Cisco Capital – Celebrating 20 years of Financial Innovation
Twenty years ago, Cisco Capital began with a simple purpose: to enable companies of all sizes to transform and develop through the acquisition of Cisco technology.
While Cisco Capital has grown substantially since then, our mission has remained unchanged. Over the past two decades—from the dot-com boom and bust, to the banking industry’s collapse and rebirth, to today’s era of digital transformation—Cisco Capital has helped organizations of all types rethink how they acquire technology and leverage it to gain competitive advantages, improve sales effectiveness and enhance operational efficiencies.
As Cisco switches, routers, and portfolio of products have become the technological foundation of both established businesses and start-ups, Cisco Capital financial innovations through the years have allowed organizations to scale, meet market demand and stay competitive by acquiring new technology and refreshing outdated equipment.
Cisco Capital in the 90s – Adapting to the dot-com boom and bust
The dot-com boom fueled an era of seemingly endless growth opportunities, catapulting both established businesses and new technology startups to the upper echelons of the global marketplace. To support this rapid growth, companies needed secure, scalable equipment to accommodate new market variables like internet traffic and the impact of rapidly expanding customer bases. While Cisco provided the practical hardware and software to solve scale-related challenges, Cisco Capital delivered the financial means for organizations to acquire these solutions in the form of loans and leases.
The nineties were an era of unprecedented growth for technology companies. Then the dot-com bubble burst. Market growth slowed drastically in 2001, forcing companies to adapt to reduced demand by cutting costs and conserving capital. In response, Cisco Capital began offering Cisco-certified refurbished equipment through the remarketing of these assets, creating affordable options for organizations to acquire technology despite resource limitations.
The Cisco Capital remarketing business grew alongside that of its customers in the aftermath of the market crash, as did the need to meet market fluctuations head-on with adaptable financial solutions.
Cisco Capital in the 2000s – Policy, change, and dynamic transformation
Policy changes, banking deregulation and the subsequent 2008 market collapse forced many organizations to once again reconsider their technology acquisition strategies and think more creatively about how to finance them.
The evolving tie between IT infrastructure and revenue generation led many businesses to seek dynamic financial offerings that could add value to the bottom line while delivering against organizational goals. Businesses needed something that could not only help meet market fluctuations but enable competitive advantage by optimizing the accelerating technological lifecycle.
In the 2000s, Cisco Capital introduced financing to help companies proactively manage technology lifecycles. With lifecycle financing, companies could redefine the internal relationship between finance and IT by aligning technology investments with a new end-to-end solution. Companies could invest in the latest Cisco innovation while simultaneously reducing operating expenditures and limiting capital expenditures with a single financial solution.
As with remarketing and the financial options introduced following the dot-com boom and bust, lifecycle financing provided businesses with an innovative new option to help them transform and meet market demands.
2016 and beyond – New consumption models and Open Pay
Today, organizations face another significant shift in the way they do business and how they use vendor financing to adapt. Digital transformation and the exponential acceleration of innovation and business development present a new set of challenges—today’s ‘consumption-based economy.’ Consumption models more accurately reflects usage and provides customers with more convenience at a fraction of the cost.
In this evolving market, consumers now rely on apps and services like Airbnb and Uber to enjoy the benefits of ownership without the hassle. A similar paradigm is developing in the financial sector with evolving demand and scalability requirements.
Organizations no longer want a static technology investment plan. Instead, customers require something that can dynamically adapt to and reliably address today’s fluctuations in demand. In order to help customers pay for variable capacity as needed, Cisco Capital developed Open Pay to better align to future payments and actual usage.
Looking forward to the next 20 years
From the initial loan and leased-based relationships of the nineties to today’s end-to-end financial solutions, the transformative nature of business and technology proves that a little bit of ingenuity can pay big dividends in an industry fueled by innovation. As we celebrate Cisco Capital’s 20th anniversary, we want to thank our customers, partners and team members around the world for helping us reimagine the role of financing in the acquisition of technology. We eagerly anticipate the challenges and opportunities of the decades to come.