Cisco Systems' security business grew 10 percent in the networking giant's latest quarter. Demand for managed security services, managed detection and response (MDR), and SaaS-based products like Duo and Umbrella appears strong. And Cisco is touting new ways for partners to resell MDR services to end-customers.
Amid those bright spots, the networking giant is also seeking to shed about $1 billion in costs over the next year, according to a plan disclosed during Cisco's quarterly earnings call on August 12. The cost cuts will include offering early retirement to employees, The Wall Street Journal reports. Specific details about potential job cuts were not disclosed.
Cisco's overall revenue was $12.2 billion for Q4 2020, down 9 percent from Q4 2019, the company revealed on August 12. Also, net income was $2.6 billion, up 19 percent from Q4 2019. The figures generally beat Wall Street's expectations -- though a tepid forecast for Cisco's next quarter pressured the company's stock after-hours.
Cisco Revenue Segments: A Closer Look
Cisco's overall business performance has been mixed. During Q4 of 2020, Security revenues rose 10 percent, while Infrastructure Platforms (down 16 percent) and Applications (down 9%) showed weakness. Wall Street analysts blamed the weak areas on tight corporate IT infrastructure spending during the coronavirus pandemic.
Still, CEO Chuck Robbins was upbeat in his assessment of the overall business -- noting that Cisco has transitioned much of its revenue toward software, subscriptions and recurring revenues. In a prepared statement, Robbins said:
"By the end of fiscal 2020, we achieved our goal of more than half of our revenue coming from software and services, and this strategy continues to resonate with customers as they digitize their organizations. Throughout fiscal 2020, Cisco has demonstrated operational resilience based on our strong customer relationships, solid financial foundation, and differentiated innovation. As we focus on the future, we are rebalancing our R&D investments to focus on new areas so we can continue to offer customers the best, most relevant technology in simpler, more easily consumable ways."
Cisco SaaS and Managed Security Services
On the security front, Cisco seems to be packaging its portfolio into two areas:
Among the related info Cisco shared during the company's August 12 earnings call.
Stay tuned for more details on those SecureX and MDR opportunities, in particular.
