Cisco International Sales

Networking & Communication Systems Global Giant

Jan 25, 2007 Daniel Workman
Forget routers and switches. Cisco Systems' success as world network and Internet technology king is
best summarized by its slogan "Welcome to the Human Network."
With revenues of $US30 billion, Cisco Systems is the world's leading maker of network equipment that
powers the Internet.
Cisco's offers a vast portfolio of sophisticated computer networking devices including routers and
switches, which are key elements for voice, data and video communication. Routers forward computer
traffic from one network to another. Switches direct computer traffic within local area networks.
Cisco sells its network products primarily to large enterprises and telecommunications service providers.
The company also designs products for medium-sized and smaller businesses as well as consumers.
Commercial businesses with less than 1,000 employees became Cisco's fastest-growing market segment
in 2006.
Cisco’s business targets five trade theaters, namely:
• United States and Canada ... US$15.8 billion (55.4% of 2006 total net sales)
• European Markets ... $6.1 billion (21.4%)
• Asia Pacific ... $2.9 billion (10%)
• Emerging Markets ... $2.5 billion (8.7%)
• Japan ... $1.3 billion (4.5%)
Product revenue in the company’s Emerging Markets theater grew 37% from 2005, the highest annual
growth percentage of all five business segments. U.S. and Canada net sales were up 18.7%, Asia Pacific
net sales rose 14.8%, while European figures increased 6.8%. Japanese net sales were down 15.1% in
2006.
And The Winner Is ...
Last year, Cisco executives travelled around the world to meet with government leaders
in India, China, Germany, Saudi Arabia and Russia. Cisco's strategy is to serve as a global technology
partner, helping countries develop stronger economies through improved Internet access to education,
healthcare and business opportunities.
For first quarter 2007, Cisco's net sales were up 24.9% from the prior year. Net income rose 27.5% while
earnings per share jumped 30%.
Success didn't come without controversy. Cisco supplied the Chinese government with network
equipment used to block Internet access to websites that the regime frowns on. Cisco explains that it sells
the same equipment in China as it sells worldwide, and does not develop filtering technologies to block
information access.
Instead, the company is focused on developing networking equipment to keep up with demand caused by
the highly competitive and fast-paced war between telecommunications companies and cable providers.
Sources: Hoovers.com
Copyright Daniel Workman. Contact the author to obtain permission for republication.

Cisco International Sales

Networking & Communication Systems Global Giant
Jan 25, 2007 Daniel Workman
Forget routers and switches. Cisco Systems' success as world network and Internet technology king is
best summarized by its slogan "Welcome to the Human Network."
With revenues of $US30 billion, Cisco Systems is the world's leading maker of network equipment that
powers the Internet.
Cisco's offers a vast portfolio of sophisticated computer networking devices including routers and
switches, which are key elements for voice, data and video communication. Routers forward computer
traffic from one network to another. Switches direct computer traffic within local area networks.
Cisco sells its network products primarily to large enterprises and telecommunications service providers.
The company also designs products for medium-sized and smaller businesses as well as consumers.
Commercial businesses with less than 1,000 employees became Cisco's fastest-growing market segment
in 2006.
Cisco’s business targets five trade theaters, namely:
• United States and Canada ... US$15.8 billion (55.4% of 2006 total net sales)
• European Markets ... $6.1 billion (21.4%)
• Asia Pacific ... $2.9 billion (10%)
• Emerging Markets ... $2.5 billion (8.7%)
• Japan ... $1.3 billion (4.5%)
Product revenue in the company’s Emerging Markets theater grew 37% from 2005, the highest annual
growth percentage of all five business segments. U.S. and Canada net sales were up 18.7%, Asia Pacific
net sales rose 14.8%, while European figures increased 6.8%. Japanese net sales were down 15.1% in
2006.
And The Winner Is ...
Last year, Cisco executives travelled around the world to meet with government leaders
in India, China, Germany, Saudi Arabia and Russia. Cisco's strategy is to serve as a global technology
partner, helping countries develop stronger economies through improved Internet access to education,
healthcare and business opportunities.
For first quarter 2007, Cisco's net sales were up 24.9% from the prior year. Net income rose 27.5% while
earnings per share jumped 30%.
 Success didn't come without controversy. Cisco supplied the Chinese government with network
equipment used to block Internet access to websites that the regime frowns on. Cisco explains that it sells
the same equipment in China as it sells worldwide, and does not develop filtering technologies to block
information access.
Instead, the company is focused on developing networking equipment to keep up with demand caused by
the highly competitive and fast-paced war between telecommunications companies and cable providers.
Sources: Hoovers.com
Copyright Daniel Workman. Contact the author to obtain permission for republication.

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An 8-step
strategy
for small
businesses
to get
internation
al clients
Get Past Language Barriers To Get International Clients
by CINDY on 8 AUGUST, 2008

Different businesses go about developing their international business at different

speeds. Several early reasons come in to play. The main reasons are:

 Your own visibility and understanding of your international potential

 Deciding what product to market abroad
 Finding your international markets
Your budget and manpower resources also have a direct influence on how you go about
the process of developing your international markets.

Getting Stuck In Language Barriers

Language barriers often come up immediately and stop or delay most small businesses
from developing internationally.

When a small business owner is confronted with different languages, he has two choices:
 Stop all international business development
 Learn to work with the different languages
Usually, the small business owner has already heard of:

 The horror stories of cultural blunders

 The high cost of translations
The natural reaction for a small business owner is then to wonder exactly how he can get
international clients:

 Without translations?
 With an English website?
 Keeping control in his own office?
An international English website can be a short-term international development
solution. This can work well if your business is mainly export based for example.
Avoiding foreign language communication is not an effective long-term solution for
most international businesses.

You will develop your international business to its fullest if you write specifically to each
culture you sell to. Different cultures have different sales triggers. They also have
different consumer habits.

Large global businesses have already done the groundwork and learned their individual
cultural markets. You need to find out what makes your international markets tick. You
need to fully understand what makes your international clients buy from you.
International Market Research
You need to conduct international field research for best results. This brings up the
language barriers again. Outsourcing this research increases risk. It is best to do as
much international market research as you can in-house.
Free translation tools can get small businesses started with their international market
research. Even if the translations are not error-free, the translations will give you
enough information to use to follow up with more in-depth phone research.

A free translation widget on your website will also incite your foreign visitors to interact
with you, which is another great source of international market research. A free
translation widget on your website is good because:

 It tells your visitors you want international business

 It gives your readers the chance to get to know something about you

International Visibility
Your visibility in foreign markets will increase. If your web marketing brings visitors to
your website, you want to make it easy for all of your visitors to understand it.

What can you do if your business cannot afford translations yet, or if you do not know
where your international potential is?

A free translation widget on your website will grab the attention of those non-native
English speakers whose language skills are not good enough to want to read your
website. A quick translation, even if it is not perfect will help them to understand your
website. They will probably return to your original English text.

Professional translators often point out that free translations do not provide good sales
copy. And they are right. International sales copy written by humans will give you the
best sales results in your international markets.
Should a company that wants international sales sit around and wait until it has enough
money to pay for human translations?
No. There is a place for international sales copy, human translations and free
translations.

International Marketing
Now let us hear from the professional marketers that track and test results. Will a free
translation widget attract more international leads?

I can only answer for my business. The translation widget on my websites has
stimulated interaction with international visitors who would not have contacted me
otherwise.

Some respond to me in their own language. Many respond in broken English. And it is a
pleasure to see the response.

My experience is that most international online visitors know they cannot expect
accurate translations with free translation tools.

Most people use them to try to understand text they were stuck on without the
translation tool. This is great because these visitors would otherwise immediately leave
your website when they do not understand something.

If you are a businessperson or a marketer, you know you have to adapt your
communication to your market. You will need to adjust your international
communication by:

 The language
 Its message – cultural differences will affect your USP and sales pitch
This last point in itself answers the question about using free translation tools or not. It
also highlights the need for extensive international market research – to find the key
message you should use in your international sales communication.
When A Free Translation Tool Helps You
A free translation widget is a great tool to start your international business development.
Use it for:

 Extensive international market research –cross-reference this with international phone

research
 Your domestic market website or an international website – especially if you are only in the
Export Marketing phase of your international business development.
As soon as you have learned enough about one specific international market, and done a
viability market analysis:

 Plan to reinvest the profit from your first international sales to buy international sales
copyand create culture specific websites and marketing plans.
Language barriers, and cultural barriers, will always exist in an international business.
You will have to learn how to deal with different languages and different markets, until
the barriers fade away. Different languages and different cultures will simply become
part of your international business.

Need an easy International Sales Road Map to develop your international business?
Then sign up for the Get International Clients weekly newsletter.
Don’t miss the G

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Cisco Systems, Inc.

Address:
170 West Tasman Drive
San Jose, California 95134-1706
U.S.A.

Telephone: (408) 526-4000

Toll Free: 800-553-6387
Fax: (408) 526-4100
http://www.cisco.com

Statistics:
Public Company
Incorporated: 1984
Employees: 26,140
Sales: $12.15 billion (1999)
Stock Exchanges: NASDAQ
Ticker Symbol: CSCO
NAIC: 334210 Telephone Apparatus Manufacturing; 334418 Printed Circuit Assembly (Electronic Assembly)
Manufacturing; 334419 Other Electronic Component Manufacturing; 511210 Software Publishers; 541512 Computer
Systems Design Services

Company Perspectives:

Cisco is better positioned than ever before to lead the Internet economy and help change the way we work, live,
play, and learn.

Key Dates:

1984: Cisco Systems, Inc. is founded by Leonard Bosack and Sandra Lerner.
1986: Company ships its first product, a router for the TCP/IP protocol suite.
1988: Donald T. Valentine, a venture capitalist, gains control of the company; John Morgridge is named president
and CEO.
1990: Company goes public; Lerner is fired and Bosack quits.
1993: Cisco completes its first acquisition, that of Crescendo Communications.
1994: Revenues exceed $1 billion for the first time.
1995: John T. Chambers is named CEO.
1996: Company acquires StrataCom, Inc., maker of switching equipment, for $4.67 billion.
1998: Cisco's market capitalization passes the $100 billion mark.
1999: Company acquires 17 businesses, including: GeoTel Communications Corp., a maker of software for routing
telephone calls, for $1.9 billion; Cerent Corporation, maker of fiber-optic networking equipment, for $7.2 billion;
Aironet Wireless Communications Inc., maker of wireless LAN equipment, for $800 million; and the fiber-optic
telecommunications equipment business of Italy's Pirelli S.p.A. for about $2.2 billion.
2000: Company's market capitalization reaches $450 billion.

Company History:

Cisco Systems, Inc. is the world's leading supplier of computer networking products, systems, and services. The
company's product line includes routers, switches, remote access devices, protocol translators, Internet services
devices, and networking and network management software, all of which link together geographically dispersed
local area networks (LANs), wide area networks (WANs), and the Internet itself. Cisco serves three main market
segments: large organizations--including corporations, government entities, utilities, and educational institutions--
needing complex networking solutions that typically bridge multiple locations; service providers, including Internet
access providers, telephone and cable companies, and providers of wireless communications; and small and
medium-sized businesses whose needs include operating networks, connecting to the Internet, and/or connecting
with business partners. The company is increasingly developing expertise in the area of fiber-optic networking as
well as the concomitant expertise in multiservice networks, which offer video and voice capabilities in addition to
the traditional data capability.
Beginnings in Multiprotocol Routers
Cisco Systems was founded in December 1984 in Menlo Park, California, by a husband and wife team from Stanford
University, Leonard Bosack and Sandra Lerner. Bosack was the manager of the computer science department's
laboratory, and Lerner oversaw the computers at the graduate school of business. At Stanford, Bosack devised a
way to connect the two local area networks in the respective departments where he and his wife worked, 500
yards across campus.
Lerner and Bosack initially tried to sell the internetworking technology that Bosack had developed to existing
computer companies, but none were interested. They then decided to start their own business, Cisco Systems,
based on this technology (they came up with the name, a shortened form of San Francisco, while driving across the
Golden Gate Bridge). Bosack and Lerner were joined by colleagues Greg Setz, Bill Westfield, and Kirk Lougheed, as
cofounders. Stanford University later tried to obtain $11 million in licensing fees from the new company, because
Bosack had developed the technology while an employee at the university, but eventually the university settled for
$150,000 and free routers and support services.
The company was established on a very tight budget. In fact, Bosack and Lerner had to mortgage their house, run
up credit card debts, and defer salaries to their friends who worked for them in order to get the venture off the
ground, and, even after two years of business, Lerner maintained an outside salaried job to supplement the
couple's income.
Cisco's primary product from the beginning was the internetworking router, a hardware device incorporating
software that automatically selects the most effective route for data to flow between networks. Cisco's routers
pioneered support for multiple protocols or data transmission standards, and could therefore link together
different kinds of networks, those having different architectures and those built on different hardware, such as
IBM-compatible personal computers, Apple Macintosh computers, UNIX workstations, and IBM mainframes. Cisco
thus became the first company to commercially provide a multi-protocol router when it shipped its first product in
1986, a router for the TCP/IP (Transmission Control Protocol/Internet Protocol) protocol suite. A year later, Cisco
was selling $250,000 worth of routers per month. Sales for the fiscal year ending July 1987 were $1.5 million, and
the company had only eight employees at the time.
Cisco initially marketed its routers to universities, research centers, the aerospace industry, and government
facilities by contacting computer scientists and engineers via ARPANET, the precursor to what was later known as
the Internet. These customers tended to use the TCP/IP protocols and UNIX-based computers. In 1988, the
company began to target its internetworking routers at mainstream corporations with geographically dispersed
branches that used different networks. To that end, Cisco developed routers serving an even greater array of
communications protocols and subsequently distinguished its routers by enabling them to support more protocols
than those of any other router manufacturer. By the late 1980s, when the commercial market for internetworking
began to develop, Cisco's reasonably priced, high-performance routers gave it a head start over the emerging
competition.
Although Cisco had a high rate of sales growth, the young company was still short of cash; in 1988 Bosack and
Lerner were forced to turn to a venture capitalist, Donald T. Valentine of Sequoia Capital, for support. Valentine,
however, required that the owners surrender to him a controlling stake in the company. Valentine thus became
chairperson and then hired an outsider, John Morgridge, as the company's new president and chief executive
officer. Morgridge, who had an M.B.A. from Stanford University, was chief operating officer at laptop computer
manufacturer GRiD Systems Corp. and prior to that had spent six years as vice-president of sales and marketing at
Stratus Computer. Morgridge replaced several Cisco managers, who were friends of Bosack and Lerner, with more
qualified and experienced executives. In February 1990, Cisco went public, after which Bosack and Lerner began
selling their shares. Sales for the fiscal year ending July 1990 were $69.8 million, net income was $13.9 million,
and the company had 254 employees.
Under Morgridge, Bosack had been given the title of chief scientist and Lerner was made head of customer service.
However, Lerner reportedly did not get along well with Morgridge and, in August 1990, she was fired, whereupon
Bosack also quit. When they left the company, Bosack and Lerner sold the remainder of their stock for $100
million, for a total divestiture of about $200 million. The couple subsequently gave away the majority of their
profits to their favorite charities.
Early 1990s: Rapid Growth As Networks Proliferate
Meanwhile, Morgridge built up a direct sales force to market the products to corporate clients. At first, Cisco's
corporate clients were the scientific departments of companies which already maintained large internal networks.
Later, Cisco was able to market its products to all kinds of major corporations to help them link the computer
systems of their headquarters, regional, and branch offices. As Cisco's client base grew, the company's greatest
challenge became meeting customer support service needs. The large size of the network systems for which Cisco
supplied products made the user support task especially complex.
The company grew at a tremendous rate as its market rapidly expanded. In the early 1990s, companies of all sizes
were installing local area networks (LANs) of personal computers. As such, the potential market for linking these
networks, either with each other or with existing minicomputers and mainframe computers, also grew. Cisco's
sales jumped from $183.2 million in fiscal 1991 to $339.6 million in 1992, and net income grew from $43.2 million
to $84.4 million during the same period. In 1992, Fortune magazine rated Cisco as the second fastest growing
company in the United States. In its role as the leading internetworking router provider, Cisco could redefine and
expand the market as it grew.
While new communications technologies became widespread, Cisco adapted and added the capabilities of handling
new protocols to its products. In the fall of 1992, Cisco introduced Fiber Distributed Data Interface (FDDI) and
Token-Ring enhancements to its high-end router. Around the same time, the company also introduced the first
Integrated Services Digital Network (ISDN) router for the Japanese market.
Until 1992, Cisco's products had not addressed IBM's System Network Architecture (SNA), a proprietary network
structure used by IBM computers. In September 1992, however, after IBM announced plans to license its Advanced
Peer-to-Peer Networking (APPN) protocol used for SNA, Cisco responded by announcing plans for a rival Advanced
Peer-to-Peer Internetworking (APPI) protocol for supporting SNA. By August 1993, Cisco had decided not to develop
a rival protocol, because IBM made it clear that APPN would be a more open, multivendor protocol than originally
intended. Cisco then proceeded to work with IBM on further defining the APPN standard and bought a license to
use APPN technology.
The emergence of asynchronous transfer mode (ATM) technology as a new standard method for multiprotocol data
communications posed a challenge to Cisco and the router industry. ATM is a cell-switching technique that can
provide high-speed communications of data, voice, video, and images without the use of routers. In early 1993,
Cisco entered into a joint development project with AT & T and StrataCom to develop standards that would ensure
that ATM operated within existing Frame Relay networks. Cisco also became one of the four founding members of
the ATM Forum to help define the emerging standard. In February 1993, Cisco announced a strategy to include ATM
among the protocols supported by its products. In fiscal 1994, Cisco introduced its first ATM switch.
In January 1993, Cisco introduced a new flagship product, the Cisco 7000 router, which featured a 50 percent
improvement in performance over the AGS+, Cisco's existing high-end router. In June of that year, Cisco
introduced a new low-end, lower-priced product line, the Cisco 2000 router family. The Cisco 2000 was aimed at
companies desiring to link their smaller, remote branches or even remote individual employees, but unwilling to
pay a premium price. Also during this time, the first network with over 1,000 Cisco routers was created.
International sales became an important part of Cisco's business. Subsidiaries were established in Japan and
Australia, and a European Technical Assistance Center was established in Brussels, Belgium. In March 1993, Cisco
Systems (HK) Ltd. became a new subsidiary in Hong Kong. International sales steadily increased, accounting for
35.6 percent of sales in fiscal 1991, 36 percent in fiscal 1992, 39 percent in fiscal 1993, and 41.9 percent in fiscal
1994. Most of Cisco's international sales were through distributors, whereas in the United States the majority of
sales (65 percent in early 1994) were made directly to the end users.
Cisco also began to market its technology, especially its software, more aggressively to long-distance telephone
companies, as the deregulation of U.S. telephone carriers enabled these companies to provide more kinds of data
communications products and services. For example, Cisco entered into a joint marketing agreement with MCI
International to integrate Cisco's routers into end-to-end data networks over telephone lines. In 1992, Cisco
entered new distribution agreements with Bell Atlantic Corp. and U.S. West Information Systems Inc. Cisco also
signed marketing agreements in fiscal 1993 with Pacific Bell, whereby Cisco became a preferred router supplier for
the company's network systems.
Cisco similarly began contracting with major European telecommunications companies at about the same time.
British Telecom became an original equipment manufacturer (OEM) client of all of Cisco's products. Other
European telecommunications companies that entered into OEM relationships with Cisco included Alcatel of France
and Siemens A.G. of Germany. Olivetti of Italy agreed to market Cisco's products under a value-added reseller
agreement late in 1992.
Cisco made other strategic alliances to position itself better in the maturing internetworking market. To reach out
to less technical clients, Cisco entered into joint agreements with Microsoft Corporation to market Cisco's first PC-
based router card with Microsoft's Windows NT Advanced Server networking software through Microsoft's marketing
channels. Similarly, Cisco established a partnership with Novell to integrate Cisco's routers with Novell's Netware
network software so as to provide links between Netware and UNIX-based networks. Additionally, Cisco began
working with LanOptics Ltd. to develop remote-access products.
1993-94: First Wave of Acquisitions
In September 1993, Cisco made its first acquisition. For $95 million, it acquired Crescendo Communications, which
had pioneered products for a new technology called Copper Distributed Data Interface (CDDI). Crescendo's
development of ATM technology was also a leading reason for the acquisition. Crescendo Communications was
renamed the Workgroup Business Unit, and its switching technologies under development were later incorporated
into Cisco's routers. Cisco made its second acquisition, that of Newport Systems Solutions for $93 million in stock,
in August 1994. Newport Solutions sold the LAN2LAN product line, software used in linking local area networks.
Early in 1994, Cisco announced a new networking architecture, CiscoFusion, to provide clients with a gradual
transition from routers to the new switched networking technologies of ATM and LAN switching. CiscoFusion
allowed users to take advantage of both routing and switching techniques. As part of this architecture, several new
switching products were introduced in March 1994, including the ATM Interface Processor and the Catalyst FDDI-to-
Ethernet LAN switch. The latter was the first new product of the Workgroup Businesses Unit since the acquisition
of Crescendo.
During this time, Cisco moved its headquarters from one end of Silicon Valley to the other, from Menlo Park to a
newly constructed office building complex in San Jose, California. The growing size of the company had
necessitated larger office space. The company's workforce had grown from 1,451 in July 1993 to 2,262 in July
1994, as Cisco hired talent from smaller, struggling networking companies which were laying off personnel. In
fiscal 1994, Cisco topped $1 billion in sales, ending the year on July 31, 1994, with $1.24 billion in net sales, a 92
percent increase over the previous year, and $314.9 million in net income, 83 percent more than fiscal 1993. Later
in 1994, in October, Cisco completed two more acquisitions of firms involved in the switching sector. It spent $240
million for Kalpana, Inc., a maker of Ethernet switching products; and $120 million for LightStream Corp., which
was involved in ATM switching and Ethernet switching and routing.
Astounding Growth Under John Chambers Starting in 1995
In January 1995 John T. Chambers was named CEO of Cisco, with Morgridge becoming chairman and Valentine vice-
chairman. Chambers, who had previous stints at IBM and Wang Laboratories before joining Cisco in 1991, stepped
up the company's acquisition pace to keep ahead of its rivals and to fill in gaps in its product line, aiming to
provide one-stop networking shopping to its customers. The company completed 11 acquisitions in 1995 and 1996,
including Grand Junction, Inc., maker of Fast Ethernet and Ethernet switching products, purchased for $400 million
in September 1995; and Granite Systems Inc., a maker of high-speed Gigabit Ethernet switches, bought for $220
million in September 1996. The largest deal during this period, however, was that of StrataCom, Inc., a $4.67
billion acquisition completed in April 1996. StrataCom was a leading supplier of ATM and Frame Relay WAN
switching equipment capable of handling voice, data, and video. The addition of Frame Relay switching products
to the Cisco portfolio was particularly important as that technology was being rapidly adopted by
telecommunications companies needing to increase the capacity of their networks. The deal was also a key step in
Cisco's attempt to move beyond its core customer area of 'enterprise' customers--i.e., large corporations,
government agencies, utilities, and educational institutions--into the area of telecommunications access providers,
an area in which it faced entrenched and formidable competition in the form of such giants as Alcatel, Lucent
Technologies Inc., and Nortel Networks Corporation.
Cisco continued its blistering acquisitions pace in 1997 and 1998, completing 15 more deals. The largest of these
was the April 1998 purchase of NetSpeed, Inc., a specialist in digital subscriber line (DSL) equipment, an emerging
technology providing homes and small offices with high-speed access to the Internet via existing telephone lines.
Another emerging networking technology was that of voice-over-IP (Internet Protocol), which essentially enables
the routing of telephone calls over the Internet. The acquisitions of LightSpeed International, Inc. in April 1998
and Selsius Systems, Inc. in November 1998 helped Cisco gain a significant presence in the Internet telephony
sector. The areas of DSL and voice-over-IP provided additional examples of Cisco's strategy of acquiring its way
into emerging networking sectors.
By the late 1990s Cisco Systems was the undisputed king of the networking world. In July 1998 the company's
market capitalization surpassed the $100 billion mark, just 12 years after its initial public offering--a time frame
believed to be a record for achieving that level. Revenues reached $12.15 billion by fiscal 1999, a more than
sixfold increase over the fiscal 1995 result of $1.98 billion. During 1999 Cisco became even more acquisitive,
snatching up an additional 17 companies, in the process gaining presences in two more emerging areas: fiber-optic
networking and wireless networking. Several fiber-optic companies were acquired, including start-up Cerent
Corporation, which was purchased for about $7.2 billion in the company's largest acquisition yet. Fiber-optic
networks were particularly being built by telecommunications firms aiming to take advantage of their capacity for
handling massive quantities of voice, video, and data, making Cisco's entry into this segment of vital importance.
In late 1999 Cisco announced that it would acquire the fiber-optic telecommunications equipment business of
Italy's Pirelli S.p.A. for about $2.2 billion, gaining Pirelli gear that takes a beam of light and breaks it into as many
as 128 'colors,' each of which can carry a separate stream of voice, data, or video. Cisco's key wireless acquisition
also came in late 1999 with the announcement of the $800 million purchase of Aironet Wireless Communications,
Inc., maker of equipment that creates LANs without wires in small and medium-sized businesses. The technology
was also expected to be transferred to the home environment, where Cisco aimed to capture what was predicted
to be an area of rapid early 21st century growth: the networked home. During 1999 Cisco also acquired GeoTel
Communications Corp., a maker of software for routing telephone calls, for about $1.9 billion.
By early 2000--following 1999's frenzied bull market in high-tech stocks--Cisco's market value surpassed $450
billion, making it the third most valuable company in the world, behind Microsoft and General Electric Company
(for a brief period in late March, Cisco actually ranked as the most valuable company in the world, with a total
market capitalization of $555 billion). Revenues were soaring, as were earnings, which reached $906 million for
the second quarter of the 2000 fiscal year alone. Rather than slowing it down, Chambers planned to increase the
company's acquisition pace, with the addition of as many as 25 companies during 2000. Through acquisitions and
through strategic alliances with such industry giants as Microsoft, Hewlett-Packard Company, and Intel
Corporation, Chambers aimed to increase Cisco Systems' revenues to $50 billion by 2005. Cisco's presence in nearly
every networking sector, the speed with which it typically entered emerging areas, and its proven ability to absorb
and expand acquired companies provided evidence that the company was likely to reach this lofty goal and to
continue in its role as the undisputed leader of the networking equipment industry.
Principal Subsidiaries: Cisco Systems Canada Limited; Cisco Systems Europe, S.A.R.L. (France); Cisco Systems
Import/Export Corporation (U.S. Virgin Islands); Cisco Systems Belgium, S.A.; Cisco Systems Limited (U.K.); Cisco
Systems Australia PTY. Limited; Nihon Cisco Systems, K.K. (Japan); Cisco Systems de Mexico, S.A. de C.V.; Cisco
Systems New Zealand Limited; Cisco Systems (HK) Limited (Hong Kong); Cisco Systems GmbH (Germany); Cisco
Systems (Italy) Srl; Cisco Systems GmbH (Austria); Cisco do Brasil Ltda. (Brazil); Cisco Systems (Korea) Ltd.; VZ,
Cisco Systems, C.A. (Venezuela); Cisco Systems South Africa (Pty) Ltd.; Cisco Systems Sweden Aktiebolag; Cisco
Systems (Switzerland) AG; Cisco Systems Capital, B.V.; Cisco Systems International Netherlands, B.V.; Cisco
Systems Czech Republic, s.r.o.; Cisco Systems Spain, S.L.; Cisco Systems Argentina S.A.; Cisco Systems Chile, S.A.;
Cisco Sistemas de Redes S.A. (Costa Rica); Cisco Systems Malaysia, Sdn. Bhd.; Cisco Systems (USA) Pte. Ltd.,
Singapore; Cisco Systems Thailand, Ltd.; Cisco Systems Peru, S.A.; Cisco Systems Greece, S.A.; Cisco Systems
Poland, Sp.zo.o; Cisco Systems Israel, Ltd.; Cisco Systems Internetworking Iletsim Hizmetlieri Ltd. Sirketi (Turkey);
Cisco Systems (India), Ltd.; Cisco Systems Capital Corp.; Cisco Systems (Taiwan), Ltd.; Cisco Systems (Colombia),
Ltda; Cisco Technology, Inc.; Cisco Systems Sales & Service, Inc.; Cisco Systems Co. (Canada); Telebit Corporation;
Cisco Systems Danmark AS; Cisco Systems Norway AS; Cisco Systems Hungary, Ltd.; Cisco Systems Management
B.V.; Cisco Systems (Puerto Rico) Corp.; Cisco Systems Finland Oy; Cisco Systems (China) Networking Technologies
Ltd.; Cisco Systems Romania SRL; Cisco Systems Croatia Ltd. for Trade; Cisco Systems Slovakia, spol. sr.o.
Principal Competitors: ADC Telecommunications, Inc.; Alcatel; Cabletron Systems, Inc.; Compaq Computer
Corporation; D-Link Corporation; ECI Telecom Ltd.; Fujitsu Limited; Hewlett-Packard Company; Intel Corporation;
International Business Machines Corporation; Juniper Networks, Inc.; Kingston Technology Company; Lucent
Technologies Inc.; Madge Networks N.V.; Microsoft Corporation; Motorola, Inc.; MRV Communications, Inc.; NEC
Corporation; Network Associates, Inc.; Newbridge Networks Corporation; Nokia Corporation; Nortel Networks
Corporation; Novell, Inc.; Sterling Software, Inc.; Telefonaktiebolaget LM Ericsson; 3Com Corporation.

Further Reading:

Baker, Stephen, 'Cisco's Telecom Two-Step in Europe,' Business Week (international edition), October 11, 1999.
Baum, Geoff, 'John Chambers,' Forbes ASAP, February 23, 1998, pp. 52-53+.
Byrne, John A., 'The Corporation of the Future,' Business Week, August 31, 1998, pp. 102+.
Carlsen, Clifford, 'Rolling on the Info Superhighway,' San Francisco Business Times, August 20, 1993, p. 6A.
Carroll, Paul B., 'Cisco Systems Will Acquire StrataCom, Computer Switch Maker, for $4 Billion,' Wall Street
Journal, April 23, 1996, p. A3.
Clark, Don, 'Cisco Is Buying GeoTel for $1.92 Billion in Stock,' Wall Street Journal, April 14, 1999, p. A3.
Daly, James, 'John Chambers: The Art of the Deal,' Business 2.0, October 1999.
Donnelly, George, 'Acquiring Minds: Cisco and Lucent Buy into the Telecom Revolution with Strategies That Clash
and Converge,' CFO Magazine, September 1999.
Emigh, Jacqueline, 'Cisco Unveils ATM Interfacing Router,' Telephony, February 1, 1993, pp. 24+.
Goldblatt, Henry, 'Cisco's Secrets,' Fortune, November 8, 1999, pp. 177-78+.
Gomes, Lee, 'Cisco Tops $100 Billion in Market Capital,' Wall Street Journal, July 20, 1998, p. B5.
Hutheesing, Nikhil, and Jeffrey Young, 'Curse of the Market Leader,' Forbes, July 29, 1996, pp. 78+.
Kupfer, Andrew, 'The Real King of the Internet,' Fortune, September 7, 1998, pp. 84-86+.
Mardesich, Jodi, 'Cisco's Plan to Pop Up in Your Home,' Fortune, February 1, 1999, pp. 119-20.
Musich, Paula, 'Cisco Chief Plots Router Course: Outlines Plans for ATM Technology,' PC Week, September 13, 1993,
pp. 49+.
------, 'Cisco Revamps Router Strategy: Shifts Product, Distribution Tactics for Maturing Market,' PC
Week, November 22, 1993, p. 123.
------, 'Cisco, Wellfleet Ride Router Market to Success,' PC Week, December 14, 1992, pp. 163+.
Osterland, Andrew, 'No Kidding. Cisco Isn't Done Yet,' Financial World, January 21, 1997, pp. 62-64, 66.
Pitta, Julie, 'Long Distance Relationship,' Forbes, March 16, 1992, pp. 136+.
Reinhardt, Andy, 'Meet Mr. Internet,' Business Week, September 13, 1999, pp. 128-31+.
Reinhardt, Andy, Peter Burrows, and Amy Barrett, 'Cisco Crunch Time for a High-Tech Wiz,' Business Week, April
28, 1997, pp. 80+.
Schlender, Brent, 'Computing's Next Superpower,' Fortune, May 12, 1997, pp. 88-90+.
Schonfeld, Erick, 'Cisco and the Kids: Are They As Scary As They Look?,' Fortune, April 14, 1997, pp. 200-202.
Thurm, Scott, 'Cisco to Acquire Networking Firm Cerent,' Wall Street Journal, August 26, 1999, p. A3.
------, 'For Cisco, Focus on Small Companies Pays Off,' Wall Street Journal, May 27, 1999, p. B8.
------, 'Joining the Fold: Under Cisco's System, Mergers Usually Work; That Defies the Odds,' Wall Street
Journal, March 1, 2000, pp. A1, A12.
Thurm, Scott, and Deborah Ball, 'Cisco to Buy a Pirelli Unit for $2 Billion,' Wall Street Journal, December 20, 1999,
p. A3.
Tully, Shawn, 'How Cisco Mastered the Net,' Fortune, August 17, 1998, pp. 207-8, 210.

Source: International Directory of Company Histories, Vol. 34. St. James Press, 2000.
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he History of Cisco
Cisco Systems, Inc. is a multinational corporation with over 66,000 employees with annual revenue of US$39
billion as of 2008. Their Headquarters are in San Jose, Ca., Cisco Systems designs and sells communications
and networking technology as well as services. Sandy Lerner and Len Bosack, a married couple who worked
as computer operations staff for Stanford University, joined by Richard Troiano, began Cisco Systems in 1984.
Lerner moved on to a director’s position for computer services at Schlumberger, going full time with Cisco in
1987.
Cisco’s name is derived from the city San Francisco. Cisco may not be the first company to sell commercial
routers supporting many network protocols, but today Cisco's routers are used to deliver a magnitude of
technologies through corporate, enterprise and service provider networks. The company was listed in the
Nasdaq stock exchange in 1990. Lerner was subsequently fired because of this and Bosack quit the company
but not before receiving $200 million. The majority of these profits were given to charities.
Cisco obtained a range of companies to enlist talent and innovation. A few acquisitions, like Stratacom, were
the largest deals ever when they occurred. While the Internet boom was happening in 1999, the company
obtained Cerent Corp., a start-up company in Petaluma, California, for around seven billion dollars. It was the
most costly acquisition achieved by Cisco until then. Since that time, only Cisco's acquisition of Scientific-
Atlanta has been larger. Not all acquisition is an achievement but Cisco has more often succeeded in
 integrating and expanding the revenue of its acquisitions than its competitors. Several companies have grown
into $1 billion plus business units for Cisco.
In March 2000, at the apex of the dot-com craze, Cisco was by far the most valued company worldwide, with a
market capitalization of more than $500 billion. CISCO has been voted stock of the decade on NASDAQ. Cisco
began marketing technology, especially its software, more adamantly to long distance telephone companies,
and due to the deregulation of U.S telephone carriers the companies were able to provide more types of data
communications services and products. A prime example of this was when Cisco entered a marketing
agreement with MCI International to integrate Cisco’s routers for the end to end data networks over telephone
lines. Bell Atlantic Group, U.S. West Information Systems Inc. and Cisco entered new distribution agreements
in 1992. In 1993 Cisco signed marketing agreements with Pacific Bell. This is how Cisco became a preferred
router supplier for the company’s network systems.
Cisco also began contracting with European telecommunications companies at about this time. British Telecom
became an original equipment manufacturer (OEM) client for all of Cisco's products. Other European
telecommunications companies that entered into OEM relationships with Cisco were Alcatel of France and
Siemens A.G. of Germany. Cisco made other alliances to align itself in the growing internet working market.
Reaching out to less technical clients, Cisco began a joint agreement with Microsoft Corporation to market
Cisco's first PC-based router card coupled with Microsoft's Windows NT Advanced Server networking software
through the Microsoft marketing channels and products. By early 2000, Cisco was the third most valuable
company in the entire world, ranking just behind Microsoft and General Electric Company. There was a short
time in March of 2000 when Cisco actually ranked as the most valuable company worldwide, reaching a total
market capitalization of $555 billion.

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Cisco Bolstering its Global Strategy, Investments

Wim Elfrink discusses Cisco's efforts in "globalising the corporate brain"
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October 29, 2007

It's one thing to talk about the global economy. It's another to live it. But that's exactly what
Cisco System's first-ever chief globalisation officer is doing. Wim Elfrink moved to Bangalore,
India, at the beginning of this year to help oversee Cisco's $1.1 billion investment in the country
and the construction of the company's first "globalisation centre." From India, Elfrink leads
Cisco's efforts to decentralize many of the ways the company conducts business worldwide,
what he calls the "globalisation of the corporate brain."
News@Cisco recently spoke with Elfrink about Cisco's new approach to its worldwide business
operations and the promise of the global economy. The following text is modified from a recent
News@Cisco podcast with Elfrink.
What economic and business trends are influencing Cisco's efforts to extend the company's global
activities?
Wim Elfrink: Well, first, we knew we needed to improve ways we reached other parts of the world
beyond the traditional market areas such as Western Europe and Japan. India, China, and other
"emerging markets" countries, ranging from Poland to Brazil, are undergoing dramatic change
and modernization, especially regarding technology and their workforces. Most of these
countries are growing far more quickly than traditional markets. Two hundred million people will
be urbanized over the next five years and most of that will take place in emerging markets.
These markets are particularly promising because almost everything is "greenfield"-that is there
is very little existing IT infrastructure. For Cisco, this means that these countries need new soup-
to-nuts networks to take advantage of Internet communications and the economic and social
benefits that come with them. So, having customers without existing systems to integrate is an
opportunity for us to co-create new solutions.
But these countries do not just offer promising opportunities. They also provide sources of much
needed talent. By investing and setting up more substantial operations in these countries-by
moving closer to these areas--we feel we will be in a better position to recruit the best
networking talent in the world. And the gap for talent is huge. Just in India, Cisco and other IT
companies are planning to hire thousands of workers over the next few years. So competition is
fierce for the best of these employees.
What are some of the tangible goals for your group, particularly at the Globalisation Centre in India?
Wim Elfrink: We are basically working off a three-year plan. Now we are in year one. Over the
next three to five years we want to have 20 percent of our best talent, or about 10,000 people,
here in India at our Globalisation Centre. This is not outsourcing but full company operations,
with crucial management and logistical responsibilities. Some employees will come from our
existing operations in California or elsewhere but a big chunk of those will be employees
recruited locally.
Another important goal for our globalisation plan is to further our government relations. Many
emerging countries like to work in private/public partnerships. So it is imperative that we build
close relationships with these governments. Along with government relations, we also must
build partnerships with businesses.
What are some of the key benefits of physically being in a location such a Bangalore rather than simply
managing things from Cisco's headquarters?
Wim Elfrink: I think of two essential advantages for me or any other manager who is working
globally. First, by being here you really live all of the changes taking place in these rapidly
evolving markets. Your kids go to school and come home with stories. You go shopping and see
what that experience is really like. This direct experience makes it that much easier to
understand the country and the market, helping provide insights that can keep your company
thriving and ahead of the competition. This, we feel, will help us develop new business models
that will be more appropriate for these new markets.
Also, being physically closer just means it is that much easier to develop good relationships with
customers. In many countries it is almost unimaginable to do business without first sitting down
to dinner. So even with such communication advances like TelePresence, human contact is still
crucial for starting relationships in much of the world. Having the Globalisation Centre East in
Bangalore means I can reach 70 percent of the world's population within a five-hour plane ride.
So that just makes it much easier to build relationships with these partners, customers, and
governments.
Emerging markets are promising opportunities for Cisco, but what do the governments of these
emerging markets most want from Cisco?
Wim Elfrink: Initially, they are interested in tapping our brains. They want to know how to make
their own country and businesses more competitive. And it's flattering because they do
recognize our expertise and listen to our advice. So we launch our work in emerging countries
with a memorandum of understanding of sorts with each government to form public/private
partnerships to address their most important issues, such as improving healthcare, education,
and economic opportunities. By the way, of course, we would like to sell a network or two. But
key to our approach is that we are not looking to just sell Internet gear. It's a build, operate, and
transfer model in which Cisco helps countries reach their own goals through modern
communications technologies.
What are some of the key challenges to your globalisation efforts for Cisco?
Wim Elfrink: The most practical challenge is time. In Bangalore, there's a 12.5-hour time
difference with Cisco headquarters in San Jose. So we've got all kinds of "business hours" and
even different weekends. This makes it hard to get everyone together for a meeting. I really
have to give a lot of attention to what are the reasonable times we can have global meetings.
Most importantly, I think it has to start with respect for all the employees. One employee or set
of employees shouldn't have to wake up at three in the morning to have a weekly conference
call. Employees, no matter where they are, still need their personal lives...and some sleep.
What I am personally experimenting with is what I call time "batches." It is similar to the old
mainframe computer process of "batch processing." In the same way the computer would
download a chunk of data at a time, I am now working in chunks of time rather than in a
continuous 9-to-5 mode. I work on a batch early in the morning, and then I spend some time
with my family. In the afternoon I work another batch and then spend some time with my family
around dinnertime. Finally, I work a batch in the evening. And at some point, I sleep.
What kind of cultural and logistical changes does Cisco's globalisation strategy require?
Wim Elfrink: Well, culturally, I like to refer to the necessary change as the "globalisation of the
corporate brain." Simply setting up an operation in India is not going to make the difference in
how Cisco takes advantage of the global economy. Employees throughout the company have to
think differently. Our CEO John Chambers has started some key changes by shifting
management from a command-and-control approach to one focused on collaboration and
teamwork. That's certainly not something that changes overnight. Cultural changes always take
two or three years. But we can see the effects already. Now, the officers directly under John
work together in ways that are tremendously different from how they worked together three or
five years ago. Cisco is also developing councils, boards, and collaboration processes to further
cross-company functions. This will especially help in keeping all of our operations tied together,
no matter how far flung.
Logistically, it's all about decentralizing so we have more resources closer to these developing
markets. We are creating what you might call "thin" sales offices close to customers in new
markets. We are also looking at forming knowledge "clusters"-operations that have expertise the
company can use worldwide. These knowledge clusters or development centers will be located
wherever they make the most sense. A manufacturing knowledge cluster might be in Shanghai
or Chicago, while a finance cluster might be in New York, London, or Hong Kong. The point is to
not think in terms of the vertical organization of the country but in a more flexible, modular
design based on resources for customers...wherever they might be.
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