December 09, 2012, 3:47 PM — Cisco, the quintessential IT hardware maker, wants you to start thinking about it as software and services company.
CEO John Chambers told analysts in New York today that the switch/router manufacturer that is also heavily invested in video and server gear that the company plans to double its revenues from software over the next five years from $6 billion to $12 billion, according to a Reuters report.
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Even so, the software will become just 25% of the company's revenues, which Chambers says will grow steadily at 5% to 7% per year long-term.
The majority of engineering done at Cisco is already software engineering, producing results that are bundled with hardware, according to slides accompanying his remarks to financial analysts.
Other software offerings are wrapped up with custom chips and services that result in intelligent IP networks, the slides say. The game plan calls for expanding software across the Cisco portfolio of switching, routing, cloud, data center, mobility, video, services and security, they say.
This includes its IOS software, its software defined network initiative, its Nexus OS, Star OS, WebEx, Call Manager, IronPort and ScanSafe platforms, according to the presentation.
Chambers says the company will move from its software defined network toward an application-centric intelligent network that can harvest data from networks, analyze it and create policies based on that analysis in order to improve network security and application performance.
That doesn't mean Cisco is abandoning its hardware past, just that software and the intelligence it brings to networks will play a stronger role.
That's necessary to bring about a change in how the company defines IT, from the study, design, development, application, implementation support or management of computer-based information systems to the same definition to something else by substituting the word "network" for "computer".
