Cisco CEO Chuck Robbins is making a big bet on subscriptions

By Aarthi Rayapura May 23, 2016

Cisco’s grand plan, started under former CEO and now Chairman John Chambers and continuing under current CEO Chuck Robbins, is to push for subscription revenue…

The tension between the old Cisco and a newer one was apparent in today’s Q3 earnings report. The results were better than analysts expected, and Cisco shares rose by about 6 percent after hours. Revenue was $12 billion, down slightly year on year, while earnings were 57 cents per share.Nearly half — about $5.3 billion — of Cisco’s Q3 revenue came from sales of routers and switches. Sales of both fell from this time a year ago, and have tended to rise and fall with the health of the global economy.
But where Cisco is growing — in areas that are relatively small now, like security and collaboration — says more about its long-term prospects. Its collaboration business -— Webex, video conferencing and phones — grew 10 percent to nearly $1.1 billion. Security grew 17 percent to $482 million, while the wireless business grew a relatively slow 1 percent to $615 million. All of these businesses have a subscription-based aspect.

Read the full article at: www.recode.net

And for more on how product based businesses are moving to the Subscription Economy, read Zuora CEO Tien Tzuo’s piece It’s Not a Software Story: It’s a Business Story.