Cisco Systems, Inc. Presents at Raymond James Technology Investors Conference, Dec-07-2020 03:20 PM - SEHK:4333

SEHK:4333

During the Cisco presentation at the Raymond James Technology Investors Conference, Emily Hunt, the Investor Relations Manager, made the following statements:

1. Forward-Looking Statements Disclaimer:
   • Before the discussion began, Emily noted that Cisco may make forward-looking statements during the presentation.
   • She emphasized that actual results may differ materially from these forward-looking statements.
   • Emily mentioned that these statements are subject to risks and uncertainties detailed in Cisco's filings, specifically highlighting their most recently filed 10-K and 10-Q.

These were the main points covered by Emily Hunt during her opening remarks.

** Key Points Mentioned by Gee Rittenhouse**

1. Background and Role:

   • Gee Rittenhouse holds a PhD from MIT and has extensive experience in technology and security.
   • He joined Cisco 7 years ago to lead the cloud effort and has been heading the security business for the past 4 years.

2. Security in Corporate Strategy:

   • Security is both a vertical and a horizontal component within Cisco, integrating with networking, data center, collaboration, and AppDynamics.
   • Security is a top-of-mind concern for all customers, making it integral to all business units.

3. Big Trends and Growth Opportunities:

   • The migration to cloud has accelerated due to the COVID-19 pandemic, enabling work from anywhere on any device.
   • This trend increases complexity for security, leading to a need for integrated solutions.
   • Cisco's strategy involves offering products in major security markets and pre-integrating them to simplify management.

4. Market Segmentation:

   • The largest TAMs are in network, identity, and devices.
   • Cisco focuses on foundational elements of security, such as firewalls, email, and endpoints, rather than niche markets.

5. Buying Motion:

   • Customers engage in both transformation discussions and single-product purchases.
   • Cisco's portfolio is open and integrates with other vendors, allowing a gradual migration.

6. SecureX Platform:

   • SecureX is a unifying platform that integrates with all Cisco security products and third-party solutions.
   • It provides a single pane of glass for security management and leverages AI and machine learning to automate and simplify security.

7. Transition to Software and Recurring Revenue:

   • The security business unit is fully subscription-based and is moving towards SaaS models.
   • About 25% of the business is now pure SaaS, reflecting the market's shift towards cloud-native solutions.

8. Impact of Hybrid and Public Cloud Adoption:

   • Cloud adoption has changed the security architecture, with protection moving into applications themselves.
   • The buying center has shifted from IT to developers and lines of business, requiring expanded security portfolios.

9. Pandemic Impact:

   • The pandemic accelerated cloud adoption and digital transformation.
   • New verticals, such as healthcare, are now more open to digitalization.
   • Security remains a top priority, with a focus on Zero Trust and other transformations.

10. Work from Home:

    • A hybrid work environment is likely to persist, raising security challenges.
    • Increased video usage and data rates require robust on-prem security components.

11. Acquisitions:

    • Acquisitions play a crucial role in expanding foundational elements of the security portfolio.
    • Recent successful acquisitions include Sourcefire, OpenDNS, and Duo.
    • Smaller acquisitions are now possible due to the SecureX platform, providing immediate value to customers.

12. SASE and SD-WAN:

    • SASE combines SD-WAN and security, with Cisco integrating its market-leading positions in both areas.
    • The integration of SD-WAN and security provides significant benefits, reducing setup times and improving functionality.

13. Identity Access Management:

    • Duo is a leader in multifactor authentication and Zero Trust, complementing partnerships with Okta and Microsoft.
    • Duo's user experience and NPS scores are highly rated, making it a valuable addition to Cisco's portfolio.

14. Competitors:

    • Cisco faces serious competitors in each security market segment.
    • Trusted partner relationships with customers, such as with Microsoft, create a complex partner/competitor ecosystem.

15. Least Appreciated Aspect:

    • The security business is larger than reported product revenue, including significant service revenue.