{"id":115127,"date":"2020-08-15T17:52:34","date_gmt":"2020-08-15T21:52:34","guid":{"rendered":"http:\/\/rbach.net\/?p=115127"},"modified":"2022-08-06T13:07:28","modified_gmt":"2022-08-06T17:07:28","slug":"can-cisco-be-xaas-y","status":"publish","type":"post","link":"https:\/\/rbach.net\/index.php\/can-cisco-be-xaas-y\/","title":{"rendered":"Can Cisco be XaaS-y ?"},"content":{"rendered":"\r\n

\"tech<\/a>It’s not news that these are unprecedented times. No one has seen anything like COVID-19<\/strong><\/a> — or the global response to the virus<\/a> – before. Many people worry about\u00a0how this situation will evolve<\/strong> and how it will affect economies, careers, and personal bottom lines. The long-term economic fallout<\/a><\/strong> after the crisis passes is unknown. It’s possible it will be bad and last a couple of years<\/strong><\/a>. It may be shorter. There’s no way to tell.\u00a0<\/p>\r\n

\"Can<\/a>The tightening of the purse strings has led tech prognosticator IDC<\/a> to lower its<\/strong> 2020 guess<\/del> forecast<\/strong> for the Ethernet switch and wireless LAN markets. The research firm expects the WLAN market<\/strong> to grow less than 1% from 2019, while the switch market<\/strong> will shrink 0.7%. The revised numbers represent a 3.7% point drop from IDC’s earlier 2020 forecast for Ethernet switches and a 4.8% point decline for WLAN revenue. In dollar terms, IDC says the switch market will reach $28.5 billion this year while WLAN revenue\u00a0will be $6.2 billion.<\/p>\r\n

To prove IDC’s point, Cisco<\/a>\u00a0(CSCO<\/a>)<\/strong> just announced<\/a> its ’20Q4 earnings report and it was not pretty<\/strong>. During the fourth fiscal quarter that ended June 30, the tech giant\u2018s product revenue fell 13%<\/strong> year over year to $8.83 billion. After the presser, CSCO slid by more than 11% <\/strong>– the worst day since February 2011.<\/p>\r\n

\"Cisco<\/a>As an answer to declining revenue Cisco CEO Chuck Robbins announced<\/strong> layoffs<\/del> a restructuring<\/a> plan<\/strong> was underway:<\/p>\r\n

Over the next few quarters, we will be taking out over $1 billion on an annualized basis to reduce our cost structure.<\/em><\/p>\r\n

The San Jose, CA-based company Cisco, which employees 75,000 people, worldwide, did not say how many employees would be laid off<\/del> restructured going forward. Cisco has been laying off<\/a> employees<\/a><\/strong> over the past few quarters<\/a>. CEO Robbins said on the earnings call, that the COVID-19 pandemic<\/strong> has forced the company to \u201cre-examine\u201d<\/strong><\/em> its entire portfolio and nothing is off the table.\u00a0<\/p>\r\n

\"Layoffs\"<\/a>In theory, Cisco is using the restructuring to accelerate its R&D to focus on delivering everything it can as a service<\/strong> as it transitions to generating more of its revenues from software rather than hardware<\/strong>. In the last quarter, FierceTelecom<\/a> <\/em>reports<\/a> that Cisco now generates half its revenue from software and services.<\/p>\r\n

CRN<\/a><\/em> reports<\/a> that Cisco\u2018s infrastructure segment<\/strong>, which includes the core switching and routing<\/strong> businesses as well as wireless<\/strong> and data center products, continued its double-digit decline, falling 16%<\/strong> during the quarter to $6.62 billion. Overall, this segment dropped 10% for the full year.<\/p>\r\n

Revenue was down across all customer and geographic segments<\/strong>. In terms of customer segments, Cisco saw revenue decline in all segments:<\/p>\r\n