Networking giant Cisco is making headway in its strategy to augment a portfolio of hardware products with a significant and high-margin services offering. For the period ended in April 2013, Cisco reported third quarter net sales of $12.2 billion and net income of $2.5 billion – what Cisco Chairman and CEO John Chambers told analysts was “slow but steady” growth.
"Cisco is executing at a very high level in a slow, but steady economic environment. We are especially pleased with our ninth consecutive record revenue quarter. We are starting to see some good signs in the U.S. and other parts of the world, which are encouraging," said Chambers. "The pace of change is increasing and Cisco is well positioned."
Cisco’s services revenue outpaced product sales for the quarter: services grew by 7 percent while product sales grew by 5 percent. Cisco has been making a transition from being a communications-focused company to an IT equipment and solutions provider, focusing on segments such as data centers and the cloud. It has steadily been acquiring technologies and expertise in those areas; several acquisitions were announced during its third fiscal quarter including:
- The acquisition of privately held Intucell, Ltd., a provider of advanced self-optimizing network (SON) software solutions that enable mobile carriers to plan, configure, manage, optimize, and heal cellular networks automatically, according to changing network demands.
- The acquisition of Cognitive Security, a privately-held company headquartered in Prague, Czech Republic. Cognitive Security's solution integrates a range of sophisticated software technologies to identify and analyze key IT security threats through advanced behavioral analysis of real-time data.
- The intent to acquire SolveDirect, a privately held company headquartered in Vienna, Austria that provides innovative, cloud-delivered services management integration software and services.
- The intent to acquire privately held Ubiquisys, a leading provider of intelligent 3G and long-term evolution (LTE) small-cell technologies that provide seamless connectivity across mobile heterogeneous networks for service providers.
"We have always believed that the Internet will revolutionize the way we work, live, play, and learn,” Chamber said in a release. “This has never been truer than it is today, with cloud, mobility and video all coming together to deliver the Internet of Everything and unprecedented new opportunities for businesses and consumers."
