Today is a new day for all of us at Cisco, and I could not be more excited for our future. Under John’s leadership over the past 20 years, we have changed the way the world works, lives, plays and learns. We’re so well positioned in the market because of the vision, strategy and culture that John built, and we are all thankful for this. As I officially step into the CEO role today, I’m honored to lead what I believe to be the best-positioned company in our industry. I’d like to share with you why I am so confident, and how we will accelerate Cisco’s leadership in the digital age.
Every customer knows that technology must be at the core of their business strategy to create and deliver unprecedented value as every person, process and thing in their organization and ecosystem connects. Each customer faces a fundamental decision: will technology simply enable, potentially differentiate, or fundamentally define their business strategy? This decision is at the heart of the digital transition that every country, city and company is undergoing, and we intend to be the most strategic partner for our customers during each stage of this transition.
In the digital world, data – and the insights from that data – will be the most strategic asset. It will be distributed across every part of our customers’ organizations and ecosystems. The ability to secure, aggregate, automate, and draw insights from the data – with speed – will ultimately define success. For fifty years, the IT industry has been bringing data to the ‘computer.’ Now, we’re bringing computing – with analytics, insights, and actions – to the data. Only Cisco, and only the network, can deliver the highly secure, distributed, and intelligent infrastructure and solutions required in today’s highly dynamic digital world.
I am not the only one who sees the opportunity ahead for Cisco. Today, we welcome two amazing industry and thought leaders to Cisco’s Executive Leadership Team (ELT). Zorawar Biri Singh is joining us as our SVP and Chief Technology Officer, Platforms and Solutions, and Kevin Bandy will serve as our SVP and Chief Digital Officer.
As I’ve said before, a diverse set of perspectives and experiences is important to me as we build Cisco’s next chapter. We’ve looked at leaders from around the world, and I am convinced that we are adding two of the most strategic and innovative leaders to the Cisco team. Their creative thinking will make us even stronger.
As Cisco’s CTO, Biri will further our success at anticipating customer and industry transitions, and define the technology strategy to stay ahead of the market. He is a visionary who will drive thought leadership around Cisco’s long-term technology roadmap, platforms and architectures for the next era of digitization and beyond. Working closely with Pankaj Patel and Cisco’s engineering and broader CTO community, he will set the foundation for our long-term investments. He will also work with Hilton Romanski and our strategy team to align our technology strategy with our business strategy and corporate development priorities. Having Biri in this role will drive greater clarity for our customers as they digitize everything that they do.
Kevin, as Cisco’s Chief Digital Officer, will help us define our next generation digital strategy. We have always been the leader in leveraging Internet technologies to transform countries, cities and companies, and we will continue our leadership in the next wave of digitization. He will work with teams across Cisco to design a comprehensive vision for us, and our customers, to capture the true value of digitization by leveraging Cisco’s broad portfolio of solutions and services. Rebecca Jacoby’s Operations and IT teams will partner with Kevin to drive and execute on our digital strategy throughout the company to allow us to accelerate the incredible work that Operations and IT does in defining our own strategy.
With the addition of Biri and Kevin, I believe we have the best, and most passionate, leadership team in the industry with the right capabilities and values to lead us into the future.
We are a company that builds amazing teams, passionately drives our customers’ and partners’ success, and cares deeply about changing the world. Our culture of trust, respect, innovation, and winning is a great competitive advantage, and we are focused on building the most innovative employee experience so that our people are at their best.
I have believed in this company for over 17 years, and as I start today as Cisco’s new CEO, I have never believed in us more. Every day, I’m inspired by our customers, partners and our teams – and what we make possible. What’s ahead for Cisco is truly extraordinary and our time is now.
Next week, I start my new role as Cisco’s CEO. The past 90 days of my transition period have been as intense and inspiring as I expected, and I am even more excited about our next chapter.
As I said I would, I have spent most of the last few months listening to our employees, customers, partners and shareholders around the world. It is clear to me that we have the right vision, strategy and assets to lead our customers and the market for the next decade. I also see where we can and will prioritize and accelerate areas that are critical to our future success, make changes where needed, drive greater simplification and clarity in our business, continue our focus on operational discipline, and invest in our exceptional culture. I talked about these as my four focus areas 90 days ago, and while we’ve already made several decisions that reflect our commitment to move with speed in these areas, you will see more from us in the days, weeks and months ahead.
Today, we announced the sale of our SP Video customer premise equipment (CPE) business to Technicolor. Our entry into this market almost 10 years ago moved us from a tactical vendor to a strategic partner to our service provider customers. This market is moving extremely fast, and now is the right time for the right company, Technicolor, to drive the future of the SP Video CPE business and deliver what our customers and partners need going forward. You can read more detail on this here. With this move, we are prioritizing our investments to deliver on our strategy of video in the cloud, and will partner with Technicolor to position the CPE business and its employees for future success. This is a win for us, a win for Technicolor, and a win for our customers, partners and employees.
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Today, Technicolor announced it has entered into an exclusive agreement with Cisco to acquire our service provider video customer premises equipment (CPE) business for $600 million (or €550 million equivalent) in cash and stock. The companies also signed a strategic partnership agreement to develop and deliver next generation video and broadband solutions and services. More on this announcement can be read in the Technicolor press release.
This transaction will bring together global leaders in networking, cloud, and the connected home to drive the future success of the service provider video CPE business and both companies’ next generation video strategies:
- With a rapidly moving and consolidating market, our shared customers will experience a seamless and smooth transition, and benefit from the continued innovation, focus and support of both companies,
- Our employees will help define the future of a successful, global organization with a 100-year history of innovation,
- The Connected Devices business’ industry-leading video and modem technologies will allow Technicolor to continue to innovate, deliver scale, and provide enhanced customer service, and
- Cisco will continue to refocus our investments in service provider video towards cloud and software-based services businesses.
Ten years ago we entered the set top box business because of the role it played in our service provider customers’ business. Connected devices have delivered $27 billion of aggregate revenue to Cisco since then. This technology continues to be critical for these customers. We are proud of the contribution this business and its people have made to Cisco over many years. This includes providing new innovations, expanding important markets, and deepening our service provider relationships. We now believe that the time is right, and Technicolor is the right partner, to take this business to the next stage of evolution and growth.
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As more of the business models in IT shift to a recurring revenue model for products, software, solutions and services, the ability to easily implement, track, manage and renew contracts is critical to maximizing revenue potential. These transitions create opportunities and change for our customers, our partners, and for Cisco.
That is why I am pleased to announce Cisco’s intent to acquire MaintenanceNet, a privately held company providing a cloud-based software platform that uses data analytics and automation to manage and scale attach and renewals of recurring customer contracts.
Since 2009, Cisco and MaintenanceNet have worked together to offer Cisco distribution and reseller partners a simple and automated way to improve service renewals and identify uncovered product opportunities. How does this work? MaintenanceNet’s software identifies customers with service contracts that are coming up for renewal, overdue, or with products that are not yet covered. Their low-touch solution enables automated quoting, notifications, and, in some cases, ordering online. This helps Cisco partners capture high-volume and low-dollar sales opportunities that may risk being overlooked. This streamlined process enables services contract opportunities to be pursued quickly and efficiently.
MaintenanceNet will be joining Cisco’s Global Customer Success (GCS) organization, a group dedicated to improving customer engagement and delivering a coordinated, end to end experience to our partners and customers. This acquisition is a critical component of our strategy for GCS to simplify and digitize our business processes.
Just as MaintenanceNet’s business was built with and through partners, this acquisition demonstrates Cisco’s focus on serving the partner go-to-market strategy and its significant role in our customers’ success. While we have worked together for some time, I look forward to welcoming the MaintenanceNet team into the Cisco family as we continue to innovate and grow our business.
Cisco will pay $139 million in cash and retention based incentives to acquire MaintenanceNet. The acquisition is expected to be complete in the first quarter of Cisco’s fiscal year 2016.
Tags: acquisition, channel partners
We’ve promised to provide regular updates about important events related to our litigation to stop Arista’s wrongful copying of Cisco’s copyrighted and patented intellectual property. An action by the Supreme Court of the United States this week has the potential to change the landscape for our US District Court action related to our CLI technology.
In December 2014, we took action against Arista’s verbatim copying of portions of our user manuals and over 500 of our multi-word commands in our command line interface (CLI). At the time, some speculated that the CLI copying might be justified under principles that Google had asserted regarding its copying of the Sun/Oracle code for Java Application Programming Interfaces (APIs), and Arista’s lawyers were relying on that argument in court. At that time, Google was appealing the Federal Circuit’s decision (holding that API software code is copyrightable) with the Supreme Court of the United States.
Some felt that if the Supreme Court took up the Oracle/Google case and reversed Oracle’s Federal Circuit win, it might somehow apply to justify Arista’s brazen copying. It’s worth noting that Arista also offers a CLI that they created themselves (though it’s not used by many of their customers), and the only justification in their public statements prior to the litigation was that their users preferred Cisco’s CLI. With that in mind, we’ve always felt that Arista’s copying of large portions of the Cisco CLI could be distinguished from Google’s argument in that there was no alternative to the API code to create Java-compatible applications.
However, the Supreme Court decision this week, to decline to review Oracle’s win in the Federal Circuit, effectively removed another argument that Arista could make to the Court.
Once again, we call on Arista to stop their blatant copying, respect others’ intellectual property rights, and immediately disable use of the copied Cisco CLI. We are using all available processes to resolve this matter, and will undertake all necessary steps to expedite the District Court’s review of our claims and ask the court to instruct Arista to end use of their products that include the copied CLI.
Note that this decision affects only the copyright claims in the District Court. Our patent claims in the District Court and our International Trade Commission action about Arista’s infringement of twelve Cisco patents continues apace. We are confident in our case and expect positive rulings to be issued by next May.
Tags: arista, intellectual property, ITC, Northern California District Court, Protecting Innovation