Cisco Systems, Inc. Presents at UBS Best of Americas Conference, Sep-12-2013 10:10 AM - NasdaqGS:CSCO

NasdaqGS:CSCO

Phil Smith Patrick [Director of UK Technology Strategy Board] 💬

During his presentation at the UBS Best of Americas Conference on September 12, 2013, Phil Smith Patrick, the Chief Executive of Cisco in the UK and Ireland, discussed several key points:

Introduction: Phil introduced himself and provided background information on his role and tenure at Cisco. He highlighted the company’s aspiration to become the #1 IT company in the world.
Past Challenges: In 2011, Cisco faced criticism for not clearly communicating its strategy and direction. This led to a lack of confidence from stakeholders, including employees and analysts.
Strategy Revisions: Over the past two years, Cisco improved its communication and strategy, focusing on simplification, accountability, and clarity. These efforts have been successful, as evidenced by positive feedback and strong financial results.
Financial Performance: Cisco achieved seven consecutive quarters of profit growth, with operating income and earnings per share (EPS) meeting or exceeding expectations.
Capital Allocation: The company maintained a dividend yield of around 3%, balanced share buybacks with dividends, and increased cash generation.
Operational Changes: Cisco simplified its organization, focused on key priorities, empowered its teams, and increased accountability. This resulted in a stronger focus on execution and profitability.
Market Evolution: Phil described the evolution of the technology landscape, from the rise of the internet to the current era of digital experiences and interactions, and the future of connected devices.
Internet of Things (IoT): By 2020, Cisco predicts that there will be around 50 billion devices connected to the internet, presenting significant opportunities for the company.
Cloud Adoption: Phil noted a rapid increase in cloud adoption, particularly in voice and collaboration services, with a jump from less than 1% to nearly 10% of his business in the UK and Ireland over four quarters.
App-Based Economy: The app-based economy is transforming various industries, including televisions and other devices, and changing the power dynamics and value creation.
Data Growth: The growth of data, including large-scale analytics and open data management, is driving the need for more sophisticated data handling and security.
Customer Expectations: Customers are increasingly mobile and expect seamless experiences across devices, which presents challenges and opportunities for businesses.
Simplification of Infrastructure: The traditional 7-layer OSI model is evolving into a simpler structure centered around applications, platforms, and infrastructure.
Growth Areas: Key growth areas include mobility, video (both consumer and business), and security, with a focus on vertical integration and software expertise.
Innovation Framework: Cisco continues to invest heavily in research and development, partnering with various entities, and acquiring companies to maintain its innovation edge.
British Innovation Gateway: The company launched the British Innovation Gateway, an initiative aimed at fostering innovation in the UK through partnerships, competitions, and supporting the digital economy.
Competitive Landscape:

Routing and Switching: Phil noted that Cisco sees less competition from Huawei compared to previous years, with some customers returning to Cisco due to concerns about innovation and capabilities.
Set-Top Boxes: The set-top box business is challenging and price-sensitive. Cisco has walked away from unprofitable deals but remains committed to the next generation of television.
Security: Cisco aims to address the fragmented security market by integrating security capabilities into its infrastructure products and services, such as the acquisition of Sourcefire.

Closing Remarks: Phil concluded by emphasizing Cisco’s focus on simplification, empowerment, and accountability, with a strong aspiration to lead the future of the network and become the #1 IT company.