300-510 mock - Implementing Cisco Service Provider Advanced Routing Solutions (SPRI) Updated: 2023

Shares of Cisco Systems Inc. fell more than 11% in extended trading today as the company warned it will likely miss analysts’ expectations in its fiscal second quarter by a wide margin.

The company expects this to have a knock-on effect, and its forecast for the current fiscal year also came in low.

The disappointing guidance came in the wake of a solid earnings beat. The company reported first quarter earnings before certain costs such as stock compensation of $1.11 per share, with revenue up 8% from a year earlier to $14.67 billion. The results were better-than-expected, with analysts looking for earnings of just $1.03 per share on sales of $14.61 billion.

All told, Cisco reported a net income of $3.64 billion for the quarter, up from $2.67 billion a year earlier.

Cisco said its problem is that it has experienced a notable slowdown in new product orders during the quarter. This is because many of its clients are currently busy installing and implementing products that were delivered recently, over the prior three quarters, Cisco Chief Executive Chuck Robbins (pictured) said in a conference call with analysts.

During the COVID-19 pandemic, the company had been stuck with a backlog of unfulfilled orders caused by component shortages. But its supply chain constraints eased rapidly about a year ago as China exited its lockdown strategy, leading to a glut of product deliveries over the last four quarters. Now, customers have their hands full implementing all of those products.

“Our customers and our sales organizations have been very clear with us over the last 90 days that this is the issue,” Robbins said, though he also admitted that sales cycles are still longer than is usually the case.

According to Robbins, “customers are now taking time to onboard and deploy these heightened product deliveries,” hence the slowdown in new orders. He said it’s mainly larger enterprises, service providers and cloud customers that are facing these challenges, adding that the issue was “most pronounced in October.” On average, Cisco’s biggest customers are waiting to implement one to two quarters’ worth of shipped products, he added.

Cisco had a good quarter, but is now suffering from its post pandemic high, when it was finally able to deliver pandemic orders it could not fulfill due to supply chain challenges. Now that it has fulfilled those orders, the demand has weakened as enterprises are implementing and the channel reducing inventories. The good news is all product lines are growing, which has not been too often the case, and Cisco delivered approximately 1B more in profit on roughly 1B more in revenue, which means Chuck Robbins and team have kept costs constant and EPS per share are up a quarter. Let’s see if this trends continues.

Because of these customer issues, Cisco could only offer a much lower forecast than Wall Street analysts had been anticipating. Officials said they’re looking for earnings of between 82 and 84 cents in the second quarter, with revenue of $12.6 billion to $12.8 billion, implying a 7% decline from one year earlier. That compares very badly with the Street’s forecast of 99 cents pre share in earnings and $14.19 billion in sales.

For the full year, Cisco is reducing its revenue forecast while bumping up its view on earnings. The company now sees full-year earnings of between $3.87 and $3.93 on revenue of $53.8 billion to $55 billion. Previously, it had forecast a range of $3.19 to $3.32 in earnings and $57.0 billion to $58.2 billion in revenue. In any case, the new forecast is not great, as Wall Street is hoping for earnings of $4.05 per share on sales of $57.7 billion.

The after-hours stock decline masks the fact that Cisco delivered strong quarterly results, thanks to it finally being able to deliver pandemic-era orders that could not be fulfilled earlier, said Holger Mueller of Constellation Research Inc. “But now those orders have been shipped, it is faced with weakening demand as enterprise implement those products and the channel reduces inventories,” he explained.

Charles King of Pund-IT Inc. said Cisco has been caught on one of those “damned if you do, damned if you don’t situations”, because it did a great job in recovering from the pandemic-related supply chain chaos and has gotten back its manufacturing mojo. However, he said many of its customers have been slower off the mark. “Many are still struggling to deploy and configure the new kit they ordered months ago, so you can’t really blame them for slowing or stopping orders to deal with the backlog,” King said. “But investors appear to be blaming Cisco anyway, for failing to live up to analysts’ consensus. That may be short-sighted, but no one ever said that life, let alone the markets, are fair.”

In the longer term, Cisco’s prospects do look better. During the quarter, it announced that it intends to buy the data analytics and cybersecurity software giant Splunk Inc. in a bumper $28 billion deal, which would be its largest-ever acquisition. The move catapults Cisco, which is best known for its networking gear as well as other data center equipment, to the leading ranks of cybersecurity providers.

Robbins said at the time the deal was announced that the combination of Cisco’s and Splunk’s data would have real value for enterprises, allowing them to “move from threat detection and response to threat prediction and prevention.” He said it will enable Cisco to become one of the world’s largest software companies.

Besides its cybersecurity ambitions, Cisco has a lot of hope for artificial intelligence in the longer term. During the conference call, Robbins told analysts that his company believes it can win more than $1 billion worth of orders in fiscal 2025 for AI infrastructure from cloud providers alone. He said cloud providers are looking to move to “more of a standard, broad-based technology like Ethernet, where they can have multiple sources” to support AI networking workloads.

Mueller said it’s also notable that Cisco is running a tight ship in terms of its business expenditures. “Investors can be pleased that all of Cisco’s product lines grew during the previous quarter, which has not been the case too often,” he added. “That allowed Cisco to deliver approximately $1 billion in profit on almost $15 billion in revenue. That shows Cisco has kept its cost base constant, resulting in increased earnings per share. Cisco needs to continue this trend.”

The after-hours stock decline means that Cisco’s shares are now up just 12% in the year-to-date, trailing the wider S&P 500 index, which is up 17% for the year.

Photo: Fortune GLOBAL FORUM/Flickr

AVI-SPL, the global provider of digital enablement solutions has won the Cisco Webex Reimagine Workspaces Partner of the Year – Americas award for 2023. Per a statement, the award recognizes a solutions provider that has had the most success selling and implementing Cisco Video Devices to help customers create best-in-class workspaces.

AVI-SPL has been a Cisco solutions provider for more than a decade, the company says. It thus continues to deepen and expand the expertise in its Cisco practice to guide companies everywhere. With this, it aims to reimagine the workplace for better employee, partner and customer engagement as new hybrid work models take hold. In Cisco fiscal year (FY) 2023, AVI-SPL ranked as the #3 video devices partner in the U.S. and globally.

“Cisco’s recognition of AVI-SPL as a leading workspaces partner speaks volumes to our ability to confidently guide customers to reimagine and realize the modern work experience,” says Tom Nyhus, AVI-SPL vice president of the Cisco practice. “By embracing Cisco Webex’s innovative, leading-edge roadmap and programs, together we’ve helped global companies stay securely connected and productive from anywhere.”

The partnership between Cisco and AVI-SPL grew significantly in 2023 with new, joint go-to-market efforts. Per a statement, AVI-SPL led the way with the new Cisco Webex Hardware as a Service (HaaS) program. It thus became one of the first partners to conduct a customer pilot of the program. AVI-SPL also beta-tested new video devices and provided feedback through Cisco’s Video Champions Advisory Council around market trends and customer needs.

The Cisco 2023 Webex Partner Award honors partners who have developed and delivered exceptional Cisco-based solutions and services during the past year.

Cisco announced the Annual Partner Awards during the WebexOne 2023 conference on October 25, 2023. Additional details on the 2023 awards are available on the Cisco Webex blog.

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By Isaac Kohen, founder of Teramind, provider of behavior analytics, business intelligence, and data loss prevention (“DLP”) for enterprises.

Data is the lifeblood of the digital economy, powering everything from the personalized experiences that propel engagement to the artificial intelligence (AI) systems that promise to usher in the next era of online ventures. It has been described as the world’s most valuable resource, with critical elements enabling growth, development and innovation. A 2023 Earnst and Young analysis notes, “Data is a company’s most valuable asset. It offers untapped potential for growth, sparks new opportunities and is the foundation upon which we can build a better working world.”

While data collection and analysis were once opaque to the customer, taking place behind a veneer of free services and individualized experiences, today’s consumers are aware their data has value and are more skeptical of companies trying to collect and capitalize on it. At the same time, consumers feel that their data is less secure, privacy less protected and preferences less acknowledged, creating a widening chasm between companies and customers regarding data collection. In many cases, they have the receipts to validate their distrust. From a seemingly unending list of data breaches to egregious privacy violations, companies continue demonstrating that they can’t or won’t take the necessary steps to value or secure customer data appropriately.

If data truly is one of our most valuable assets (and it is), then business leaders need a hard reset in our approach to collecting, analyzing, storing and implementing customer data. Based on my experience in data management and security, here are three steps you can take to begin restoring customer confidence in your organization's data use practices.

1. Be transparent about data collection policies.

Instead of hiding data collection practices behind a curtain of thickly worded privacy notifications, be transparent about your practices, communicating in plain language the means, method and justification for collecting customer data. As Adobe helpfully explains, “Data transparency is the practice of using data intentionally and honestly, according to both the law and business ethics.”

This is especially important as companies across industries invest in and develop AI systems that ingest expansive quantities of customer data. According to Cisco’s 2023 Data Privacy Benchmark Study, "92% of organizations say they need to be doing more to reassure customers about how their data is being used."

When creating your data collection policies, here are some areas I recommend including for full transparency:

• Inform clients about your data handling methods.

• Present an inventory of the data collected, for clients to examine.

• Craft comprehensible privacy guidelines.

• Empower clients with control over their data.

Remember, transparent data collection policies aren’t just a “nice to have'' accoutrement. They’re a regulatory imperative as consumer privacy regulations force businesses to be better stewards of people’s information and preferences.

2. Minimize data access within the organization.

Employees and privileged users often have unfettered access to customer data, creating opportunities for privacy violations and misuse. For example, in 2021, Facebook fired multiple employees for accessing user data for “nonbusiness purposes.” According to the company, over 16,000 employees had access to users' private data, creating a sprawling information ecosystem that was difficult to monitor and protect. In response, the company minimized customer data access within the organization, giving fewer than 5,000 employees access to customer information and fewer than 100 access to “particularly sensitive data such as passwords.” The company’s problem and solution are instructive for companies of every size in every sector.

I believe that minimizing data access within an organization is foundational to restoring customers’ confidence in a company’s data collection practices. To achieve this in your business, consider implementing automated software solutions that:

• Guard against unintended data mishaps by customizing rules that oversee email, messaging and web interactions.

• Ensure your data remains secure with protocols and surveillance for file transfers and activities.

• Oversee and record actions of any individual logged into servers, including external contractors and third parties.

• Safeguard business data outside of regular hours with time-sensitive policies and regulations.

• Monitor high-level user data access through role-determined guidelines.

By minimizing data access within the organization, you can demonstrate care for your customers’ data security and privacy and cultivate trust with stakeholders.

3. Proactively invest in cybersecurity.

Customers may not feel confident in any data collection practices until devastating data breaches are no longer normative. In response to this issue, many companies are investing in cybersecurity solutions that can help protect company and customer data in an increasingly unruly online environment. Unfortunately, too many organizations wait until after an incident to enhance cyber readiness. IBM’s 2023 Cost of a Data Breach report found that "51% of organizations are planning to increase security investments as a result of a breach, including incident response (IR) planning and testing, employee training, and threat detection and response tools."

Rather than waiting for a cybersecurity incident to erode customer trust and brand reputation, you can proactively invest in cybersecurity by allocating resources to areas such as:

• Employee training and awareness programs.

• Advanced security solutions.

• Personnel attraction and retention.

• Incident response and recovery plans.

These investments can help your business stay ahead of the latest trends and better prepare for emerging risks or undiscovered vulnerabilities. In my experience, this is a cost-effective, trust-building approach that can benefit you and your customers.

Safeguarding Data, Safeguarding Trust

Data stands as a cornerstone of business potential and growth in the rapidly evolving digital age. However, the trust deficit between consumers and businesses over data practices has never been more pronounced. Amid a backdrop of data breaches and privacy concerns, enterprises must reimagine their data collection, access and security approach.

By championing transparency, streamlining internal data access and proactively fortifying cybersecurity measures, you can safeguard your most valuable asset and rebuild the trust bridge with consumers. The future of a digital economy can thrive on mutual trust and respect, and making concerted efforts to nurture this relationship can lead to sustained success.

AVI-SPL has won the Cisco Webex Reimagine Workspaces Partner of the Year – Americas award for 2023.

The award recognises the solutions provider that has had the most success selling and implementing Cisco video devices to help customers create best-in-class workspaces.

AVI-SPL has been a Cisco solutions provider for more than a decade and in Cisco’s fiscal year for 2023, ranked as its third-biggest-selling partner of video devices in the US and globally.

The partnership between Cisco and AVI-SPL grew significantly in 2023. AVI-SPL became one of the first partners to conduct a customer pilot of the new Cisco Webex Hardware as a Service (HaaS) programme. The integrator also beta-tested new video devices and provided feedback through Cisco’s Video Champions Advisory Council about market trends and customer needs.

Tom Nyhus, AVI-SPL vice-president of the Cisco practice, said: “Cisco’s recognition of AVI-SPL as a leading workspaces partner speaks volumes of our ability to confidently guide customers to reimagine and realise the modern work experience. By embracing Cisco Webex’s innovative, leading-edge roadmap and programmes, together we’ve helped global companies stay securely connected and productive from anywhere.”

For a full list of the Cisco 2023 Webex Partner Awards winners, click here.

Marketing students and CMOs alike a similar question: which companies do the best job at developing CEOs. Of the Fortune 500 firms, some are CEO-producing factories. Their track record for preparing people to go on to become CEOs is unmatched. A key reason they are desirable employers for prospective employees is that they can increase the likelihood of ascending to the top of companies.

To understand which firms produce the most CEOs, OnDeck, a company that helps small businesses access financing online, conducted a study using data from LinkedIn. They ranked the Fortune 500 firms that have the highest percentage of ex-employees who are now CEOs.

The top CEO-producing firm is Goldman Sachs (financial services), with 3.65% of the former employees currently holding CEO positions. In the second position is Procter & Gamble (consumer packaged goods) with 3.52% of their former employees sitting in CEOs positions and in third place is Morgan Stanley (3.05%). Interestingly, the fourth and fifth positions are occupied by healthcare companies – Tenet Healthcare (2.79%) and Community Healthcare Systems (2.55%).

Of the top 25 CEO-producing companies, 10 operate within the financial services-related, the most of any industry. Firms that operate within a technology-related industry have seven firms on the list (Cisco, HP Enterprises, Microsoft, Apple, Intel, Adobe, and Oracle), although all but Cisco are ranked toward the bottom of the list. Consumer goods firms produced three companies (Procter & Gamble, Coca-Cola, and Campbell Soup)—all ranking in the top 10. Healthcare produced four firms on the below list (Tenet Healthcare, Community Health Systems, Johnson & Johnson and HCA Healthcare).

The Co-President of OnDeck, Jim Granat, suggests that: “One trend we noticed is that healthcare companies claimed top spots among the Fortune 500 companies on the list. They landed just behind the big names that have historically dominated, which could be a reflection of the continued growth in the industry.”

Christine DeYoung, Managing Partner of DHR’s Commercial Growth Practice, identifies one central similarity of all of the Top 25 Companies. “The companies are foundational training companies. They hire many from the entry level and they train. They are structured to hire best in class talent and generally have strong teaching cultures. They each are leaders in how they recruit, lean into diversity and other key initiatives to Strengthen the business results for the right reasons, and are willing to invest in their people.”

David Wiser, Managing Principal of Wiser Partners, an executive recruiting firm that focuses on functional placements, further noted that all of the CEO breeding grounds fall “into just 4 industries – CPG, Financial Services, Healthcare and Technology. These are industries that are massive, and critical to almost every consumer. This suggests size and scale matters, probably because there are resources – people and money – to leverage every possible product, sales and marketing tool available. Larger companies are also equipped to train and develop their people, and I suspect having a strong foundation leads to more capable leadership later on. In most cases, these are all market-leaders, and strong brands, suggesting there is value in working for a winner. They are also largely consumer-facing businesses, versus Industrial, B2B businesses, where go-to-market plans are generally anchored in better research.”

One noteworthy industry missing from the list is consulting. DeYoung suggests that “it does strike me that great consulting firms that are also rather big-picture strategy focused, such as Bain, who invest in talent and culture, aren’t on this list. I would expect that many of their talented consultants would be strong leaders. However, they have to leave the consulting firms and become mid-level leaders (at other firms) to really learn what the operationalizing of the strategy looks and feels like and its many challenges, including how lead an enterprise-wide team and how to be responsible for the consequences for implementation. Then they can become great leaders poised for more senior responsibility.”

Wiser further suggested that “some of the smartest, most strategic, most analytical people I’ve met come out of Accenture, BCG, Bain, McKinsey, but even they would admit that without practical, hands-on experience inside the client, it can be a very difficult and translation and transition. One other point. Very few of our clients will consider someone coming out of Consulting, for a CEO role, for this reason – the perception that they are great thinkers, but lack the experience of “doing.” This also suggests that there are likely a number of highly skilled and experienced consultants out there who could be successful senior, client-side leaders and CEOs, if they could just get into the game. I suspect most of the CEOs who spent time in consulting, made the move to the client side earlier in their career.”

Join the Discussion: @KimWhitler

Study Methodology:

OnDeck first compiled a list of Fortune 500 companies. The team then used publicly available data via LinkedIn’s Company Search tool to calculate the number of workers who used to work at the Fortune 500 companies who are now CEOs as a percentage of the total number of former employees. The data for this research was gathered and is accurate as of August 2023.

J.P. Shadrick, Kainani Stevens, Brian Sexton and John Oehser are back in action to share their thoughts about the Ezra Cleveland trade, Zay Jones injury and preview the San Francisco matchup and how the Jaguars offense must advance against this defense.