Cisco Systems Inc. (NASDAQ: CSCO) in just the last week or so has taken over the top spot for year-to-date performance among the 30 equities comprising the Dow Jones industrial average, with its shares having risen nearly 20 percent in 2018. That’s a big deal. How did it happen? What pushed Cisco beyond its best-known-router reputation to being a top performer on the DOW?
A little history
Cisco has been around for nearly as long as I’ve been working on Unix and Linux systems. Founded in December 1984 by two Stanford University computer scientists and clearly named after San Francisco, its logo clearly depicts the two towers of the Golden Gate Bridge and its line of products have kept it a major player in routers and switches. In fact, Cisco was on top of the tech world before the dot.com meltdown. Then it plunged with the rest of the tech sector.
Fortunately, that’s not the end of the story. Cisco has since grown to become one of the most innovative technology companies and not just in routers, but also in the much wider IT market.
Diversification
Cisco has been diversifying its product line for decades now. While the name “Cisco” brings images of routers into focus, its industry-leading routers and switches are only one part of its story. Diversification has been a steady and major strength. In a series of acquisitions, Cisco has widened its product line to include VoIP, WebEx, UCS, AppDynamics and many others products and services, each time broadening its impact.
Even so, while Cisco has long used acquisition as their primary mode of product development and will continue to do so, that does not mean that the company does not apply significant resources into its internal R&D. You can see these investments paying off in areas such as ASICS and CHIP development.
The diversification theme was predicted by some in What to expect from Cisco in 2018 as the company moved even more strongly from a hardware-based company to an integrated hardware and software-focused one.
Major thrusts
Pete Wareham, Director, Business Development at Cisco’s partner, Softchoice, had some thoughts to offer on Cisco’s success. “One of Cisco’s strengths” he claims “is that it is one of the few vendors that can reach from the desktop client to the datacenter, all underpinned by a secure, intuitive infrastructure. This gives them unsurpassed levels of visibility into emerging cybersecurity threats and the ability to address those threats in a before, during and after mode. Cisco is uniquely positioned to address the challenges faced by businesses, as their workforces become more mobile and their access to new web or cloud based applications explodes.”
Vision
Pete Wareham also explained that Cisco’s push toward machine-to-machine learning, artificial intelligence and data analytics are some of the most interesting of Cisco’s new offerings. We are seeing a huge influx of web/cloud enabled devices coming on line. The ability to securely leverage the data generated by these devices can really change how we do things today and how we will do things going forward.
This article originally appeared on NetworkWorld.