Cisco Systems, Inc. - Special Call - NasdaqGS:CSCO

NasdaqGS:CSCO

Surya Panditi discussed several key points during the Cisco Systems, Inc. special call:

1. Introduction and Customer Focus:

   • Surya highlighted that Cisco partners with service providers to help them lower capital expenditure (CapEx) and operational expenditure (OpEx), focusing on optimization.
   • He mentioned the need for new business models due to the influx of devices into homes and workplaces (Bring Your Own Device).
   • He emphasized the importance of monetizing network investments through the creation and deployment of new services.

2. Customer Expectations:

   • Surya noted that customers expect scale, simplification, and innovation from the network.
   • Scale refers to the ability to handle large numbers of subscribers, bandwidth, and end devices.
   • Simplification involves easier management and rapid provisioning of new services.
   • Innovation includes leveraging network intelligence to enhance user experience.

3. Network Traffic Trends:

   • He discussed the shift from north-south to east-west traffic patterns, driven by the proliferation of data centers and the need for content replication.
   • He highlighted the importance of 100 gig technology as a common denominator for both transport and routing.

4. Core Network Leadership:

   • Surya mentioned Cisco’s market leadership in the core network, driven by innovation and the ability to maintain market share.
   • He noted that Cisco was the first to market with 100 GigE interfaces and is now taking orders for 100 gig WDM technology.
   • He mentioned the successful acquisition of CoreOptics, which brought a strong team and technology.

5. Edge Network Dominance:

   • Surya stated that the ASR 9000 is the #1 market share leader on the edge with nearly 50% market share.
   • He highlighted the platform’s scalability and its ability to support 400 GigE interfaces.
   • He mentioned over 1,000 customers worldwide for this platform.

6. Data Center Market Share:

   • Surya noted that Cisco holds the #1 market share in the SP network infrastructure at about 47.5%.
   • He mentioned the industry’s first 100 GigE for data center applications and over 7,500 customers, including both service providers and enterprises.

7. Mobility Solutions:

   • Surya discussed Cisco’s presence in the mobile backhaul market with over 42% market share.
   • He mentioned the packet core product resulting from the Starent acquisition, which has a 28% market share.
   • He highlighted Cisco’s ability to support multiple technologies (2G, 3G, 4G) and the breadth of capabilities offered.

8. Wi-Fi and Multi-Access Technologies:

   • Surya noted Cisco’s strong enterprise Wi-Fi solution and its extension into the service provider space.
   • He emphasized the importance of a common architecture for multiple access technologies to improve user experience.

9. LTE Wins:

   • Surya mentioned over 30 wins in LTE deployments, announced at the Mobile World Congress.

10. 100 Gig Technology Leadership:

    • Surya discussed the importance of 100 gig technology across different segments of the network.
    • He highlighted Cisco’s competitive advantage with 100 gig technology in core, edge, and data center segments.

11. Optical Technology and Acquisitions:

    • Surya mentioned the CoreOptics acquisition and its role in addressing capacity exhaustion problems.
    • He highlighted the advanced DSP technologies and the lowest total cost of ownership achieved through the acquisition.
    • He mentioned the Lightwire acquisition and its focus on low-footprint, low-power, and low-cost interconnect solutions.

12. IP and Optical Convergence Benefits:

    • Surya discussed the benefits of integrating IP and optical technologies, including optimized provisioning, simplified networks, and lower costs.
    • He explained the concept of A-to-Z provisioning and the rapid deployment of services.

13. Network Virtualization Technology (nV):

    • Surya explained how nV technology simplifies operations by treating remote sites as line cards within the ASR 9000 chassis.
    • He highlighted the resiliency provided by nV technology, allowing two routing chassis to behave as one device.

14. Innovation and Customer Success:

    • Surya emphasized Cisco’s global customer base and the success of its solutions across various market segments.

15. Q&A Session:

    • Surya addressed questions related to market share improvements, competition, content delivery networks, mobile routing technology, 100 gig adoption, optical market entry, mobile packet core offerings, MPLS switching, deep packet inspection functionalities, and market growth drivers.

Surya Panditi’s comments provide insights into Cisco’s strategy, technology leadership, and market positioning in the service provider routing and optical markets.

Marilyn Mora made the following comments during the Cisco Systems, Inc. special call:

1. Introduction:

   • Greeted everyone and welcomed them to Cisco's conference call focused on their service provider routing business.
   • Thanked everyone for joining the call.

2. Presentation Format:

   • Announced that the call would focus specifically on Cisco's service provider routing and optical strategy.
   • Explained the format of the call, which would include a 20- to 25-minute presentation followed by an opportunity for Q&A.

3. Speaker Introductions:

   • Introduced Surya Panditi as the Senior Vice President and General Manager of Cisco's service provider business.
   • Welcomed Surya Panditi and handed over to him for his presentation.
   • Introduced Suraj Shetty as the Vice President of Worldwide Service Provider Marketing.
   • Welcomed Suraj Shetty and handed over to him after Suraj's introduction.

4. Call Scope Reminder:

   • Reminded the audience that the call would strictly pertain to Cisco's service provider routing and optical strategy.
   • Noted that no new financial information regarding Cisco's overall performance was intended or implied.

5. Forward-Looking Statements Caution:

   • Mentioned that forward-looking statements regarding the service provider business were subject to risks and uncertainties.
   • Referenced the SEC filings, specifically the most recent report on Form 10-K and 10-Q, for detailed risk factors.
   • Noted that actual results may differ from statements made during the call.

6. Transition to Suraj Shetty:

   • Handed over to Suraj Shetty to begin the presentation.

7. Q&A Session Introduction:

   • Announced the opening of the floor for questions.
   • Explained the process for submitting questions electronically via the chat box.

8. Q&A Session Moderation:

   • Read and moderated questions submitted by investors and analysts.
   • Passed questions to Surya Panditi and Suraj Shetty for responses.

9. Conclusion:

   • Thanked Surya and Suraj for sharing their insights.

   • Invited participants to contact the Investor Relations team for any follow-up questions.

   • Expressed gratitude for the participation and support.

   • Concluded the call.

Suraj Shetty, Vice President of Worldwide Service Provider Marketing at Cisco, made several key points during the special call:

1. Introduction:

   • Gave a brief introduction about his role and tenure at Cisco.

2. Impact of New Devices on Network Traffic:

   • Highlighted the impact of new devices, particularly the new iPad with retina display, on network traffic.
   • Noted that the new iPad can consume video streams at approximately 2 megabits per second, which is three times higher than the previous model.
   • Emphasized that the cycle of new devices requiring more bandwidth will continue to accelerate, driving the need for more bandwidth and more devices.

3. Visual Networking Index and Network Traffic Growth:

   • Mentioned the Visual Networking Index (VNI) that Cisco tracks to monitor the massive changes in the marketplace driven by tablets and smartphones.
   • Predicted a 299% growth in data traffic over the next five years, reaching a zettabyte of data.
   • Stressed that 90% of traffic will be video, and most services will come from the cloud.

4. Changes in Network Infrastructure:

   • Described how the network infrastructure has evolved over the past decade, from simple web browsing to the proliferation of data centers and increased reliance on optical connections.
   • Noted the shift in traffic patterns from predominantly north-south to also east-west, indicating the replication of content between data centers and users.

5. Integration of IP and Optical Technologies:

   • Addressed common misconceptions about the need for routing when traffic is moving directly from point A to point B.
   • Explained how the proliferation of applications in the cloud affects traffic paths, making them more unpredictable.
   • Highlighted the importance of integrating IP and optical technologies, noting Cisco’s strong position in both areas.

6. The Three Key Components: Cloud, Network, and Client:

   • Simplified the network landscape into three components: cloud, network, and client.
   • Asserted Cisco’s strong positioning in each of these areas.

7. Question and Answer Session:

   • Addressed questions about Cisco’s competitive position, including its approach to content delivery networks (CDNs), the capabilities of the ASR 9000, and the integration of IP and optical technologies.
   • Discussed the importance of innovation, such as the network positioning system in Cisco’s Carrier Routing System and ASR 9000, which enables efficient content distribution.

8. Follow-Up Questions:

   • Answered follow-up questions on topics such as the capabilities of the ASR 9000, the benefits of network virtualization technology, and Cisco’s approach to integrating optical technologies.

Throughout the call, Suraj emphasized the importance of innovation, customer-centric solutions, and the integration of various technologies to meet the evolving needs of service providers.