Cisco 2010 Annual Report Download - page 5

Download and view the complete annual report

Please find page 5 of the 2010 Cisco annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 84

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84

1700+
Customers World Wide
Enterprise, service provider and
commercial customers around the
world have adopted the Cisco Uni ed
Computing System for greater
business agility, reduced costs,
and operational e ciencies.
Cisco is focused intently on balancing
the investment and support requirements
of our flagship businesses with the
seeding and investment requirements
for next-generation growth opportunities.
We think that this portfolio management
process and capability differentiates us
as a company, and is made possible by
our dynamic organizational structure of
councils and boards. This structure
allows us to move our smartest people
and resources rapidly and efficiently
to address growth opportunities. I am
amazed at how often interdependencies
arise between seemingly different
businesses. Our “One Cisco” approach
keeps us focused on the network and
extends our ability to take advantage
of growth opportunities.
Execution: Innovation and Operational
Excellence
In fiscal 2010, Cisco reported record
net sales of over $40 billion, an
increase of 11% compared to a year
ago. Annual product sales were $32.4
billion, up 11% year-over-year. Service
revenue represented 19% of annual
sales or $7.6 billion, up 9% from a year
ago. Sales across all of our geographic
theaters increased when compared to
fiscal 2009. We attribute this increase
to an improvement in overall demand
derived from a gradually recovering
global economy as well as, in our view,
increased demand for the architectural
approach to products and services that
only Cisco can offer.
From a technology product perspective,
we saw an improved demand
environment for capital expenditures
and growth across each of our
major product categories. In fiscal
2010, switching revenue was up
approximately 12% from a year ago,
due in part to the ongoing success
of our Nexus family of next-generation
data center switches, which has
attained an annualized revenue run
rate of over $2 billion as of the fourth
quarter of fiscal 2010. Cisco’s Unified
Computing Systems (UCS) offering,
which also addresses the transition
occurring in the data center, witnessed
outstanding customer acceptance
driven by the move to data center
virtualization and cloud computing.
In less than one year, the total number
of unique customers for Cisco UCS has
reached over 1,700, nearly doubling
in the last quarter of fiscal 2010. As
networking, servers, storage and
software come together, we believe
we have uniquely positioned Cisco
to lead with an architectural approach
that is unmatched in the industry.
Routing revenue was up approximately
4% from a year ago. Following the
remarkable success of our CRS-1
high end router, Cisco unveiled the
CRS-3, which we believe will serve as
the foundation for the next-generation
Internet and the astonishing growth of
video transmission, mobile devices,
and new online services throughout
the next decade. We also launched
Cisco Systems, Inc. 3
Annual Report 2010
Letter to Shareholders