Cisco 17.06.03

[Glauco Schlembach]

CiscoSystems, Inc. (using the trademark Cisco) is an American multinational digital communications technology conglomerate corporation headquartered in San Jose, California. Cisco develops, manufactures, and sells networking hardware, software, telecommunications equipment and other high-technology services and products.[3] Cisco specializes in specific tech markets, such as the Internet of things (IoT), domain security, videoconferencing, and energy management with products including Webex, OpenDNS, Jabber, Duo Security, Silicon One, and Jasper.

Cisco Systems was founded in December 1984 by Leonard Bosack and Sandy Lerner, two Stanford University computer scientists who had been instrumental in connecting computers at Stanford. They pioneered the concept of a local area network (LAN) being used to connect distant computers over a multiprotocol router system. The company went public in 1990 and, by the end of the dot-com bubble in the year 2000, had a market capitalization of $500 billion, surpassing Microsoft as the world's most valuable company.[4][5]

Cisco Systems was founded in December 1984 by Sandy Lerner along with her husband Leonard Bosack. Lerner was the director of computer facilities for the Stanford University Graduate School of Business. Bosack was in charge of the Stanford University computer science department's computers.[8]

Cisco's initial product has roots in Stanford University's campus technology. In the early 1980s students and staff at Stanford, including Bosack, used technology on the campus to link all of the school's computer systems to talk to one another, creating a box that functioned as a multiprotocol router called the "Blue Box".[9] The Blue Box used circuitry made by Andy Bechtolsheim, and software that was originally written at Stanford by research engineer William Yeager.[9] Due to the underlying architecture, and its ability to scale well, Yeager's well-designed invention became a key to Cisco's early success.[10]

In 1985, Bosack and Stanford employee Kirk Lougheed began a project to formally network Stanford's campus.[9] They adapted Yeager's software into what became the foundation for Cisco IOS, despite Yeager's claims that he had been denied permission to sell the Blue Box commercially. On July 11, 1986, Bosack and Lougheed were forced to resign from Stanford and the university contemplated filing criminal complaints against Cisco and its founders for the theft of its software, hardware designs, and other intellectual properties.[9] In 1987, Stanford licensed the router software and two computer boards to Cisco.[9] In addition to Bosack, Lerner, Lougheed, Greg Satz (a programmer), and Richard Troiano (who handled sales), completed the early Cisco team.[9] The company's first CEO was Bill Graves, who held the position from 1987 to 1988.[11] In 1988, John Morgridge was appointed CEO.[12]

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 its early years.[13] The logo is intended to depict the two towers of the Golden Gate Bridge.[14]

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.[15]

Although Cisco was not the first company to develop and sell dedicated network nodes,[16] it was one of the first to sell commercially successful routers supporting multiple network protocols.[17] 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. The company was quick to capture the emerging service provider environment, entering the SP market with product lines such as Cisco 7000 and Cisco 8500.[18]

The Internet Protocol (IP) became widely adopted in the mid-to-late 1990s.[23] Cisco introduced products ranging from modem access shelves (AS5200) to core GSR routers, making them a major player in the market.[23] In late March 2000, at the height of the dot-com bubble, Cisco became the most valuable company in the world, with a market capitalization of more than $500 billion.[4][24] As of July 2014, with a market cap of about US$129 billion,[25] it was still one of the most valuable companies.[26]

The perceived complexity of programming routing functions in silicon led to the 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. In response, Cisco later developed homegrown ASICs and fast processing cards for GSR routers and Catalyst 6500 switches. In 2004, Cisco also started the migration to new high-end hardware CRS-1 and software architecture IOS XR.[27]

On the more traditional business side, Cisco continued to develop its routing, switching and security portfolio. The quickly growing importance of Ethernet also influenced the company's product lines. 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 ASR 9000 product family intended to consolidate the company's carrier Ethernet and subscriber management business around EZChip-based hardware and IOS-XR.[18]

Cisco continued to be challenged by both domestic competitors Alcatel-Lucent, Juniper Networks, and an overseas competitor Huawei. Due to lower-than-expected profit in 2011, Cisco reduced annual expenses by $1 billion. The company cut around 3,000 employees with an early-retirement program who accepted a buyout and planned to eliminate as many as 10,000 jobs (around 14 percent of the 73,400 total employees before curtailment).[32][33] During the 2011 analyst call, Cisco's CEO John Chambers called out several competitors by name,[34] including Juniper and HP.

On July 24, 2012, Cisco received approval from the EU to acquire NDS (a TV software developer) for US$5 billion.[35] In 2013, Cisco sold its Linksys home-router unit to Belkin International Inc., signaling a shift to sales to businesses rather than consumers.[36]

On July 23, 2013, Cisco Systems announced a definitive agreement to acquire Sourcefire for $2.7 billion.[37] On August 14, 2013, Cisco Systems announced it would cut 4,000 jobs from its workforce, which was roughly 6%, starting in 2014.[38] At the end of 2013, Cisco announced poor revenue due to depressed sales in emerging markets, caused by economic uncertainty and by fears of the National Security Agency planting backdoors in its products.[39]

In April 2014, Cisco announced funding for early-stage firms to focus on the Internet of Things. The investment fund was allocated to investments in IoT accelerators and startups such as The Alchemist Accelerator, Ayla Networks and EVRYTHNG.[40] Later that year, the company announced it was laying off another 6,000 workers or 8% of its global workforce, as part of a second restructuring.[41] On November 4, 2014, Cisco announced an investment in Stratoscale.[42]

On May 4, 2015, Cisco announced CEO and Chairman John Chambers would step down as CEO on July 26, 2015, but remain chairman. Chuck Robbins, senior vice president of worldwide sales & operations and 17-year Cisco veteran, was announced as the next CEO.[43] On July 23, 2015, Cisco announced the divestiture of its television set-top-box and cable modem business to Technicolor SA for $600 million,[44] a division originally formed by Cisco's $6.9 billion purchase of Scientific Atlanta. The deal came as part of Cisco's gradual exit from the consumer market, and as part of an effort by Cisco's new leadership to focus on cloud-based products in enterprise segments. Cisco indicated that it would still collaborate with Technicolor on video products.[45] On November 19, 2015, Cisco, alongside ARM Holdings, Dell, Intel, Microsoft and Princeton University, founded the OpenFog Consortium, to promote interests and development in fog computing.[46]

In January 2016, Cisco invested in VeloCloud, a software-defined WAN (SD-WAN) start-up with a cloud offering for configuring and optimizing branch office networks. Cisco contributed to VeloCloud's $27 million Series C round, led by March Capital Partners.[47]

In February 2017, Cisco launched a cloud-based secure internet gateway, called Cisco Umbrella, to provide safe internet access to users who do not use their corporate networks or VPNs to connect to remote data centers.[48] Immediately after reporting their fourth-quarter earnings for 2017, Cisco's price-per-share value jumped by over 7%, while its earnings per share ratio increased from 60 to 61 cents per share, due in part to Cisco's outperformance of analyst expectations.[49] In September 2017, Chambers announced that he would step down from the executive chairman role at the end of his term on the board in December 2017.[50] On December 11, 2017, Robbins was elected to succeed Chambers as executive chairman while retaining his role as CEO, and Chambers was given the title of "Chairman Emeritus".[51][52]

Reuters reported that "Cisco Systems Inc's (CSCO.O) product revenue in Russia grew 20 percent in 2017, ahead of Cisco's technology product revenue growth in the other so-called BRIC countries of Brazil, China and India."[53][54]

On May 1, 2018, Cisco Systems agreed to buy AI-driven business intelligence startup Accompany for $270 million.[55][56] As of June 2018, Cisco Systems ranked 444th on Forbes Global 2000 list, with $221.3 billion market cap.[57]

In 2019, Cisco also introduced the "Silicon One" ASIC chip with the G100 model reaching a speed of 25.6 Tbit/s.[61] The Silicon One competes against the Tomahawk series by Broadcom the Nvidia Spectrum, the Marvell Teralynx and the Intel Tofino.[62] In 2023, the Silicon One G200 will offer a speed of 51.2 Tbit/sec.[63]

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