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pww.comCisco Systems, Inc. Presents at UBS Global Technology and Services Conference 2011, Nov-15-2011 12:00 PM - NasdaqGS:CSCO

NasdaqGS:CSCO

Robert W. Lloyd [Former President of Development & Sales] đź’¬

Robert W. Lloyd, the Former President of Development & Sales at Cisco Systems, Inc., presented several points during the UBS Global Technology and Services Conference 2011:

  1. First Quarter Results:

    • Product order growth of 13%.
    • Service order growth of 16%.
    • Revenue growth of 5% year-over-year, exceeding expectations.
    • Balanced growth across major customer segments:
      • Enterprise customers: 11% order growth.
      • Public sector: 10% order growth.
      • Commercial business: 12% growth.
      • Global service provider segment: Fastest-growing market segment.

  2. Customer Validation:

    • Customers validate the company’s focus on architectures, five key priorities, and product innovation.
    • Customers view Cisco as a trusted advisor to help solve complex problems related to cloud, video, and collaboration.
    • Strong market share position and stabilization of market share changes.

  3. Global Restructuring:

    • Simplification of decision-making processes within the company.
    • Enhanced focus on competitive positioning.
    • Increased vocalization about competitive landscape and challenges to competitors’ claims.

  4. Customer Expectations:

    • Customers seek help in driving new sources of revenue, shaping customer experiences, cutting costs, and moving faster in technology deployment.

  5. Financial Strength:

    • Customers appreciate Cisco’s $44 billion in cash reserves and its predictable relationships.

  6. Focus Areas:

    • Routing, switching, services, and security are key focus areas.
    • Collaboration is a significant growth opportunity, with 16% order growth in the first quarter.
    • Data center, virtualization, and cloud are strategic areas, with the UCS portfolio achieving 100% year-over-year growth and strong market share positions.
    • Video, including TelePresence, is another successful area with 15% order growth.

  7. Strategic Positioning:

    • Cisco is well-positioned against competitors with a strong product portfolio, innovation, and a clear focus on customer needs.
    • Continued partnership and acquisition strategy, with a focus on smaller tuck-in acquisitions.

  8. Competitive Landscape:

    • Competitive intensity against HP, Juniper, and Avaya.
    • Programs enhanced in the channel to address competitive challenges.
    • Continued market share gains in collaboration against Avaya.
    • Long-term competition in Unified Communications will likely be with Microsoft.

  9. Service Provider Business:

    • Success in the service provider segment, with 16% order growth in the first quarter.
    • ASR 5000 (mobile packet core) has gained traction with 31 of the world’s largest mobile operators.
    • Edge routing market remains competitive, with stabilization in market share.

  10. Security Market:

    • Security orders grew 10% but underperform potential.
    • Strategy to enhance the role of the network in cybersecurity.

  11. Virtualization and Partnerships:

    • Strong partnerships with Citrix and VMware.
    • Integration of collaboration and video experiences into virtual desktops.

  12. VCE Coalition:

    • VCE (coalition between VMware, Cisco, and EMC) is growing with over 500 Vblock customers.
    • Accelerating move to converged infrastructure.

  13. UCS-Based Server Product:

    • Winning in medium-sized businesses, service providers, VDI use cases, and private cloud applications.
    • Not winning in large commodity scale-out environments.

  14. Layer 4 to 7 and Security Services:

    • Need to improve Layer 4 to Layer 7 portfolio and security services.
    • Focus on networking issues that customers want solved.

  15. Huawei as a Competitor:

    • Huawei’s entry into the enterprise market presents challenges.
    • Aggressive defense of Cisco’s value proposition and channel relationships.
    • Concerns over Huawei’s business practices and intellectual property violations.

  16. Indirect Channel and Partners:

    • Indirect channel and partners are critical for driving growth.
    • Value proposition ensures profitability for partners.
    • No intention to gain gross margin at the expense of partners.

  17. Gross Margin Improvements:

    • Nexus 7k margins improved 2% sequentially.
    • Overall Nexus portfolio gross margins increased 5% sequentially.
    • Gross margin on the overall switching portfolio returned to levels of the previous year.

  18. Microsoft Office Communicator:

    • Microsoft’s cloud-based service will be combated with a superior offer in collaboration with service providers.

These points summarize the key messages conveyed by Robert W. Lloyd during his presentation.

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