Cisco is working to reinvent itself, just like Microsoft

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Cisco is striving to reinvent itself and capitalize on the modern transition to cloud computing, after years of slow adaptation.

Once the world’s most valuable company, Cisco has failed to adapt quickly enough to the move to the cloud. The company built a lucrative business around traditional networking equipment and failed to offer equipment to emerging cloud giants that adequately met their needs when building their cloud data centers.

According to Bloomberg, the company is striving to reinvent itself, with analysts seeing parallels between Cisco and Microsoft. Like Cisco, Microsoft has missed emerging trends, including the rise of smartphones and mobile computing. Under the leadership of CEO Satya Nadella, however, the Redmond giant quickly pivoted to the cloud, becoming the world’s second-largest cloud provider. As a result, Microsoft is only the second US company, behind Apple, to cross the $ 2,000 billion valuation mark.

Despite the parallels, Cisco CEO Chuck Robbins said Cisco finds itself in a unique position, with unique challenges.

“The challenge we have is that no large tech hardware company has undergone such a transformation. “

As part of Cisco’s transformation, the company has focused on software and services, acquiring a large number of companies to help it grow its portfolio. Even there, however, the company faced challenges and missed opportunities. While Webex is one of the leading video conferencing platforms and remains a top choice among business users, it has largely overtaken Zoom during the pandemic.

“Webex was the first brand,” said Erik Suppiger, analyst for JPM Securities, Bloomberg. “The perception now is that Zoom has a huge advantage in terms of market share. “

Cisco clearly has a long way to go, but the company is optimistic. In fact, he predicts that he will exceed analysts’ expectations in the coming years, predicting that his earnings will grow by 5-7% each year until at least 2025.

It remains to be seen whether he will be able to keep those promises.


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