Cisco
Careers at Cisco
Mission
Cisco’s mission is to shape the future of the Internet by creating unprecedented value and opportunity for its customers, employees, investors, and ecosystem partners.
Business segments
Cisco is a technology firm that sells networking products and services to institutions (for-profit and nonprofit). The company operates three main business segments based on geography: the Americas, EMEA (Europe, Middle East, and Africa), and APJC (Asia-Pacific, Japan, and China). It maintains eight product segments: Switching, Next-Generation Network (NGN) Routing, Collaboration, Service Provider Video, Data Center, Wireless, Security, and Other Products.
History
In 1984, Len Bosack and his wife Sandy Lerner worked at Stanford University – he as a manager of a computer science lab and she as a supervisor at its business school. They wanted the ability to e-mail each other from their offices, which were in buildings 500 yards apart. Consequently, Bosack designed a technology to connect the local area networks in their departments – an internetworking router. It was a device that could automatically choose the best path for data to flow between two networks. The couple then tried to sell the device to various computer firms without success.
They next opted to launch their own company, Cisco Systems (the first word being based on an abbreviation of San Francisco), with co-founders Greg Setz, Kirk Lougheed, and Bill Westfield. The effort was not simple – in order to finance the company, the couple mortgaged their home, burned through their credit cards, and deferred salaries for early employees. In 1986 Cisco shipped its first product, a router for the TCP/IP (Transmission Control Protocol/Internet Protocol) protocol suite, making it the first firm to sell a multi-protocol router.
Cisco initially marketed its product to institutions such as research centers, universities, and government facilities. By 1987 it was shipping $250,000 worth of routers monthly, and revenues for the fiscal year ended July of that year reached $1.5 million. In 1988, the firm began targeting corporations with many geographic locations. Cisco produced new routers to accomodate the wider variety of communications protocols. The same year, it obtained funding from a venture capitalist, Donald T. Valentine of Sequoia Capital. He demanded and got a controlling stake in the company.
Valentine brought in John Morgridge, the Chief Operating Officer at GriD Systems, as Cisco’s new President and CEO. He gave Bosack the title of Chief Scientist, with Lerner becoming Head of Customer Service. For the fiscal year ended July 1990 revenues grew to a whopping $69.8 million. However, not everything was rosy -- Lerner did not get along with his new boss, partly because he had fired many of her friends; in August 1990, he fired her, and Bosack quit. Cisco went public that year, and by that time was the leader of the nascent router market. In 2000 it had the highest market capitalization of any company globally; though it no longer does, it is still one of the most valuable.
Benefits at Cisco
Business model of Cisco
Customer Segments
Cisco has a segmented business model, with four customers groups who have slightly different needs and problems:
- Enterprise: This group consists of firms with multiple locations that have 1,000+ employees.
- Service Providers: This group consists of firms that provide data, video, voice, and mobile services to businesses, utilities, governments, and consumers.
- Commercial: This group consists of firms that have less than 1,000 employees.
- Public Sector: This group consists of non-private entities such as federal, state, and local governments, in addition to educational institutions.
Value Proposition
Cisco offers two primary value propositions: brand/status and accessibility.
The company has a well-known brand, having been in existence since 1984 and maintaining a large global footprint of 400 offices with 70,000 employees. It has a market capitalization of $129 billion, making it one of the most valuable firms, and its products are often seen in movies and on TV shows.
The company sells its products through a wide variety of channels, making them more accessible to customers who might have difficulty finding or obtaining the items; these range from direct sales to service providers and resellers. It also markets its offerings to a large range of industries.
Channels
Cisco sells most of its products through its channel partners, who include systems integrators, resellers, service providers, and distributors. The remainder of its items is sold through direct sales.
The company also markets its offerings on its website, as well as through numerous training programs and events such as conferences, trade shows, and webinars.
Customer Relationships
Cisco’s customer relationship is primarily of a personal assistance nature. The company offers a wide range of support services to assist customers with the use of their products, including deployment and migration. It also offers phone and e-mail support.
That said, there is also a self-service component as its website has a detailed Support section answering many potential questions.
Key Activities
Cisco’s business model entails designing and developing its various lines of products. Actual manufacturing is outsourced to contract manufacturers, who offer services such as printed-circuit board assembly, product repair, and product assembly.
The company is not involved in long-term contracts with any particular provider, and it has the option of renewing its agreements on an as-needed basis.
Key Partners
Cisco offers two types of partner programs:
- Solution Partner Program: This program enables companies to integrate their solutions into Cisco’s technologies and architectures, and then sell these combined solutions to customers. Specific members include technology partners and independent software vendors. They fall into one of three tiers: Solution Partner, Preferred Solution Partner, and Strategic Solution Partner. Cisco provides these firms with marketing, technical, and sales resources.
- Channel Partner Program: This program enables companies to take Cisco’s products and services as is and then sell them to customers. Its members include systems integrators, resellers, service providers, and distributors. Distributors sell to resellers, systems integrators, and service providers. The latter two groups then sell directly to end users and typically provide support services. Cisco provides them all with a variety of resources as well to facilitate these transactions.
Key Resources
Cisco’s main resource is its research and development staff, whose members design and develop products and services for manufacture by contract companies.
It also has intellectual property in the form of proprietary software on memory chips used to configure products per customer needs.
Further, it relies heavily on sales/marketing staff for selling purposes and training staff to guide customers on how to use products.
Cost Structure
Cisco has a value-driven structure, placing an emphasis on quality and personal service as its employees have many interactions with customers.
Its biggest cost driver is sales/marketing expenses, a fixed cost. Other major drivers are in the areas of research and development and administration.
Revenue Streams
Cisco has two revenue streams:
- Products: These fall into the following categories: Switching, Next-Generation Network (NGN) Routing, Collaboration, Service Provider Video, Data Center, Wireless, Security, and Other Products.
- Services: These are offered along with products and include Strategy and Analysis, Assessment, Design, Validation, Deployment, Migration, Product Support, Solution Support, Optimization, and Operations Management.
