FREE ESSAY ON CISCO

CISCO

Cisco Systems, Inc. is the worldwide leader in networking for the Internet. Cisco operates
in one industry segment and creates hardware and software solutions that link computer
networks so that people have easy access to information without regard to differences in
time, place or type of computer system. 
Networking is a multi-billion dollar global market whose growth is spurred by the belief
that the Internet is changing the way we all work, live, play and learn. Over the last
year, there has been a key shift in the role of the Internet and in how the Internet is
perceived. What was once a fairly complex tool used by an elite group of highly technical
individuals is now a technology driving economic change globally by creating new jobs and
market opportunities. 
The Company markets its products through its direct sales force, single and two-tier
distributors, value-added resellers, service providers and system integrators. This
multiple-channel approach allows customers to select the channel that addresses their
specific needs and provides the Company with broad coverage of worldwide markets. 
Customers benefit from Cisco networking solutions through more efficient exchange of
information, which in turn leads to cost savings, process efficiencies, and closer
relationships with customers, prospects, business partners, suppliers, and employees.
Cisco solutions are the networking foundation for companies, universities, utilities, and
government agencies worldwide. 
The Company was founded in late 1984 by a small group of computer scientists from
Stanford University seeking an easier way to connect different types of computer systems.
Cisco Systems shipped its first product in 1986. Since then, Cisco has grown into a
multinational corporation with over 10,000 employees in more than 200 offices in 54
countries. Cisco's products encompass the broadest range of networking solutions
available from any single supplier. These solutions include routers, LAN and WAN
switches, dial and other access solutions, SNA-LAN integration solutions, Web site
management tools, Internet appliances, and network management software. The thread that
ties these products together is the Cisco IOSJ software platform, which delivers network
services and enables networked applications. Cisco's offerings also include
industry-leading customer services for network design, implementation, maintenance, and
support. 
Cisco is unique in its ability to provide all these elements, either by itself or
together with partners. Cisco serves customers in three target markets 
? Enterprises - Large organization with complex networking needs, usually spanning
multiple locations and types of computer systems. Enterprise customers include
corporations, government agencies, utilities and educational institutions. ? Service
Providers - Companies that provide information services including telecommunication
carriers, Internet Service Providers, cable companies, and wireless communication
providers. ? Small/Medium Business - Companies with a need for data networks of their
own, as well as connection to the Internet and/or to business partners. 
Cisco sells its products in 90 countries through a direct sales force, distributors,
value-added resellers and system integrators. Cisco has headquarters in San Jose, CA. It
also has major operations in Research Triangle Park, NC, and Chelmsford, MA; as well more
than 200 sales and support offices in 54 countries. 
In contrast to many technology companies, Cisco does not take a rigid approach that
favors one technology over the alternatives and imposes it on customers as the only
answer. Cisco's philosophy is to listen to customer requests, monitor all technological
alternatives, and provide customers with a range of options from which to choose. Cisco
develops its products and solutions around widely accepted industry standards. In some
instances, technologies developed by Cisco have become industry standards themselves. 
Every day, Cisco and its customers are proving that networking and the Internet can
fundamentally and profitably change the way companies do business. Cisco describes this
change in the Global Networked Business. A Global Networked Business is an enterprise, of
any size, that strategically uses information and communications to build a network of
strong, interactive relationships with all its key constituencies. 
The Global Networked Business model opens the corporate information infrastructure to all
key constituencies, leveraging the network for competitive advantage. The Global
Networked Business model employs a self-help model of information access that is more
efficient and responsive than the traditional model of a few information gatekeepers
dispensing data as they see fit. Cisco itself is a leading example of a Global Networked
Business. By using networked applications, the Internet and its own internal network,
Cisco is saving at least $300 million a year in operating costs, while improving
customer/partner satisfaction and gaining a competitive advantage in areas such as
customer support, product ordering and delivery times. Cisco is today the world's largest
Internet commerce site, selling more than $6 million in products every business day. 
Cisco is one of America's greatest corporate success stories. Since shipping its first
product in 1986, the company has grown into a global market leader that holds No. 1 or
No. 2 market share in virtually every market segment in which it participates. Since
becoming a public company in 1990, Cisco's annual revenues have increased from $69
million in that year to $6.44 billion in fiscal 1998, nearly one hundred-fold in seven
years. As measured by market capitalization, Cisco is the third largest company on NASDAQ
and among the top 40 in the world. 
Fiscal 1998 was another successful year for Cisco Systems. Their annual growth rate of 57
percent meant that they grew at a faster pace than any of their traditional competitors.
The reasons for this are clear. Organizations of all sizes are beginning to recognize the
value of their information networks and the Internet as a source of business advantage.
As a result, many of Cisco's customers are beginning to turn to us as their strategic
provider for end-to-end networking solutions. To meet their increasing demands this past
fiscal year, they delivered a wide range of new products; expanded their offerings
through internal development, alliances, and acquisitions; enhanced their customer
support; and increased their presence around the world. 
These efforts helped Cisco deliver exceptional value and returns for their customers,
shareholders, business partners, and employees. For the fiscal year ending July 26, 1998,
Cisco reported revenue of $6.4 billion, a 57 percent increase compared with revenue of
$4.1 billion in fiscal 1997. Net income for the year was $1.0 billion or $1.52 per common
share, compared with fiscal 1997's net income of $913 million or $1.37 per common share.
Research and development investment increased to $698 million, up from $399 million the
previous year. Cisco ended the year with cash, cash equivalents, and short-term
investments balance of $1.3 billion, compared with a year-end balance of $1.0 billion in
1997. 
Much of their success has been because of the close awareness of their customers' needs.
To remain close to their customers, they realigned their organization along lines of
business matched to the key markets they serve: Enterprise, Service Providers, and
Small/Medium Business. The new organization will enable them to provide market-specific,
end-to-end solutions that include integrated software, hardware, and network management.
It will also allow them to customize their sales, support, and business programs to each
key market. Additionally, their focus on market solutions will improve their ability to
deliver world-class products. Today, Cisco is the number one or number two supplier in
almost every product sector that they address, and they are rated the best in terms of
customer support and design consulting. Their Cisco IOS software is increasingly becoming
the de facto industry standard for delivering network services and enabling networked
applications. 
Their goal has always been to provide solutions for their customers without imposing a
particular technology as the only right answer. Cisco continues to deliver the products
that best address their customers' requirements through the innovation of their
engineering teams, complemented by their alliances, acquisitions, and minority
investments. 
Of all the companies that Cisco has acquired to date, almost half were added in fiscal
1997. The technology expertise they've gained this year through acquisitions includes
network management, Digital Subscriber Line (DSL), and voice/data/video integration. They
expect acquisitions to play an ongoing key role in their leadership strategy. Strong
alliances will also be an increasingly important element of their future strategy. This
year Cisco continued to develop key relationships with industry leaders such as
Microsoft, Intel, Hewlett-Packard, GTE, and Alcatel in order to enable consistent network
services throughout the fabric of the network. Within Cisco, they've created a new group
to focus primarily on the development and success of their strategic alliances. This new
team, which encompasses engineering, marketing, and sales, will allow us to work closely
with their alliances and move quickly to jointly deliver solutions to the marketplace. 
Also key to Cisco's success is the Cisco brand itself, which is recognized worldwide as
the leading name in networking. Customers have come to associate the Cisco brand with a
secure, reliable, high-performance network; a brand in which they can have confidence.
They will continue to enhance and expand their brand in the future. 
The ongoing deregulation in the telecommunications market and the convergence of
technologies such as Asynchronous Transfer Mode (ATM) and DSL are driving the trend
toward integration of voice, video, and data networks. In the upcoming years, they will
continue to extend their presence in this area. As the Internet becomes an integral part
of people's business and personal lives, they will sustain their move into emerging
markets as the leading provider of networking solutions. 
While the future holds many exciting opportunities for Cisco, their success will depend
on how they will they execute their strategy and manage the challenges. They must
maintain their passionate customer focus and always work toward exceeding their
customers' rapidly increasing expectations, winning customer's vote as a strategic
end-to-end networking provider. It is essential that they successfully implement their
alliance and acquisition strategy. Faced with increased competition, it is also important
to maintain their product leadership in each market segment that they serve while
expanding into new markets. In addition, they must continue to hire and retain the best
people in the industry. 
Cisco is fortunate to be in a marketplace that offers so many exciting opportunities.
Looking to the future, Cisco is well positioned for the years ahead. The Networked
Multimedia Connection program with Microsoft and Intel was formed to encourage the
widespread adoption of networked multimedia applications in businesses using Intranets
and the Internet. Their relationship with Hewlett-Packard covers a broad range of
initiatives including technology development, product integration, professional services,
and customer service. Last May, GTE announced that it would build a national network
based on Cisco's products, enabling service providers to rapidly deploy value-added
services and drive next-generation Internet offerings. And the goal of their
collaboration with Alcatel is to offer complete networking solutions to
telecommunications carriers and other Internet service providers worldwide. 
Each of Cisco's strategic alliances will create a sustainable competitive advantage for
both companies in order to optimize products, price points, distribution, and services.
Through these relationships, Cisco will provide its customers the ability to become
global networked businesses well into the next century.