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pww.comCisco Systems, Inc. Presents at BofA Merrill Lynch 2017 Global Technology Conference, Jun-06-2017 07:45 AM - NasdaqGS:CSCO

NasdaqGS:CSCO

David Ulevitch [Former Senior VP & GM of Cisco Security Business] 💬

David Ulevitch, the Former Senior VP & GM of Cisco Security Business, discussed several aspects of Cisco's security strategy and market positioning during the BofA Merrill Lynch 2017 Global Technology Conference. Here’s a detailed summary of his comments:

Safe Harbor Statement

  • Forward-Looking Statements: David acknowledged that he might make forward-looking statements and directed attendees to Cisco's Investor Relations site or filings for accurate data.

Market Overview

  • Customer Priorities: Security remains the top priority for customers, frequently discussed in board meetings.
  • IT Landscape Changes: The IT landscape has evolved significantly, with remote work, personal devices, and cloud services becoming more prevalent.
  • Security Spending: Despite increased security spending, breaches and threats persist.
  • Cisco's Strategy: Focus on the network as a critical starting point for security and aim to be the system of record for visibility and enforcement.

Architectural Advantage

  • Portfolio Integration: Emphasized the importance of an architectural advantage, integrating security products for better automation and efficacy.
  • Automation and Efficacy: Leveraging automation to save customers money while enhancing security effectiveness.
  • Open Architecture: Open architecture enables integration with third-party products to enhance security.
  • End-to-End Security: Providing comprehensive security from endpoints to the network and cloud.

Addressing Challenges

  • Network Importance: Highlighted the critical role of the network in securing the growing number of devices.
  • Threat Intelligence: Developed a massive threat intelligence and research group called Talos.
  • Hybrid Environments: Addressed the need for security solutions that apply policy across on-premises data centers and public cloud environments.

Opportunities

  • Total Addressable Market (TAM): Noted the significant TAM for security, with Cisco aiming to expand its footprint in various segments.
  • Endpoint Business Growth: Focused on growing the endpoint business to drive better automation and efficacy.
  • Cloud Security Portfolio: Augmented the portfolio with cloud security solutions to protect SaaS services and IaaS platforms.

Adjacent Markets

  • Identity, Encryption, and Application-Level Security: Acknowledged opportunities in adjacent markets such as identity and application-level security.
  • Cloud Security TAM: Anticipated growth in cloud security TAM as more companies move workloads to the cloud.

Market Adjacencies

  • Desire to Grow: Expressed a desire to grow into market adjacencies, including identity and encryption.
  • Service Offerings: Emphasized the importance of consulting and assessment-driven security offerings to help customers deploy products effectively.

Elastic Enterprise

  • Evolving Firewall Delivery: Acknowledged the evolution of firewall delivery methods, including virtual firewalls and software-defined firewalls.
  • Security Defined Networking (SDN): Suggested that SDN could evolve into Security Defined Networking, emphasizing the importance of dynamic firewall policies.

Market Share Gain

  • Drivers of Share Gain: Attributed share gain to great products and leveraging the architectural advantage.
  • Competition: Highlighted the focus on Palo Alto Networks and Fortinet as key competitors, with plans to capitalize on their product refresh cycles.

Firewall Market

  • Attractiveness: Described the firewall market as attractive due to evolving use cases and the expansion of the security perimeter.

Network Sensors

  • Splunk and Analytics: Compared Splunk's role in security analytics and emphasized Cisco's focus on the line of fire and data storage.
  • SIEM Space: Indicated that Cisco does not plan to enter the SIEM space but sees potential partnerships with players like IBM.

Go-to-Market Strategy

  • Dedicated Sales Organization: Established a dedicated security specialist sales organization.
  • Acquisitions: Discussed acquisitions aimed at strengthening the security portfolio and integration efforts.

Advanced Malware Protection (AMP)

  • Holistic Endpoint Security: Discussed the role of AMP in endpoint security, including detection capabilities and integration with other products.
  • Endpoint Market Dynamics: Addressed the dynamics of the endpoint market, including the dominance of Symantec, McAfee, and the emergence of newer players like Cylance and SentinelOne.

Cloud Security

  • Amazon Web Services (AWS): Acknowledged AWS’s security capabilities but noted the complexity and the need for customers to translate business requirements into API-driven security policies.
  • Managed Security Services (MSSP): Mentioned the trend toward outsourcing security and Cisco’s role in enabling MSSPs.

Recurring Revenues

  • Subscription Model: Highlighted the importance of security in driving the shift towards a subscription-based business model.
  • Customer Alignment: Emphasized the alignment of interests between Cisco and customers in the subscription model.

Sustainability of Growth

  • New Customers vs. Existing Base: Noted the focus on acquiring new customers and expanding the market through upselling opportunities.

Closing Remarks

  • Future Growth: Reiterated Cisco's commitment to growing the security business and addressing evolving market needs.