BrandArena: 8 Things You Didn’t Know About Cisco Systems

Friday, 21 April 2017

8 Things You Didn’t Know About Cisco Systems

Cisco Systems is an IT and networking brand that specializes in switches, routers, cybersecurity, and IoT and whose logo seems to be on every office telephone or conference hardware. Although Cisco is a popular well-known organization, there still lies an element of enigma around the brand that leaves a vaguely content yet eager to know more about feeling—because there are things about Cisco including the brand name itself that is unknown.

Here are eight things you didn’t know about Cisco.

1. Cisco is short for San Francisco

"Cisco" is short for San Francisco, the city where Stanford computer scientists Leonard Bosack and Sandy Lerner founded the company in 1984. That's why in Cisco's early days, Bosack and Lerner insisted on branding its products with the lowercase "cisco". Cisco's logo, which may initially appear to be just a series of vertical lines, represents the Golden Gate Bridge, with the two taller lines signifying the towers.

2. Early troubles at Stanford

Bosack and his wife Lerner founded Cisco when both of them were still employed at Stanford. Bosack continued working at Stanford with Cisco co-worker and co-founder Kirk Lougheed, where they developed the company's first router. However, it was an exact replica of Stanford's "Blue Box" router and ran an unlicensed copy of the university's multiple-protocol router software, which was adapted into the foundation of Cisco IOS.

In 1986, Bosack and Lougheed were forced to resign from Stanford over the product's development, and the university considered filing criminal charges against Cisco over the theft of its intellectual property. However, Stanford eventually agreed to license its router software and two computer boards to Cisco in 1987.

3. Cisco has 73,711 employees world wide

Cisco was officially incorporated on December 10, 1984 in California and went public on February 16, 1990. NASDAQ NM: CSCO (Common Stock). Chuck Robbins is the Chief Executive Officer of Cisco with the Q4 FY'16 Employee Count being 73,711 and the company’s Revenue being $12.6 Billion at the end of FY’16. In Nigeria, Olakunle Oloruntimehin is the General Manager looking after +/- 45 employees at Cisco Nigeria.

4. Most valuable company in the world

Cisco's price surged to nearly $80 at the apex of the dot-com bubble in March 2000, making it the most valuable company in the world with a market cap of $500 billion. However, that rally wasn't sustainable, since the stock was trading at nearly 240 times earnings. The bubble popped, and Cisco's subsequent plunge made it a cautionary tale of the dot-com bust.

Cisco stock never came close to its dot-com bubble levels again. Today, Cisco has a market cap of just over $170 billion and trades at 18 times earnings. The most valuable company in the world today is Apple (NASDAQ:AAPL), which has a market cap of $730 billion and trades at 17 times earnings.

5. Cybersecurity is its fastest growing business

Cisco's fastest-growing business is its Cybersecurity unit, which grew its revenue by 14% annually to $528 million last quarter and accounted for 6% of its product revenues. Cisco has been aggressively expanding that business through big investments and acquisitions.

It also bundles its security products with its networking hardware and software, which gives it tremendous leverage against smaller stand-alone security companies like Fire Eye (NASDAQ:FEYE) -- which is frequently cited as a potential takeover target for the company.

6. Cisco provides free training to thousands through its Cisco Networking Academy Program

Cisco Networking Academy (also known as NetAcad) launched in October 1997 with 64 educational institutions in seven states, the Networking Academy has spread to more than 150 countries. Since its inception, over 1.6 Million students have enrolled at more than 10,000 Academies located in high schools, technical schools, colleges, universities, and community-based organizations. The Cisco Networking Academy Program is a comprehensive e-learning program that provides students with the Internet technology skills essential in a global economy.

The Networking Academy delivers web-based content, online assessment, student performance tracking, hands-on labs, instructor training and support, and preparation for industry standard certification. There are over 30 Cisco Networking Academy centers in Nigeria and the country has the highest NetAcad female participation in Cisco Europe, Middle East, Africa and Russia (EMEAR) region with over 35,000 females trained since inception, with Nigeria having the highest number of females trained in FY’16 at 46% of the total figure of 21529.

7. It used to make cameras

Back in 2009, Cisco tried to expand its presence in consumer electronics by buying Pure Digital Technologies, the maker of the popular Flip Video camcorders, for $590 million. At the time, Cisco stated that connecting those cameras to the internet would allow "people to share, publish, and [easily] get access to video," which fit its "vision of visual networking."

That proclamation sounded very similar to the strategy GoPro (NASDAQ:GPRO) unveiled five years later. At the time of the acquisition, flip cameras accounted for 75% of the handheld digital camcorder market. But just like GoPro's cameras, Flip video cameras were gradually rendered obsolete by smartphones -- and Cisco quietly killed the Flip two years later.

8. It sold its set-top box business to Technicolor

In 2005, Cisco acquired set-top box maker Scientific Atlanta for $6.9 billion to beef up its video streaming technologies. These technologies strengthened Cisco's service provider video and collaboration products, but the set-top boxes themselves were a dead weight on its top line growth. Cisco then sold the set-top box business to Technicolor for $600 million in late 2015. That's also why Cisco has reported two sets of top line results over the past few quarters. Last quarter, its total revenue fell 3% annually, but only fell 2% after excluding the impact of the set-top box business across all comparable periods.

Cisco is one of the few IT and Networking brands that takes pride in female inclusion in predominately male industry, striving to bridge the gaps in IT Skills across West Africa.

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