What's in a Name?
What's in a Name?
Founded in 1984, Cisco's name came from the city of San Francisco, which was why in the early days the name was in lower-case letters.
In the Beginning
Cisco was founded by Leonard Bosack and Sandra Lerner, a husband-and-wife team that, while both were working for Stanford University, created the first multiprotocol router to enable them to email each other. Two years later, Cisco shipped its first product, the AGS router for the TCP/IP. When the company went public in 1990, Lerner was fired and Bosack quit.
Bill Graves was Cisco's first CEO, and held the position until 1988. He was followed by John Morgridge, who lasted until 1995, when he was replaced by current CEO John Chambers. During Chambers' tenure, Cisco has grown from a $1.2 billion company into one with a current run rate of about $43 billion. It has more than 63,000 employees in more than 165 countries, and more than 475 offices worldwide.
Cisco has never been shy about building out its portfolio through acquisitions. In 1993, switching vendor Crescendo Systems was the first company Cisco bought, for $95 million. Since then, the networking giant has made more than 150 acquisitions, including several in 2012. Among its strategic buys this year are NDS Group (whose headquarters in Israel is shown), ClearAccess and Truviso. In 1999, Cisco bought 17 companies.
By 2000, fueled by the rise of the Internet, Cisco became one of the world's most valuable companies, with a market capitalization of more than $450 billion.
Cisco spends more than $5.8 billion—or about 13 percent of its revenue—in research and development each year. The company has been issued 12,200 patents and files more than 700 patents annually.
Cisco on the Field
Cisco executives see a lot of opportunities in sports arenas, creating StadiumVision, a sports venue technology that has been deployed in such facilities as the New Meadowlands Stadium (pictured, home of the New York Giants and Jets), Dallas Cowboys Stadium, the Los Angeles Staples Center (home of the NBA's Lakers and Clippers and NHL's Kings) and Real Madrid Bernabeu stadium.
And in the Olympics
Cisco is running the routing, switching, firewall and IP telephony to about 100 venues at this summer's 2012 Olympic Games in London. Among those are 34 competition venues, 20 mission-critical venues—including the Olympic Village and network operations center, and up to 50 spectator and athlete sites, such as transport hubs, training grounds and ticketing booths.
Cisco and Politics
The company has donated networking technology and services to support the Republican and Democratic national conventions since 2000.
Cisco was built on networking technology, and continues to dominate the market despite increased competition from the likes of HP, Juniper, Avaya, Huawei and Alcatel-Lucent. According to the company, the Catalyst 6500, pictured, is the world's most widely deployed enterprise switch, operating in environments from mountaintops to submarine decks. Meanwhile, the CR-3 routing system is powerful enough that the entire printed collection of the Library of Congress could be downloaded in just over one second and every motion picture ever created could be streamed in less than four minutes.
Cisco in recent years has expanded beyond its networking roots, becoming a larger presence in the data center with its Unified Computing System (UCS), which launched in 2009 and includes not only Cisco networking technology but also Cisco-branded x86 servers. In the past three years, the company has collected more than 11,000 UCS customers and now has an annual run rate of $1.3 billion. In first three months of 2012, data center revenue jumped 67 percent, making it among the fastest-growing businesses at Cisco.
The UCS has made Cisco a growing player in the highly competitive server market. In the first quarter of 2011, Cisco jumped onto the list of the top 10 server makers in the world, and was third in the x86 blade server space. In the first quarter of 2012, Cisco was the fifth-largest vendor in terms of server shipments, and shipments increased by 70.9 percent over the same period last year, according to Gartner.
Using Its Own Products
Cisco in 2006 launched its TelePresence immersive video collaboration business, and has used the technology itself to cut back on expenses related to travel. Over the past six years, TelePresence has saved the company $1.13 billion in travel costs and more than 610,170 metric tons of emissions. Cisco also uses its own health care video technology to provide on-site and remote care to as many as 43,000 Cisco employees and their families at the company's Life Connections Center.
Cisco estimates that every day, more than 320,000 meetings take place over WebEx, involving more than 23 million monthly participants from 230 countries worldwide. A Cisco engineer once used WebEx to share his thoughts from Base Camp as he prepared to summit Mount Everest.
Cisco has aggressively expanded its Connected Grid portfolio to bring intelligence to utility grids. The company currently has more than 250 Connected Grid customers worldwide.
In May 2012, Cisco shipped its 50 millionth IP phone, and officials said that over the past 18 months, endpoint shipments have grown 40 percent for IP phones.
Rockin' the Video Waves
The Doobie Brothers and Jewel have both performed for their fans over TelePresence.
Partnering With Cisco
About 80 percent of Cisco's revenue runs through the channel, and there are more than 84,000 partners authorized to sell and support Cisco solutions. Every $1 spent on Cisco product yields more than $12 in related services for channel partners.
The company handles 6 million live customer service interactions every year.
Cisco executives several years ago said they wanted to expand into more than three dozen new businesses—what they called "adjacencies"—and grow revenue by 12 to 17 percent a year. However, when business began to stagnate last year, Cisco restructured, paring 6,500 jobs, shuttering much of its consumer business—including the Flip video camera—refocusing on five foundational pillars and toning down its revenue projection numbers.