Cisco to grow service
Cisco Systems Inc. chief executive John Chambers affirmed the company’s long-term revenue growth target of 5 per cent to 7 per cent as he expands software and services to lessen reliance on routers and switches.
Cisco, the world’s largest maker of computer networking equipment, is looking for new markets amid intensifying competition from rivals such as Juniper Networks Inc., HewlettPackard Co. and Arista Networks Inc. A central part of that effort has been the acquisition of software and services companies with strong recurring sales and profit margins.
Services will become a bigger part of Cisco’s revenue, reaching 25 per cent of sales, Chambers said Friday. That business accounted for 21 per cent of Cisco’s $46.1 billion in revenue in the last fiscal year. Cisco still intends to double its software revenue as well, Chambers said.
“We’ve gone too long without any major M&A,” Chambers said. “We got too slow. You’re going to see us be quicker.”