Security remains customers' number one concern, and Cisco Systems' top priority, according to CEO Chuck Robbins.
The comments surfaced on Wednesday during Cisco's Q4 2018 earnings call. The company showed strong momentum on multiple fronts during the period. For instance, during Q4 2018:
- Revenue was $12.85 billion, up nearly 6 percent and roughly $80 million stronger than Wall Street's expectations.
- Net income on a generally accepted accounting principles (GAAP) basis of $3.8 billion, up 57 percent from $2.4 billion in Q4 2017.
Moreover, the company's security revenues rose 12 percent with strong performance in network security, unified threat, policy and access, and web security, according to CFO Kelly Kramer.
Cisco Security's Market Footprint, Strategy
Cisco is the largest network and enterprise security company, Robbins asserts, with a focus across network, end point and cloud capabilities. He boiled down the company's security strategy in two concise points:
- The company simplifies and increases security efficacy through an architectural approach with products that work together and share analytics and actionable threat intelligence.
- The architecture is supported by Talos, one of the largest commercial threat intelligence teams in the world.
The recently announced Duo Security acquisition aligns with the strategy, and will "enhance how we deliver simple, automated, trusted access anywhere for our customers environments," he said
No doubt, channel partners and service providers play key roles in the company's security strategy. The company's Umbrella business, for instance, has a strong following among MSPs in the SMB sector. Moreover, a growing relationship with ConnectWise now involves MSP-centric security capabilities.
Cisco Channel Chief Wendy Bahr has been particularly vocal about security during recent partner conferences -- putting the topic front-and-center in many of her keynotes.
Still, competition in the security market remains fierce. In addition to traditional enterprise rivals, the company must face off against a growing list of cloud security upstarts that now offer MSP-centric dashboards.
Cisco's Overall Business Performance
Of course, Cisco is more than a security company. The company continues to push beyond traditional networking hardware toward software, applications, cloud services and other recurring revenue opportunities. The progress looks real, though the overall transition will require many years to play out.
Some of the Q4 2018 business and financial metrics included:
- Routing revenues declined slightly driven by weakness in service provider routing.
- Applications was up 10 percent in total with growth across all the businesses -- including unified communications, telepresence, conferencing, and AppDynamics.
- Service revenue was up 3 percent driven by growth in advanced services as well as software and solutions support.
- Recurring revenue was 32 percent of total revenue, up 1 point from Q4 2017.
- Revenue from subscriptions was 56 percent of Cisco's total software revenue, up five points year over year.
The recurring revenue emphasis could distance the company from traditional hardware rivals like Dell Technologies and HP Enterprise, both of have been somewhat slower to embrace recurring revenue business models.