Cisco CEO Chuck Robbins on Software Subscriptions, the Cloud and AI

Recently, Cisco CEO Chuck Robbins discussed the transition to subscriptions for Cisco's services, as well as their strategy for the cloud. During Wednesday's financial call, Robbins shared that customers should expect continuing shifts as the company will consistently offer more software services with subscriptions--especially in routing.

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For instance, Robbins noted that Cisco has already added 2,700 customers this quarter for 40 Catalyst 9000. This brings the total to 5,800 customers since its launch in 2017. Robbins stated:

We are quite pleased with the acceptance of intent-based networking and the Cat 9k continues to be the fastest ramp up in Cisco history. If you look at business momentum particularly the software transition, we had another quarter – our deferred product revenue, software subscriptions were up 29 percent to $5.6 billion, and 55 percent of our software revenue is now coming from subscription offers, and we have more than doubled the percentage of our product business, [and business from] recurring offers [are] up 30 percent year over year.

In addition, Robbins shared that Cisco has created a new compensation system to align with their software-subscription offers, and their sales organization has had to transition as a result. Moreover, Robbins stated that their customers do find the subscription model easier, more specifically, when it comes to cloud-based solutions. In terms of Cisco's cloud strategy, Robbins conveyed that they want to help their customers build their own private clouds.

With their hyperconverged platforms, Cisco has a multi-cloud strategy to help their customers operate seamlessly in a multi-cloud environment. Recently, Cisco acquired the AI/machine learning firm, Accompany. Robbins noted that they will use the firm's technologies to connect the details between the massive compute and massive data sets.

With AI and machine learning, Cisco can improve their defense against the 20 billion daily cyber threats, as well as searching for commonalities to better protect their customers.