Cisco 2014 Annual Report Download - page 10

Strategy and Focus Areas
Our strategy is to deliver the integrated architectures, solutions, and outcomes to help our customers grow, manage costs, and
mitigate risk. We see our customers, in almost every industry, becoming increasingly reliant on technology—and specifically
the network—to meet their business objectives and compete successfully in the market.
Our focus continues to be on capitalizing on market transitions to maintain leadership in our core markets and to enter new
markets where the network is foundational. We believe this focus best positions us to become a more relevant and trusted
partner to our customers and to expand our share of our customers’ IT spending. We are focused on driving the innovation,
speed, agility, and efficiencies in our company required to deliver leading technology solutions for our customers and
shareholder value for our investors.
Over the last few years, we have been working to transform our business to move from selling individual products and services
to selling products and services integrated into architectures and solutions, as well as to meet customers’ business outcomes.
As a part of this transformation, we are making changes to how we are organized and how we deliver our technology. We
believe these changes enable us to better meet our customers’ requirements and help them stay ahead of market transitions.
As part of the ongoing transformation of our business, we continue to drive product transitions in our core business, including
the introduction of next-generation products with better price-performance and architectural advantages compared with both
our prior generation of products and the product offerings of our competitors. We believe that many of these product
transitions are gaining momentum based on the strong year-over-year product revenue growth in certain of the new products,
but we do continue to manage through the transitions of several of our existing key product platforms, and we continue to see
the impact thereof on our overall core performance. Going forward, a focus on utilizing our core products within the integrated
solutions that we provide customers to meet their business outcomes will be a critical part of our strategy.
In our view our routing and switching product leadership has been foundational to our success in the data center market. We
initially captured the market transition to converged infrastructure, bringing together networking, compute, and storage into
one integrated architecture with the Unified Computing System (UCS). We continue to expand the opportunity relating to
UCS, including incorporating the UCS solution within our solutions for cloud and virtualization. We believe that disruption in
the enterprise data center market is accelerating, due to changing technology trends that, we believe, depend on an intelligent
network—trends such as network virtualization, cloud, and the increased demands of applications. To take advantage of our
position in our customers’ network infrastructure, we are implementing strategies and offering strong products to address each
of these major transitions, including:
• Virtualization, which we refer to as the process of creating a virtual, or nonphysical, version of a device or resource,
such as a server, storage device, network, or operating system, in such a way that users as well as other devices and
resources are able to interact with the virtual resource as if it were an actual physical resource.
• The cloud, which we refer to as an IT hosting and delivery system in which resources, such as servers or software
applications, are no longer tethered to a user’s physical infrastructure but instead are delivered to and consumed by
the user “on demand” as an Internet-based service, whether singularly or with multiple other users simultaneously.
We also remain focused on continued investment in our services portfolio, tightly integrated with our product portfolio, to
deliver the solutions our customers want. A few examples of new service offerings include security services, cloud and
managed services and consulting services.
Among our other areas of focus are:
• Our security products, where we are seeing strong momentum as we integrate our recently acquired Sourcefire, Inc.
(“Sourcefire”) portfolio into an integrated security architecture
• Our collaboration products, where we have recently introduced an entirely new portfolio of products designed to
deliver a much richer experience at much lower price points
• Our wireless products, where we are seeing strong growth of our cloud networking business, which we acquired
from Meraki, Inc.
• Our software offerings, where we are focused on delivering our technology and solutions via new license models by
which we seek to increase our recurring revenue
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