Cisco has reported its earnings for Q4 and while the company's revenue may be down as a result of the pandemic, CEO Chuck Robbins is considering offering its core networking hardware as-a-service to boost revenue going forward.
As reported by The Register, the networking giant brought in $12.2bn in revenue this quarter representing a nine percent year over year decrease and its annual revenue fell by five percent to $49.3bn.
Despite these falls in revenue which were attributed to the pandemic, Robbins also shared some good news with investors as he told them that Cisco had managed to meet and even go beyond the transformation goals it set back in 2017. The first of these goals was to secure 30 percent of the company's revenue from software while the second was to earn half of its revenue from both software and services. Cisco's last goal was for two thirds of software sales to be sold as a subscription and the company was able to surpass this at 78 percent.
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The company's CFO Kelly Kramer provided further insight on its earnings for Q4 and the year in a press release, saying:
"We executed well in Q4, delivering strong margins despite the very challenging environment. Software subscriptions now make up 78% of our software revenue and remaining performance obligations continued to grow strongly in the quarter, reflecting the strength of our portfolio of software and services. We are seeing the returns on our investments in innovation as we focus on delivering long term growth and shareholder value."
Networking hardware as-a-service
Cisco's shift to subscriptions is far from over though as Robbins explained his plan to offer the company's networking hardware as-a-service to investors in an earnings call, saying:
“We're even looking at how we deliver our traditional networking hardware as a service over time. I'd say that it's clear that many of our customers do want to consume the technology as a service. We're currently looking at the entire portfolio to see how deeply we can get into the portfolio relative to delivering as a service, and I think we'll have a lot of that in the marketplace by the end of the calendar year.”
At the same time, Cisco also plans to accelerate its investments in cloud security, collaboration tools, automation in the enterprise, the future of work, analytics and more.
Hopefully the company will be able to bring its networking hardware as-a-service offering to market soon as its rival HPE already has a head start with its Greenlake technology-as-a-service offering.
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Via The Register