Lest you think all this sounds too New Age-y to be of much use, fear not: The point of this is to help Cisco sell lots of new products and branch out into new areas. For example, it has targeted storage, and has been growing its storage-switch market share at a clip that should be making storage-switch makers Brocade, McData, and QLogic sit up and take notice.
The company also has security in its cross-hairs. In July it introduced its Network Admissions Control technology. And in a blockbuster alliance, it has teamed with Microsoft on network-access security, collaborating to make their emerging products for network security compatible. Cisco has made security deals with IBM as well. As has become its habit, Cisco expands its technology through acquisition, such as with its purchase of privately held Perfigo, Inc., a developer of packaged network access control solutions.
Additionally, it focuses on the future with converged voice and data products, most recently enhancing its IP telephony system by providing voice media and signaling encryption for new and currently installed 7940G and 7960G IP telephones. IP voice connections will now be encrypted from the phones themselves.
All this has paid off. In its most recent quarter, Cisco's net income rose 41 percent from a year ago to $1.38 billion--the highest quarterly net income in its history -- on 26 percent higher net sales of $5.93 billion. For the fiscal year, net income was up 23 percent from a year earlier to $4.4 billion, on 17 percent higher net sales of $22.0 billion.
But what of the future? There are those who say that the company's acquisitions binge is problematic, and that it won't be able to incorporate new companies into its overall strategy and culture. Others say that the successful purchase of Linksys shows this isn't the case. Either way, Cisco will be with us, and you ignore its products, services, and strategy at your own peril.
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