pari Networks.^[27]

Although many buy-ins (such as Crescendo Networks in 1993, Tandberg in 2010) resulted in acquisition of flagship technology to Cisco, many others have failed – partially or completely. For instance, in 2010 Cisco occupied a meaningful share of the packet-optical market,^[28] revenues were still not on par with US$7 billion price tag paid in 1999 for Cerent. Some of acquired technologies (such as Flip from Pure Digital) saw their product lines terminated.^[29]

Products and services[link]

Cisco's current portfolio of products and services is focused upon three market segments – Enterprise and Service Provider, Small Business and the Home. The solutions for each market are segmented into Architectures, which form the basis for how Cisco approaches each market.

• Corporate market: Enterprise networking and Service Providers

• Borderless networks: for their range of routers, switches, wireless systems, security systems, WAN acceleration, energy and building management systems and media aware networks.^[30]
• Collaboration: IP video and phones, TelePresence, HealthPresence, Unified Communications, Call Center systems, Enterprise social networks and Mobile applications^[31]
• Datacenter and Virtualization: Unified Computing, Unified Fabric, Data Centre Switching, Storage Networking and Cloud services.^[32]
• IP NGN (Next Generation Networks): High-end routing and switching for fixed and mobile service provider networks, broadcast video contribution/distribution, entitlement and content delivery systems.^[33]

• Small businesses^[34]

• Routers and switches (including those for networks of smart meters)^[35]
• Security and surveillance: IP cameras, data and network security solutions, etc.^[36]
• Voice and conferencing solutions: VOIP phones and gateway-systems, WebEx, video conferencing
• Wireless: WiFi Access points
• Network storage systems

• Home user^[37]

• Linksys product line of access points, switches, etc.
• Broadband: cable modems

With the acquisition of Pure Digital Technologies, Cisco began to sell a line of video recording devices called "Flip Video" that had been Pure Digital's only line of products. This line of products was not as popular as Cisco had thought it would have been, and on April 12, 2011, Cisco announced they were discontinuing all Flip camera production.^[38][39] Cisco ūmi product line – video conferencing for home also proved to be a short-lived bid for consumer multimedia market and did survive in Cisco product lineup.^[40]

Hardware[link]

A Cisco ASM/2-32EM router deployed at CERN in 1987.

A Cisco 7960G IP Phone.

Cisco UCS blade servers

Data

• Datacenter products: Nexus Switches (1000v, 2000, 4000, 5000, 7000), MDS, Unified Computing System (UCS)
• Routers, including: 837, 1000 Series, 2500 Series, 7600, 12000, 3600 Series, ASR Series and CRS-1 and CRS-3
• Security appliances: ASA 5500, PIX 500 series, Cisco Security Manager
• Catalyst switches: 1900 Series, 2900 / 2950 / 2960 / 3500XL Series (Layer 2 Switches), 3550 / 3750 Series (Layer 3 Switches), 3000 Series, Catalyst 4500, 5000/5500 Series, 6500 Series
• Teleworker/Remote Connectivity - Cisco LAN2LAN Personal Office for ISDN, VPN 3000 Concentrators
• Cisco Wireless LAN products - Access Points, PCI/PCMCIA/USB Wireless LAN Adaptors, Wireless LAN Controllers (WLC), Wireless LAN Solutions Engines (WLSE), Wireless Control System (WCS), Location Appliances, Long range antennas.

Telephony Products

• Collaboration Systems - Cisco TelePresence, (Cisco Manufacturing Mobile Video Collaboration with Librestream, Cisco acquired Tandberg, the world leader in Telepresence systems^[41])
• IP Telephony (VoIP) Servers and Appliances
• Cisco Unified IP Phones - Wireless IP Phone 7920, 7945, 7965, 7942, 8900 series, 9900 series, 6900 series

Servers / Application Appliances

• Cisco Wide Area Application Services (WAAS)
• Unified Computing: Cisco Unified Computing System (UCS) virtual server platform: with VMWare virtualization system run servers on Cisco hardware^[42]
• Cisco Application Control Engine (ACE): Application Delivery Controller

Experimental

• CLEO (Cisco Low Earth Orbit router)
• IRIS (Cisco Internet Routing in Space)

Other Products

• Cisco Cius: a new Android-based collaboration tablet
• Set Top Boxes (High Definition PVRs)- Cable/IP
• Flip pocket camera (Discontinued in April 2011^[43])

Software[link]

Operating Systems

• Internetwork Operating System (IOS)
• CatOS - Catalyst Switch Operating System
• NX-OS - Nexus Operating System
• IOS-XR

VPN/Remote Connectivity

• Cisco AnyConnect Secure Mobility Client
• Cisco Systems VPN Client
• Clean Access Agent, Cisco NAC Appliance

Telephony/VoIP

• Cisco Call Manager / Call Manager Express
• Cisco Unified Communications Manager
• Cisco Unified Operations Manager (CUOM) – is a NMS for voice. It features real-time monitoring of all system elements, and performs automatic discovery for the entire system and provides contextual diagnostics for troubleshooting.
• Cisco IP Communicator
• WebEx Collaboration Tools

Other

• Cisco Active Network Abstraction
• Cisco Fabric Manager
• Data Center Management and Automation – Cisco Intelligent Automation
• Cisco Tidal Enterprise Scheduler
• CiscoView
• CiscoWorks Network Management software
• Cisco Eos
• Packet Tracer, didactic network simulator
• Cisco Network Magic Pro
• Cisco Quad
• Cisco Security Manager
• Cisco SDM

VoIP services[link]

Cisco became a major provider of Voice over IP to enterprises, and is now moving into the home user market through its acquisitions of Scientific Atlanta and Linksys. Scientific Atlanta provides VoIP equipment to cable service providers such as Time Warner, Cablevision, Rogers Communications, UPC, and others; Linksys has partnered with companies such as Skype and Yahoo! to integrate consumer VoIP services with wireless and cordless phones.

Hosted Collaboration Solution[link]

Cisco partners can now offer cloud-based services based on Cisco's virtualized Unified Computing System (UCS). A part of the Cisco Unified Services Delivery Solution, it will include hosted versions of Cisco Unified Communications Manager (UCM), Cisco Unified Contact Center, Cisco Unified Mobility, Cisco Unified Presence, Cisco Unity Connection (unified messaging), and Cisco Webex Meeting Center.^[44]

Network Emergency Response[link]

The company maintains several Network Emergency Response Vehicles (NERV)s which are staffed by Cisco employees during natural disasters and other public crises. The vehicles are self contained and provide wired and wireless services including voice and radio interoperability, voice over IP, network based video surveillance and secured high definition video conferencing for leaders and first responders in crisis areas with up to 5 Mbit/s of bandwidth via a 1.8-meter satellite antenna. NERVs are normally stored at Cisco facilities in San Jose, California and Research Triangle Park, North Carolina for strategic deployment in North America and are capable of being fully operational within 15 minutes of arrival, running for 72 hours continuously.^[45][46] The NERV has been deployed to incidents such as the October 2007 California wildfires; hurricanes Gustav, Ike, and Katrina; the 2010 San Bruno gas pipeline explosion; and tornado outbreaks in North Carolina and Alabama in 2011.^[47] In 2011, Cisco received the Innovation Preparedness award from the American Red Cross, Silicon Valley Chapter for its development and use of these vehicles in disasters.^[48]

Cisco Career Certifications[link]

Cisco Systems also sponsors a line of IT Professional certifications for Cisco products.^[49] There are five levels of certification: Entry (CCENT), Associate (CCNA / CCDA), Professional (CCNP / CCDP)), Expert (CCIE / CCDE), and recently Architect, as well as eight different paths, Routing & Switching, Design, Network Security, Service Provider, Service Provider Operations, Storage Networking, Voice, and Wireless.

A number of specialist technician, sales and datacenter certifications are also available.

Cisco also provides training for these certifications via a portal called the Cisco Networking Academy. Qualifying schools can become members of the Cisco Networking Academy and then provide CCNA level or other level courses. Cisco Academy Instructors must be CCNA certified to be a CCAI certified instructor.

Criticisms and controversy[link]

Shareholder relations[link]

A class action lawsuit filed on April 20, 2001 accused Cisco of making misleading statements that "were relied on by purchasers of Cisco stock" and of insider trading.^[50] While Cisco denied all allegations in the suit, on August 18, 2006, Cisco's liability insurers, its directors, and officers paid the plaintiffs US$91.75 million to settle the suit.^[51]

Intellectual property disputes[link]

On December 11, 2008, the Free Software Foundation filed suit against Cisco regarding Cisco's failure to comply with the GPL and LGPL license models and make the applicable source code publicly available.^[52] On May 20, 2009, Cisco settled this lawsuit by complying with FSF licensing terms and making a monetary contribution to the FSF.^[53]

Censorship in China[link]

Cisco has been criticized for its involvement in censorship in the People's Republic of China.^[54] According to author Ethan Gutmann, Cisco and other telecommunications equipment providers supplied the Chinese government with surveillance and Internet infrastructure equipment that is used to block Internet websites and track Chinese on-line activities. Cisco says that it does not customize or develop specialized or unique filtering capabilities to enable governments to block access to information and that it sells the same equipment in China as it sells worldwide.^[55]

Wired News had uncovered a leaked, confidential Cisco power point presentation that details the commercial opportunities of the Golden Shield Project of Internet control.^[56] In her article, journalist Sarah Stirland accuses Cisco of marketing its technology "specifically as a tool of repression."

Tax fraud investigation[link]

On October 16, 2007, the Brazilian Federal Police and Brazilian Receita Federal (equivalent to the American IRS) under the "Persona Operation" uncovered an alleged tax fraud scheme employed by Cisco Systems since 2002 that exempted the company from paying over R$1.5 billion (US$824 million) in taxes.^[57][58]

Product support[link]

Some basic bug fix software updates require a very expensive support contract, which is difficult to buy for used hardware.

Antitrust lawsuit[link]

On December 1, 2008, Multiven filed an antitrust lawsuit^{[59][60][61][62][63][64]} against Cisco Systems, Inc. in an effort to open up the network maintenance services marketplace for Cisco equipment, promote competition and ensure consumer choice and value. Multiven's complaint alleges that Cisco harmed Multiven and consumers by bundling and tying bug fixes/patches and updates for its operating system software to its maintenance services (SMARTnet) and through a series of other illegal exclusionary and anticompetitive acts designed to maintain Cisco's alleged monopoly in the network maintenance services market for Cisco networking equipment. Cisco responded by accusing the person who filed the anti-trust suit, British born Peter Alfred-Adekeye, with hacking and pressured the US government to extradite him from Canada where he was giving evidence against Cisco in an anti-trust hearing. Canadian Judge Ronald McKinnon, who oversaw the extradition hearing, stated the real reason for the extradition proceedings was because Alfred-Adekeye "dared to take on a multinational giant." He also condemned the US prosecutor for hiding the fact that Alfred-Adekeye was in legal proceedings against Cisco Systems, for stating that Alfred-Adekeye had left the USA in a time period when he had not and a formal request for extradition was not filed against Alfred-Adekeye when he was taken into custody. Judge McKinnon described the information provided by Cisco and the US prosecutor as "full of innuendo, half-truths and falsehoods" adding "This speaks volumes for Cisco's duplicity" and accused them of "unmitigated gall" in using such a heavy-handed move as an unsupportable arrest and jailing to pressure Alfred-Adekeye to drop or settle his civil antitrust complaint.^[65]

Intimidation[link]

Cisco has been reported as using intimidation tactics in several news reports.^[66][67]

See also[link]

	San Francisco Bay Area portal
	Companies portal

• List of information technology acronyms
• WAVE2M

Notes[link]

Further reading[link]

External links[link]

Wikimedia Commons has media related to: Cisco

• Official website (Mobile)
• Cisco Networking Academy – Armenia
• Interview with former CEO, John Morgridge, by Stanford students of iinnovate
• Cisco Systems vs. Juniper Networks
• AKS-Innovations team ~ Find out more about Cisco I−Prize, the contest which was the main reason to build the AKS-team and start generating ideas
• VoIP for business Cisco (Videos)

Business data

• Cisco Systems at Google Finance
• Cisco Systems at Yahoo! Finance
• Cisco Systems at Hoover's
• Cisco Systems at Reuters
• Cisco Systems SEC filings at EDGAR Online
• Cisco Systems SEC filings at the Securities and Exchange Commission

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