Cisco Systems

Cisco Systems, Inc. is an American multinational corporation headquartered in San Jose, California, United States, that designs and sells consumer electronics, networking, voice, and communications technology and services. Cisco has more than 70,000 employees and annual revenue of US$ 40.0 billion as of 2010. The stock was added to the Dow Jones Industrial Average on June 8, 2009, and is also included in the S&P 500 Index, the Russell 1000 Index, NASDAQ 100 Index and the Russell 1000 Growth Stock Index.

Len Bosack and Sandy Lerner, a married couple who worked as computer operations staff members at Stanford University, later joined by Richard Troiano, founded Cisco Systems in 1984. Lerner moved on to direct computer services at Schlumberger, moving full time to Cisco in 1987. The name "Cisco" was derived from the city name, San Francisco, which is why the company's engineers insisted on using the lower case "cisco" in the early days. For Cisco's first product, Bosack adapted multiple-protocol router software originally written some years before by William Yeager, another Stanford employee who later joined Sun Microsystems. The company's first CEO was Bill Graves, who held the position from 1987 to 1988.In 1988, John Morgridge was appointed CEO.

On February 16, 1990, the company went public (with a market capitalization of $224 million) and was listed on the Nasdaq stock exchange. On August 28, 1990, Lerner was fired; upon hearing the news, her husband Bosack resigned in protest. The couple walked away from Cisco with $170 million, 70% of which was committed to their own charity. 

While Cisco was not the first company to develop and sell a router, it was one of the first to sell commercially successful routers supporting multiple network protocols. Classical, CPU-based architecture of early Cisco devices coupled with flexibility of operating system IOS allowed for keeping up with evolving technology needs by means of frequent software upgrades. Some models (such as Cisco 2500) managed to stay in production for 5–8 years virtually unchanged. Although Cisco products had their roots in the enterprise environment, the company was quick to capitalize in emerging service provider market as well, entering market with successful product lines such as Cisco 7500 and GSR.

Between 1992 and 1994, Cisco has also acquired several companies in Ethernet switching are, most notably Kalpana, Grand Junction and Crescendo Communications together forming Catalyst product line. At the time, the company envisioned layer 3 routing and layer 2 (Ethernet, Token Ring) switching as complementary functions of different intelligence and architecture - the former was slow and complex, the latter was fast but simple.In 1995, John Morgridge was succeeded by John Chambers.

The phenomenal growth of Internet in mid-to late 1990s quickly changed telecom landscape. As the Internet Protocol (IP) became widely adopted, the importance of multi-protocol routing declined. Nevertheless, Cisco managed to capitalize on the Internet wave, with wide range of products that became vital to Internet service providers and by 1998 gave Cisco de-facto monopoly in this critical market segment.

In late March 2000, at the height of the dot-com boom, Cisco became the most valuable company in the world, with a market capitalization of more than US$500 billion. In July 2009, with a market cap of about US$108.03 billion, it is still one of the most valuable companies.

Meanwhile, the growth of Internet bandwidth requirements kept challenging traditional, software-based packet processing architectures. The perceived complexity of programming routing functions in silicon led to formation of several startups determined to find new ways to process IP and MPLS packets entirely in hardware and blur boundaries between routing and switching. One of them, Juniper Networks, shipped their first product in 1999 and by 2000 chipped away about 30% from Cisco SP Market share. Cisco answered the challenge with homegrown ASICs and fast processing cards for GSR routers and Catalyst 6500 switches. In 2004, Cisco also started migration to new high-end hardware CRS-1 and software architecture IOS-XR.

As part of the massive rebranding campaign of 2006, Cisco Systems adopted the new, shortened name "Cisco", a new slogan and logo that was created in collaboration with Joe “Phenom” Finocchiaro and Jerry “The King” Kuyper. The changes were meant to make Cisco a "household" brand - a strategy designed to support the low-end Linksys products and future consumer products (such as Flip Video camera acquired by Cisco in 2009).

As part of the company's overseas strategy, Cisco built substantial presence in India. It has established its Globalization Centre East in Bangalore for $1 billion planning that 20% of Cisco's leaders will be based there. 

Due to lower than expected profit in 2011, Cisco was forced to reduce annual expenses by $1 billion. The company cut around 3,000 employees with an early-retirement program who accepted buyout and planned to eliminate as many as 10,000 jobs (around 14 percent of the 73,400 total employees before curtailment). During the 2011 analyst call, Cisco's CEO John Chambers have called several competitors by name, apparently inaugurating a "black PR" campaign.